Between 1974 and 1977, the Milwaukee Road lost $100 million, and the company filed for its third bankruptcy in 42 years on December 19, 1977. Judge Thomas R. McMillen presided over the bankruptcy until the Milwaukee Road's sale in 1985. The railroad's primary problem was that it possessed too much physical plant for the revenue it generated. In 1977, it owned 10,074 miles (16,213 km) of track, and 36% of that mileage produced a mere 14% of the company's yearly revenue. The approach taken by the bankruptcy trustees was to sell or abandon unprofitable or marginally profitable lines, leaving a much smaller railroad which could be profitable. Outright liquidation was considered, but not pursued. Between 1977 and 1984, route distance was reduced to a quarter from its peak and a third from its total in 1977, shrinking to 3,023 miles (4,865 km). The most extensive abandonment eliminated the Milwaukee Road's transcontinental service to the West Coast. While the Burlington Northern merger generated more traffic on this route, it was only enough to wear out the deteriorating track, not enough to pay for rebuilding. This forced trains to slow at many locations due to bad track. A final attempt to devise a plan to rehabilitate the Pacific Extension under the Milwaukee Road Restructuring Act failed. Operations ended west of Miles City, Montana on February 29, 1980. The new, smaller railroad began earning small profits in 1982 (that same year, its two commuter rail lines, collectively known as the Milwaukee District West and Milwaukee District North Lines respectively, were turned over to the Northeast Illinois Regional Commuter Rail Corporation, a forerunner of commuter rail agency Metra). Still in reorganization, the Milwaukee Road attracted interest from three potential buyers: the Grand Truck Corporation, the Chicago and North Western Railway, and the Soo Line Railroad. The Interstate Commerce Commission approved the offers by both Soo Line and C&NW. Judge McMillen approved Soo Line's offer on February 19, 1985. The Soo reorganized the property as The Milwaukee Road, Inc., prior to merging the Milwaukee into the company itself effective January 1, 1986. The successor-in-interest to what remained of the Milwaukee Road after the Soo Line sale was its holding company, the Chicago Milwaukee Corporation (CMC). This corporation's primary function was to dispose of Milwaukee Road rolling stock and real estate not sold to the Soo Line, primarily former urban rail yard locations in cities such as Milwaukee and Minneapolis. These properties were developed into big-box retail or industrial sites. The CMC itself was beset with legal and financial woes, filing for bankruptcy (under its new name CMC Heartland Partners) as a result of environmental cleanup costs and liabilities at former Milwaukee Road sites. Much of the abandoned rail line has become rail trails. The Palouse to Cascades State Park Trail (previously called the John Wayne Pioneer Trail) in Washington, Milwaukee Road Rail Trail in Idaho, Route of the Hiawatha in Montana and Idaho, Route of the Olympian in Montana, Midtown Greenway, in Minnesota, Bugline Trail in Wisconsin, and Milwaukee Road Transportation Trailway in Indiana all run on sections of the right-of-way among others. Today, both the Milwaukee Road and Soo Line Railroad trackage make up the historically logical route of the Canadian Pacific Railway.
