An inquiry was made with Delaware Otsego (DO) to see if they were still interested in operating the line. Building off their recent success with the launch of the Central New York Railroad and the revival of the Fonda, Johnstown and Gloversville Railroad (FJ&G), DO was confident the Honesdale Branch would be profitable. With two weeks until the deadline, DO formed the Lackawaxen & Stourbridge Railroad (LASB). A spare locomotive from the FJ&G was shipped down to Lackawaxen in anticipation of the start-up. The ownership of the tracks was still in question, so an emergency order was handed down by the ICC directing LASB to operate the branch after March 30, 1976.