bankruptcy of numerous northeastern U.S. railroads in the 1970s, including D&H and E-L, N&W lost control of Dereco stock. After several merger plans fell through, EL petitioned for and was included in the formation of the federal government's nascent Consolidated Rail Corporation (Conrail). While D&H was technically still owned by N&W, they were given financial support and told to "sink or swim" as an independent railroad again. In 1980, Conrail sold the former DL&W main line from Binghamton to Scranton to the D&H; being a flatter, more direct route to Scranton, this acquisition allowed the D&H to abandon its famed Penn Division between Carbondale and the connection with the ex-Erie/EL at Jefferson Junction. The D&H was left out of Conrail to maintain a semblance of competition in the Northeast. While the success of this move has often been discredited, since the D&H was simply too small to compete with all of the markets served by Conrail, in fact the railroad doubled in size by being granted trackage rights over Conrail reaching Newark, Philadelphia, Buffalo, and Washington, DC. The remainder of the Penn Division from Lanesboro, Pennsylvania, to Nineveh, New York, was abandoned after the Belden Hill tunnel was enlarged in 1986. In 1984, Guilford Transportation Industries purchased the D&H as part of a plan to operate a larger regional railroad from Maine and New Brunswick in the east, to New York City and the Midwest in the west, Montreal in the north, and the Philadelphia/Washington, DC, area in the south. For only $500,000, Guilford purchased the entire railroad. The price tag reflected the D&H's horrid financial shape and the poor condition of its physical plant. At the time of the purchase, the D&H had little freight traffic, relying on federal and state money to keep operating. Guilford's plans for expanded service did not come to fruition, and in 1988, after two intense labor strikes, Guilford declared the D&H bankrupt, abandoning its operation. Lackawanna County, Pennsylvania, purchased the line south of Carbondale to Scranton and currently serves a growing number of industries in the valley under the auspices of the designated operator Delaware Lackawanna Railroad. With the D&H in limbo, the federal government ordered the New York, Susquehanna & Western Railway to operate the D&H without subsidy until such time as a buyer could be found. Guilford claimed that the D&H had assets of $70M at the time of the bankruptcy.