The Canandaigua & Elmira RR was sold at foreclosure on April 23, 1857 to George B. Holmes and reorganized on May 2, 1857 as the Elmira, Canandaigua and Niagara Falls Rail Road Company, continuing to operate the Chemung RR. On November 6, 1857, the Canandaigua & Niagara Falls RR was also sold under foreclosure. The Elmira, Canandaigua & Niagara Falls RR went bankrupt, and a receiver was appointed on July 1, 1858, the Chemung RR reverting to Erie operation. The bankrupt railroad was sold at foreclosure on July 23, 1858 to Charles Congdon and Robert B. Potter. On August 25, 1858, the foreclosed Canandaigua and Niagara Falls RR was reorganized as the Niagara Bridge and Canandaigua Railroad, which was leased to the New York Central on September 1, 1858. It was regauged to , depriving the Erie of a broad gauge connection to Niagara Falls. The foreclosed Elmira, Canandaigua and Niagara Falls RR was reorganized on February 18, 1859 as the Elmira, Jefferson and Canandaigua Railroad Company. The Erie continued to operate the Elmira, Jefferson & Canandaigua RR, which in turn operated the Chemung RR, until January 19, 1866. The two lines were then leased to the Northern Central Railway, to replace an unsatisfactory joint routing over the Buffalo, New York and Erie Railroad, the line to be given a third (standard gauge) rail by May 1, when the lease was to take effect.