A Huntingdon County judge this week heard arguments in a dispute over the prospective sale of the northernmost 4.7 miles of the 33-mile long East Broad Top Railroad — the section connecting the EBT with the Norfolk Southern mainline at Mount Union.

Larry Salone’s East Broad Top Railroad Preservation Association wants to sell that section of the line to Stephen Lane’s Juniata and Aughwick Railroad LLC for $2 million — a deal the East Broad Top Foundation, which owns the rest of the EBT, is willing to match, based on its right of first refusal, but only if the offer is “arms-length” and legitimate, according to the court proceedings.

Salone and Lane asked the court to let the sale go through, as the deadline for the foundation to exercise its right of first refusal has long passed and as the foundation may be simply trying to sabotage the deal, according to the pair; while the foundation maintains that its right of first refusal remains valid pending the court’s determination that Lane’s offer is legitimate and not a ploy to extort the foundation, according to testimony at the hearing.

Headquartered in Orbisonia and named a National Historic Landmark in 1964, the EBT “is the last surviving original narrow-gauge railroad east of the Rocky Mountains that remains in its original unaltered state,” according to a “5th Year Report to Stakeholders” from the foundation.

The foundation wants to acquire the northern segment to complete its ownership from Robertsdale, in the Broad Top coalfields, to Mount Union, so the line is whole, and so that it can be used for economic development, according to the report.

It is his hope that the line will ultimately be one, “together, like a full body,” said Joe Kovalchick, co-defendant with the foundation, whose father Nick bought the EBT in 1956 to scrap it, but decided instead to preserve it.

“My client wants to make this railroad whole,” said Huntingdon attorney Lawrence Newton, who is representing Kovalchick and the foundation.

Lane has provided documents to the attorneys representing his side, showing that he has the funds through an investor to buy the northern end of the EBT, but he “wishes for the investor’s name to remain anonymous, due to the hostile nature of the sale,” according to a motion for declaratory judgment filed by Lane and Salone, the plaintiffs.

Accordingly, the “plaintiffs respectfully request that the documentation be reviewed by the judge in chambers and kept strictly confidential to avoid harassment of (the) Juniata & Aughwick Railroad LLC’s investor,” the motion states.

The foundation has reason to doubt the validity of Lane’s offer because the amount is twice what the foundation initially offered for the property in 2024, when there were components that have since been sold off or damaged — which would seem to have made it significantly less valuable — not twice as valuable, according to Newton.

“(That) creates red flags for us,” Newton told the court.

The earlier deal “blew up” over revelations of a grant that was never closed out, said Bennett Levin, foundation member and chairman of the organization’s Property Committee.

The foundation is a public charity and doesn’t want to be lured into throwing money away by a fake or “sham” offer now, Levin told the court.

“Money is not an issue with us,” Levin said. “But we don’t want to be extorted.”

Salone’s lawyer Richard Wilson of Huntingdon acknowledged the foundation’s wariness.

“But the fact that the foundation doesn’t trust my client does not provide a basis for (insisting) that my client can’t sell his property,” Wilson said. “The court should first determine whether (Lane’s offer) is legitimate, and if it is, determine whether the foundation has waived its right of first refusal by failing to agree (to intervene) within 60 days or request an extension.”

Salone’s Preservation Association bought the northern section from Joe Kovalchick in 2013.

Kovalchick negotiated the right of first refusal to buy back the assets at that time and, in 2025, reassigned that right of first refusal to the foundation.

Lane entered into the agreement to buy the northernmost section of the line in August.

On the stand, Salone testified that his potential buyer Lane was once “part of the foundation” and is “a big fan” of the EBT.

Born and raised in the region, Lane “can bring a commercial aspect” to the northern connection if he should obtain it, enhancing the tax base and creating jobs, Salone said.

He would have loved to do that himself, but he’s “getting old and creaky,” Salone told the court.

Citing a Preservation Association Form 990 IRS report, Newton questioned Salone, pointing out seeming discrepancies on what was on the form and actual conditions on the northern section of the line.

Those alleged discrepancies are legitimate basis for doubting the legitimacy of the proposed sale to Lane, according to Newton.

For example, the Form 990 talks about an outdoor museum.

“Where is the museum,” Newton asked.

“It’s a linear park,” Salone said, accusing Newton of “putting a definition on a museum that is not our definition.”

People can experience the museum by walking along the old right-of-way, he said.

As for that right-of-say not having been fully rehabilitated, that is due to an inability “to raise the money,” Salone said.

All that is irrelevant anyway, given that the matter at issue is “a straight contract dispute,” said Salone’s lawyer, Wilson.

The $2 million purchase price that Lane negotiated for the northern connector is a fair one, even given issues and deficits on that stretch of line, Lane testified under questioning by Newton.

Asked by Newton about the foundation’s legal right to run trains on that section of tracks without charge, Lane said he wouldn’t have the responsibility “to maintain the track for your purposes.”

Levin contradicted that claim.

Newton attempted to get a forensic audit of Salone’s Preservation Association admitted as an exhibit, but Wilson objected that the audit is irrelevant to the matter at hand, and Judge Ray Ghaner agreed.

The court will conduct a review of Lane’s proposal to determine whether his offer is in good faith, schedule another hearing if necessary, and then ask the attorneys to submit their arguments on whether the foundation’s right of first refusal is still valid, Ghaner said at the conclusion of about three hours of testimony.

Mirror Staff Writer William Kibler is at 814-949-7038.