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Jerry Calabrese, CEO of Lionel, issued a statement by proxy at the Spring 2008 TCA National Train Museum open house on Wednesday, April 16th. The statement is posted on Lionel's website and can be read here.
Lionel's new 2008 Christmas catalog is available for viewing on-line. Check it out here.
In what should be one of their last court appearances, lawyers for MTH, Lionel and Sanda Kan (Lionel’s principal manufacturer of trains) appeared in a New York Bankruptcy Court on March 27th.
At the end of the hearing, Judge Burton Lifland approved Lionel’s confirmation plan for reorganization. The court also approved Lionel’s settlement with MTH.
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Continue reading "Court Approves Lionel's Bankruptcy Plan and Settlement with MTH by Erol Gurcan" »
The following appeared in the February '08 edition of The Lion Roars, the magazine of the Lionel Collectors Club of America and was reprinted here with permission from the authors.
Viewpoint I
by Erol Gurcan
During the last two years, my reviews in TLR have concentrated on less expensive locomotives and train sets. In my view, the two major commercial O-gauge magazines often ignore this segment of the market; they choose instead to concentrate on more expensive trains, as some car magazines focus on exotic, expensive, and powerful automobiles. However, not everyone can afford a $1,000-or more O-scale locomotive and/or has a large layout equipped with O72 minimum radius curves necessary to run it.
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Continue reading "Lionel Big Boy Review By Erol Gurcan & Eliot Scher" »
Classic Toy Trains Magazine has posted a video on their website that demonstrates how to create unique horn blasts with a Legacy equipped Lionel locomotive and the Legacy CAB-2 controller. Check out the video here.
Lionel has posted on Lionel.com a number of catalog updates for the 2008 Lionel Signature and RTR Catalogs. Check out the list here.
Also, Lionel issued a product alert with information about paint issues on the new Milwaukee Road EP-2 Bipolar locomotive. Lionel received reports that paint was chipping between the 3 sections of the locomotive during shipping. As a result, Lionel has established a return policy for those who own a Bipolar with paint issues. Read the product alert here.
Neil Young (actually his family trust) and a partner, Louis Kovach, own a company called Creative Trains. Creative Trains and Lionel are partners in a venture called Liontech. Liontech is the brains behind the development of TMCC. Mr. Kovach has agreed to sell his 50% share of Creative Trains to Neil Young and Lionel for $650,000. The Bankruptcy court has to grant permission to Lionel to make the purchase and is scheduled to hear the request on 2/21/08. Read the entire story here.
Lionel released 3 catalogs on-line early this morning. The 2008 "Signature Addition" Catalog Volume 1 is filled with 200 pages of O Gauge and American Flyer goodness. K-Line by Lionel 2008 Catalog Volume 1 features the Milwaukee Road's Olympian Hiawatha on the cover. Lionel, taking a page from the MTH play book, introduced a new "Ready To Run" catalog featuring all their traditional lower end train sets, rolling stock and accessories. Lots of great new products in all the catalogs. Check them out for yourself by clicking on the links below.
Lionel 2008 Signature Addition Catalog Volume 1
Lionel 2008 Ready To Run Catalog
K-Line by Lionel 2008 Catalog Volume 1
According to an article in Crain's Detroit Business, Lionel CEO Jerry Calabrese and VP of Marketing Mark Erickson will receive pay raises. The raises had to be approved by the bankruptcy court hence the reason the raises being made public. Mr. Calabrese will make $1 million per year and Mr. Erickson will make $465,000 per year.
Both execs have been working without a new contract since 12/31/07. According to the story, the raises more than double their salary but eliminate performance bonuses based on company performance. The two execs also get a piece of the proceeds if Lionel is sold for more than $60 million and options to purchase a piece of Lionel if the plan for exiting bankruptcy is confirmed. Read the entire story here.
Lionel has posted a count down clock on their website counting the days, hours and minutes to the release of their 2008 catalogs. The catalogs will be released on-line on February 1st. Check it out on the Lionel website.
Thanks for the tip Justin.
The following article written by Erol Gurcan appeared in the December 2007 issue of The Lion Roars, a periodic publication of the Lionel Collectors Club of America. The '07 holiday season is behind us but there is some interesting info in the article you may not have known plus there is discussion about what to expect from Lionel in 2008.
I recently had the opportunity to speak with some of Lionel’s senior executives including President and CEO Jerry Calabrese, Product Manager Matt Ashba, Chief Technology Officer John Zahornacky, and K-Line by LionelTM Product Manager Nick Ladd. They described what the company is doing this holiday season and for 2008. Here’s a summary of the conversations.
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Continue reading "What's New From Lionel for the 2007 Holiday Season (and 2008) by Erol Gurcan" »
There was some model train litigation involving Lionel and MTH in two different courts on 1/10/08.
Firstly, in the New York City Bankruptcy Court, Lionel’s motion for a 7th extension of the exclusive period in which to file its reorganization plan, was granted by Judge Lifland. MTH’s lawyer, Alec Ostrow did not oppose the motion. The court’s order gives Lionel the exclusive right until March 31 file its plan with the court. Others including MTH may file alternative plans after that up and until May 30.
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In my last legal article, (written at the request of the Coil Couplers web site), I stated that in MTH’s fraudulent transfer of assets lawsuit against Korea Brass aka Hagye Trading/Model Korea Trading (MKT), the court on November 20, 2007 issued a temporary restraining order (TRO) and entered an order directing all monies paid by Lionel to Korea Brass were to be deposited into a court approved interest bearing escrow account. The practical effect of this was, Lionel, which is not a party in MTH’s lawsuit against Korea Brass, will not be able to take delivery of trains that it paid for and which were manufactured by KB, since the money is going into a court escrow account rather than directly to KB. Ultimately, we hobbyists will not be able to purchase the trains which are affected in these legal proceedings, at least for now.
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Continue reading "MTH Attempts To Collect $$$ From Korea Brass by Erol Gurcan" »
As Associated Press story about Lionel and MTH was posted on the Forbes website recently. It's an interesting read and features a quote from Erol Gurcan. Check it out here.
Rumor has it that the next new Lionel catalog will be released this month. Stay tuned.
Lionel’s Harry Potter Hogwarts Express Train Set has
been one of the most anticipated O-gauge train sets this year. Moreover, the fact that it is on the cover of Lionel’s current catalog establishes its significance to the company’s success. The set arrived at hobby and retail stores last month, just in
time for the holiday season.
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Continue reading "REVIEW: Lionel's Harry Potter Hogwarts Express by Erol Gurcan" »
An Associated Press report published yesterday in the Houston Chronicle states that Lionel is having difficulty securing financing for its exit from Chapter 11 bankruptcy. The reason for the struggle is due to the credit crunch "fueled by the subprime mortgage industry." Jerry Calebrese, CEO of Lionel is quoted in the article:
"We're not naive, an awful lot of people that would want to make a substantial equity investment in a company like ours want to have a meaningful say in what's going on and we understand that"...
"Whether that means a substantial minority or an effective majority, it doesn't matter as long as they have common vision of what we're trying to do. It matters a lot if they're short-term investors."
Based on Mr. Calabrese's comments it seems Lionel now has to turn to private equity investment as an option which could be very interesting if the investment comes from a company or individual that wants to be actively involved in the operation of the company.
Lionel is not the only company having difficulty trying to exit bankruptcy due to the credit crunch. The article states auto-parts supplier Delphi as another example.
Read the AP article here.
Over the last two days, there have been a few posts on the Coil Couplers of America website stating that MTH has cut off Lionel’s supply of locomotives, including some of the new Legacy models, from its supplier Model Korea Trading Company (aka MKT, the company named in the Coil Couplers post of the last two days) due to the court ordered stoppage of payments by Lionel.
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Continue reading "Legal Explanation of Latest Coil Couplers Posts" »
How many times have you watched It's A Wonderful Life this Christmas season? If your answer is more times than you care to admit, Lionel and Lands' End have the perfect train set for you. The It's A Wonderful Life Train from Lionel is a special run for a Lands' End promotion celebrating the famous Christmas film. The 2 boxcars and caboose included in the starter set are adorned with images from the movie. The set lists for $299.00. View the set at LandsEnd.com here. Read the PRNewswire story about the train set and Lands' End promotion here.
According to a post by "Clyde Coil" on the Hi Rail Times blog, Lionel is very close if not already shipping the Legacy system to owners of the Legacy equipped Big Boy. Here's an excerpt from Clyde's post:
Yer all gonna have yer Legacy sets real soon. LIONEL will be reborn in 08!!!! According to our sources inside LIONEL, some sets are already "in house" but they're waiting for the rest before they let 'em go to the Big Boy owners.....
The rest of the Legacy sets are gonna be in yer stores before Christmas because they're already on their way.
Good news for Lionel and those that have been patiently waiting for Lionel's new control system.
I was in Target this weekend and noticed 3 Lionel trains sets prominently displayed on an end cap in the toy department. The 2 O Gauge "Lionel Lines Super Sets, 1 steam and 1 diesel, were $199.00 each and branded with "Only at Target" on the boxes. There was also a battery operated Polar Express G Scale set for $129.99. "Super Set TrackPacks", a set of O Gauge track pieces and a Polar Express G Scale track pack are being sold for $29.99.
Target.com is also selling other Lionel sets including the O Gauge Polar Express set for $289.99 and the G Gauge Holiday Express set for $279.99. Last year's "Only at Target" Lionel set is also still available for $249.99. Target is offering free shipping on all Lionel sets.
I did notice that the Target web site's description of the Lionel diesel set is a bit different than what was offered in the store. The following is from the website:
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Frank53 started an interesting thread over at the Model Train Journal forum that is worth a look. Frank53 is asking everyone to post a photo of a post war Lionel item (items produced between 1945 & 1969) along with the Lionel item number. You can post photos of as many items as you like as long as they have not been posted yet. The thread started on 10/30 and has 22 pages of photos and counting. The thread is becoming a great free photo reference of post war Lionel items (wiki anyone?). Use the forum's search function to search by item number to see if a photo of your favorite post war item has been posted yet.
Thanks for the tip Frank.
Below is a review of a couple of conventional Lionel locomotives, the Baby Trainmaster and the Junior Mikado, that first appeared in the October '07 issue of the LCCA magazine "The Lion Roars." Articles like this is one of the many benefits in being a member of the LCCA. Enjoy. Erol
I have reviewed two new, inexpensive conventional locomotives – one diesel and one steam.
I. The Baby Trainmaster
In its 2007 Volume 1 Catalog (page 85), Lionel® introduced an all-new locomotive, the Fairbanks Morse H16-44 in New York Central décor, commonly known as the Baby Trainmaster (6-18385). The loco arrived in stores in June 2007. It is also shown in the current 2007 Volume 2 Catalog (page 95).
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Continue reading "Review: Two New Conventional Lionel Locomotives by Erol Gurcan" »
My goal is to keep this report short and sweet (a novel concept for a lawyer). Here is the current status of the MTH Lionel settlement as of this morning.
MTH's and Lionel's lawyers were back in bankruptcy court on October 25th. Lionel CEO Jerry Calabrese and Mrs. Martin Davis were present. MTH's Mike Wolf was not. It was not necessary for him to be. I also attended the proceedings.
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Continue reading "Current Status Of MTH, Lionel Lawsuits Settlement By Erol Gurcan" »
The Associated Press ran a story this week about the Lionel Bankruptcy hearing. Read the story here.
It's been about 2 months since I have written anything substantive about the Lionel MTH Trade secrets case or about the status of Lionel's bankruptcy. That's because there was little going on in the proceedings during this period of time. As you may recall, on August 13, MTH filed an appeal concerning Judge Lifland's August 2 rulings in favor of Lionel. On August 2, Judge Lifland ruled that any future trial (the Bankruptcy Code 502(c) damages estimation hearing) in the trade secrets case would be held before him, instead of in the Federal District Court in Detroit Michigan, and granted a fifth extension of time to Lionel to file an exclusive bankruptcy plan with the court. MTH had opposed Lionel's motion for exclusivity and proposed three alternative plans which were rebuffed by Judge Lifland.
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Continue reading "Lionel And MTH Making Progress In Trade Secrets Case By Erol Gurcan" »
If you're kicking around the idea of buying a Lionel Hogwarts Express set, check out these great photos from OGR Magazine Forum participant Rail_Spike here. I'm not into Harry Potter or European trains but this set is nice.
Lionel's CEO, Jerry Calebrese, has scheduled a speaking engagement with the Adult School of Montclair, NJ on Tuesday, November 6. There is a $15 registration fee. See the Lionel website for more details.
An article in Crain's Detroit Business covering a Michigan based product testing company, NSF International Inc., mentions Lionel as one of NSF's customers. Lionel's CEO, Jerry Calabrese, indicates in the article that Lionel is taking a proactive stance and testing it's warehoused inventory for lead tainted paint even though the company hasn't received complaints. Tests have "not found cause for concern" according to the article. This is good move by Lionel and I'd be surprised if other O Gauge train manufacturers haven't taken similar steps. Read the Crain's article here.
If you ever wondered why lead was ever used in paint, check out this Chemistry World article.
Lionel won two major and important rulings from Judge Lifland in the bankruptcy court this morning. The more important of these was the decision that the future trial (in others words,the Bankruptcy Code section 502c "damages estimation hearing') in the trade secrets case would be tried before the judge, instead of a jury trial in the Federal District Court in Detroit, Michigan. The second important ruling was Lionel was granted a fifth extension of time, giving it the exclusive right to file its bankruptcy reorganization plan.
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Continue reading "Lionel Wins Major Rulings In Bankruptcy Court" »
The 2007 Volume 2 catalogs for Lionel and K-Line by Lionel are now available at Lionel.com.
The Baltimore Sun ran an article about the MTH vs. Lionel case. The article contains quotes from Lionel's CEO, Jerry Calabrese, the lead attorney for MTH and Tom McComas of TM Books & Video. Read it here.
According to Lionel's website, the countdown timer in the upper right corner announces that the 2007 Volume 2 Catalog will be available on 8/1/07.
Lionel is offering a replica of the "Best Friend of Charleston" steam locomotive as a special "on-line" exclusive. The steam locomotive was built in 1830 for the South Carolina Canal and Railroad company. Lionel is offering the locomotive with a tender and one passenger car for $349.99. An add-on passenger car is also available for $64.99. Learn more about the real Best Friend of Charleston here. View Lionel's version here.
Lenny Dean was an employee of Lionel for nearly 60 years. He played an instrumental role in Lionel's service department for many years and helped Lionel move production from New Jersey to Michigan after General Mills purchased the rights to make and sell Lionel trains. Mr. Dean's years of service, his knowledge of Lionel trains and his relationship with collectors made him a very popular figure within the O Gauge community. Angela Trotta Thomas featured Mr. Dean in one of her works to celebrate his 60 years of service with Lionel. Check it out here. Read the letter sent to dealers by Lionel's president Gary L. Moreau announcing Mr. Dean's retirement here. Classic Toy Trains magazine ran an article announcing Mr. Dean's death here and Mr. Dean's obituary can be found here.
UPDATE: Sources tell me that the wake was very well attended. Numerous floral arrangements including one in the shape of Lionel's Circle L logo. On display was the Lionel Lenny Dean boxcar and Angela Trotta Thomas' LIFE cover of Lenny along with letters to/about Mr. Dean from Lionel. Lionel also posted a tribute to Mr. Dean on their website here.
Attorneys for both MTH and Lionel were back in a New York Bankruptcy Court on July 10th. Both MTH's Mike Wolf and Lionel's Jerry Calabrese were present. I was present for part of the day.
On the docket were several items, including Lionel's motions seeking court approval to pay its lawyers and accountants etc. the fees earned between January 1, 2007 to April 30, 2007. These motions were unopposed. Judge Lifland approved all of them and entered an order to that effect.
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Continue reading "MTH Lionel Update: Parties In Settlement Talks by Erol Gurcan" »
In my last article, I summarized that Lionel and MTH were in court on June 27th, with Lionel’s attorneys were attempting to convince Bankruptcy Judge Burton Lifland that he should try the trade secrets and separate $17.5 million dollar patent infringement case to expedite their exit from bankruptcy. MTH’s attorneys had cross-moved to send the trade secrets case back for trial to the Federal District Court in Michigan, the court where a jury awarded them $40.7 million dollars in June 2004.
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Lionel and MTH’s attorneys were back in a New York bankruptcy court on June 27th before Judge Burton Lifland. Interestingly, the courtroom was crowded since a lot was potentially riding on the hearing. Lionel’s CEO and President Jerry Calabrese, and Chief Financial Officer Scott Turkington were present in court. They were scheduled to testify and later did. More about that later. Mrs. Martin Davis was present as well. MTH’s Mike Wolf was not.
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In my last article, I stated that Lionel's motion for the damages estimation hearing (which would actually be a trial on this issues of potential liability and damages in the trade secrets case) and MTH's cross-motion to have the trial take place in the Federal District Court in Michigan (the court where the jury awarded MTH $40.7 million dollars on June 7, 2004) were scheduled to be heard in the New York Bankruptcy Court today. However, both motions were adjourned to June 27, 2007. Thus, nothing occurred in court today on this matter.
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MTH has abandoned its plans to seek redress in the United States Supreme Court concerning the trade secrets case. On May 30, 2007, MTH filed a motion (an application for a court order) with the Sixth Circuit Court of Appeals to vacate the 90 day stay that was previously granted by it so they could file a write of certiorari with the US Supreme Court. The Sixth Circuit has not decided the motion yet, but there is no reason to think that they will not grant it. Certainly, Lionel is not going to oppose it, and it will make less work for the US Supreme Court.
So the question becomes, Where do we go from here, or what happens next?
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K-Line by Lionel is producing a line of Ringling Bros. and Barnum & Bailey themed items. Check out the on-line brochure here.
Lionel filed its bankruptcy reorganization plan with the court on May 21. This was an important and necessary step in moving the trade secrets and patent infringement litigation forward, and in beginning the process to exit from bankruptcy.
I recently reviewed Lionel’s bankruptcy reorganization plan filed with the court. It contains some surprising and interesting legal, financial and hobby related information. Is Lionel opening a new office, now much does Lionel spend a year on new tooling, how much does it earn a year in royalties based on its trademark, and what are MTH’s annual sales based on Lionel’s estimates? If you would like to know the answers to these questions and more, then read on. The information for this post was obtained from Lionel’s reorganization plan filed with the bankruptcy court.
Continue reading "A Review Of Lionel's Bankruptcy Reorganization Plan by Erol Gurcan" »
I haven't visited Lionel's website over the past few days and of course they posted 2 press releases during that time. The first has to do with the closing of Davis Trains in Ohio. Apparently Davis was a well know repair shop for K-Line Collector Club products. Lionel announced that Brasseur Electric Trains in Saginaw, Michigan will now service those products. Read the press release here.
Jerry Calabrese also released a statement about their recently redesigned trucks on Lionel diesel engines. One of the undesired by-products of the redesign was an increase in the gap between the trucks and the body of the locomotive. It was a small but noticeable increased that collectors complained about so Lionel is redesigning the trucks to decrease the gap on future Legacy equipped diesel locomotives. Read about the redesign here.
Hat tip to Erol for informing me about the press releases.
Lionel and MTH's attorneys were back in a New York bankruptcy court 5/22/07. Lionel CEO Jerry Calabrese was present in court. MTH's Mike Wolf was not.
Lionel's lawyer, Adam Harris quickly informed Judge Lifland that Lionel filed their bankruptcy reorganization plan with the court yesterday. Among the items in the plan is payment in full of all unsecured claims with interest. The plan is necessary in order for Lionel to begin their exit from bankruptcy. Lionel has been in bankruptcy since November 15, 2004, a period of over 2 1/2
years.
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As you may recall, on April 19, 2007, the Sixth Circuit Court of Appeals denied MTH's petition for a rehearing of its December 14, 2006 decision in the trade secrets case. That earlier decision vacated the jury's $40.8 million dollar judgment against Lionel and codefendant Korea Brass, and remanded the case to the District Court in Detroit, Michigan for another trial. Bankruptcy Judge Burton Lifland in New York has stated in the past he will hold a damages estimation hearing in the trade secrets case rather than let another trial take place in Detroit. The two model train rivals were recently holding mediation talks in New York in both the trade secrets case and patent infringement case. The next court date in the bankruptcy court is May 22.
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Continue reading "MTH Lionel trade secrets case: Headed to US Supreme Court? by Erol Gurcan" »
Lionel has released its 2007 Christmas catalog on-line. Highlights include the new G Scale version of the Polar Express, an O Gauge Polar Express Steam Train Sounds tender and new Holiday 2-8-2 Mikados with Railsounds available in red or green. The back cover includes a teaser for the new Harry Potter Hogwarts Express. View the new catalog here.
On April 19, The Sixth Circuit Court of Appeals denied MTH's petition for a rehearing of its December 14, 2006 decision. That earlier decision vacated the jury's $40.8 million verdict in favor of MTH in the trade secrets case, and remanded it to the Eastern District of Michigan for another trial. While the above news is certainly important, it is not unexpected. I stated in a post in January that MTH's chances of prevailing on the petition were small. Additionally, MTH's Attorney Alec Ostrow stated at least twice at the bankruptpcy court conference on January 9, 2007 that is was unlikely MTH would prevail on the petition.
The more important question now becomes, what is going to happen now that the appeals process is over. Where do we go from here?
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Continue reading "Appeal's Court Denies MTH's Petition For Rehearing by Erol Gurcan" »
Lionel's monthly operating report for March 2007, filed with the bankruptcy court on April 13, 2007, showed net earnings, or profit of $189,000. While the amount itself is small, it is a profit nonetheless, which is significant for this time of year. During the calendar year 2006, Lionel did not post a monthly profit during the first seven months of that year. Additionally, in March 2006, Lionel showed a loss of $349,000 and in March 2005, a loss of $534,000.
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Continue reading "Lionel Financials - March '07 by Erol Gurcan" »
Some of you may not be familiar with Norm Charbonneau. Norm is what I and many others would consider a master O Gauge modeler. His layout is a work of art and has graced the cover of O Scale magazine late last year (a rarity for a 3 rail layout). Norm also maintains a blog for the purposes of chronicling progress made on his layout and for sharing his modeling knowledge. The subject of his latest post is Lionel's TMCC II Legacy train control system. Norm had the unique opportunity to put Lionel's new train control system and a new TMCC II equipped Big Boy on his layout for a test session. Read about his evening with Legacy here.
To model railroad purists the presence of the unrealistic third rail running down the center of O Gauge track is a major drawback to O Gauge model railroading. Even with today's realistic looking modern offerings from Atlas, Lionel, MTH, Gargraves and Ross Custom Switches, that third rail is hard to hide. Back in the heyday of O Gauge railroading, modelers were basically stuck with using the unrealistic looking three rail tinplate track Lionel was manufacturing at the time. Modelers came up with ways to enhance the look of tinplate track by adding extra home made railroad ties and weathering the rails but the third rail still stuck out like a sore thumb. O Gauge enthusiasts didn't seem to mind but those looking to create a more realistic model railroad layout opted for 2 rail O Scale, S Gauge or HO scale. Despite its unrealistic appearance, running electricity through a third rail did simplify the control of automatic accessories and eliminated the need for special wiring on layouts with reversing loops.
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