Penn Central’s 1970 bankruptcy was the largest corporate bankruptcy in U.S. history at the time.
Penn Central Transportation Company was created in 1968 through the merger of the Pennsylvania Railroad and the New York Central Railroad. The combined railroad inherited aging infrastructure, declining passenger traffic, strong competition from highways and airlines, and heavy operating costs.
The company filed for bankruptcy protection on June 21, 1970. It continued operating under court supervision, making the case an example of a railroad reorganization rather than an immediate shutdown. The federal government later created Conrail in 1976 to operate several bankrupt northeastern railroads.
Penn Central is sometimes confused with Amtrak, which began in 1971 to take over most intercity passenger rail service. Amtrak was not the company that filed the 1970 bankruptcy petition.