A rolling stock rebuilder in Moncton must repay New Brunswick nearly $5M after project failure. The court ruled its owner, Richard Carpenter, has no valid defense against the debt. This was reported by the railway transport news portal Railway Supply.

A rolling stock rebuilder in Moncton must repay New Brunswick nearly $5M after project failure. The court ruled its owner, Richard Carpenter, has no valid defense against the debt
Photo: Bob Johnston

Rolling Stock Rebuilder Faces Legal Consequences

Carpenter’s company, Industrial Rail Services, secured contracts to rebuild VIA Rail’s passenger cars. The firm planned to retrofit British-built Renaissance cars and upgrade Diesel Rail Cars.

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New Brunswick provided a $12.5M loan guarantee to boost economic growth and local jobs. Officials aimed to position Moncton as a rail manufacturing hub with skilled workforce opportunities.

Despite receiving over $20M in funding, the company failed to fulfill its contractual obligations. IRSI completed only ten out of ninety-eight required LRC refurbishments before ceasing operations.

Carpenter personally guaranteed $3M of the loan but defaulted, leading to legal action. The court ruled he must repay this amount along with nearly $2M in accumulated interest.

Financial Setback for Rolling Stock Rebuilder

A lawyer representing Carpenter declined to provide details but confirmed an appeal is possible. This legal dispute underscores the financial risks of government-backed private-sector investments.

Officials hoped the IRSI project would revitalize Moncton’s rail industry but faced disappointment. The ruling reinforces financial accountability and the consequences of unfulfilled contractual commitments.

New Brunswick sought to drive industrial development and safeguard skilled jobs through strategic funding. However, IRSI’s failure resulted in substantial financial losses for both the province and investors.

The court’s decision highlights strict enforcement of personal financial guarantees in public-private partnerships. Legal experts believe this case sets a precedent for future economic development projects.

Source: www.trains.com

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