Railroad entrepreneur Henry Posner recovers $14.6M from Guatemala
It took about six years, but Henry Posner III finally got his due from Guatemala: $14.6 million.
The Pittsburgh entrepreneur received the money on Tuesday because an international tribunal said Guatemala unfairly forced the shutdown of a railway that his company revived in 1997.
Posner's Railroad Development Corp., Green Tree, in 2007 was the first to file — not to mention win — an investor-versus-sovereign state claim under the Central America Free Trade Agreement.
“The loss of the railway for a second time was a national tragedy, and it can truly be said that there were no winners in this case,” Posner said in a statement. “But this now offers Guatemala the opportunity to once again look to the international railway investment community to develop the urban train, dry canal, Mexican rail link and other projects that the country aspires to.”
Posner, who owns and chairs Railroad Development and its affiliate, Ferrovias Guatemala, could not be reached for additional comment.
A tribunal of the International Centre for Settlement of Investment Disputes ruled in June 2012 that Guatemala violated standards contained in CAFTA when the state tried to strong-arm Posner's Ferrovias Guatemala to renegotiate terms of its agreement with the government to operate the railway. The tribunal ordered the state to pay $14.6 million in damages, interest and costs. In return, Railroad Development surrendered its 82 percent ownership of the Guatemalan railway.
In 1997, Posner's company negotiated a 50-year agreement with Guatemala to revive and operate its national railway, FEGUA, a year after the government shut it down. The system had about 500 miles of track and operated with 15 diesel locomotives.
But, in August 2006, the government issued a presidential decree declaring the contract “harmful to the interests of the state” and tried to force Posner's company to give up “key economic rights.”
Given the challenges and uncertainties the dispute created, Posner shut down FEGUA in 2007. Since then, even the steel from bridge trestles has been stolen and sold for scrap.
Posner's Railroad Development was represented in the dispute by Greenberg Traurig, an international law firm in Washington.
“The overall result demonstrates that governments must respect investments made by nationals of the contracting parties and that their expectation-backed rights can be vindicated,” C. Allen Foster, a shareholder at Greenberg Traurig, said in a statement.
Thomas Olson is a Trib Total Media staff writer. He can be reached at 412-320-7854 or at email@example.com.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Markets ‘flutter’ day after records
- Company proposes building 2 gas-fired power plants in West Virginia
- Profit increases 12% at Dick’s Sporting Goods
- Oakland firm Qualaris Healthcare’s software saves time in hospitals
- PNC Bank to cut financing of mountaintop removal coal companies
- Lower tax rate to help Mylan extend buying spree
- Pittsburgh gas pump prices up nearly 9 cents
- Giant Eagle to close all 8 Good Cents locations
- Rue21 adjusts for tough market
- Shift in what powers the grid raises concerns about fuel diversity
- Toyota Mirai to run on hydrogen fuel cells, widen green-vehicle divide