State settles unused trains lawsuit for nearly $10 million (UPDATE)

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MADISON, Wis. (AP) — The state of Wisconsin will pay a Spanish manufacturer nearly $10 million for two trains it built that were never used after Republican Gov. Scott Walker abandoned a rail project.

Talgo Inc. filed a lawsuit in 2012 over the trains it manufactured to run on an unbuilt Amtrak line between Milwaukee and Chicago. The settlement ends a dispute over ownership of the trains, with Talgo keeping the titles and receiving $9.75 million from the state to close the contract, according to company attorney Lester Pines.

Under the agreement, Wisconsin stands to gain 30 percent of the trains’ sale if Talgo finds a buyer within three years. If the company sells the trains for at least $32.5 million, the state would recover the cost of the settlement.

Then-Gov. Jim Doyle, a Democrat, signed a contract with Talgo to buy the trains in 2009. When Walker was elected, he rejected $810 million in federal stimulus money to help pay for the new train line in Wisconsin, abandoning plans to use the two Talgo trains along the high-speed route and to build a facility in which to house them.

But the likelihood of Talgo being able to close on a sale of the trains in the next three years remains unclear.

“It’s not like selling cars. There’s not a standard list price and it’s a limited market,” Pines said. “All I can say is Talgo has been trying to sell the trains, they will continue to try to sell them, and the possibility of selling them is enhanced now by the fact that there’s no dispute over ownership of the trains.”

Although the case hasn’t been formally dismissed in Dane County Circuit Court, the agreement between the two parties has been signed and the stipulations for the case to be dismissed are expected to be filed Thursday, Pines said.

The case would’ve gone to trial in December if an agreement wasn’t reached.