By 1887 the Northern Pacific, like many U.S. roads, was living on borrowed time. Henry Villard returned to the board of directors. Though offered the presidency, he refused. However, an associate of Villard dating back to his time on the Kansas Pacific, Thomas Fletcher Oakes, assumed the presidency on September 20, 1888. In an effort to garner business, Oakes pursued an aggressive policy of branch line expansion. In addition, the Northern Pacific experienced the first competition in the form of James Jerome Hill and his Great Northern Railway. The Great Northern, like the Northern Pacific before it, was pushing west from the Twin Cities towards Puget Sound, and would be completed in 1893.

To combat the Great Northern, in a few instances Villard built branch line mileage simply to occupy a territory, regardless of whether the territory offered the railroad any business. Mismanagement, sparse traffic, and the Panic of 1893 sounded the death knell for the Northern Pacific and Villard's interest in railroading. The company slipped into its second bankruptcy on October 20, 1893. Oakes was named receiver and Brayton Ives, a former chairman of the New York Stock Exchange, became president. For the next three years, the Villard-Oakes interests and the Ives interest feuded for control of the Northern Pacific. Oakes was eventually forced out as receiver, but not before three separate courts were claiming jurisdiction over the Northern Pacific's bankruptcy. Things came to a head in 1896, when first Edward Dean Adams was appointed president, then less than two months later, Edwin Winter.

Ultimately, the task of straightening out the muddle of the Northern Pacific was turned over to John Pierpont Morgan. Morganization of the Northern Pacific, a process which befell many U.S. roads in the wake of the Panic of 1893, was handed to Morgan lieutenant Charles Henry Coster. The new president, beginning September 1, 1897, was Charles Sanger Mellen. Though James J. Hill had purchased an interest in the Northern Pacific during the troubled days of 1896, Coster and Mellen would advocate, and follow, a staunchly independent line for the Northern Pacific for the next four years. Only the early death of Coster from overwork, and the promotion of Mellen to head the Morgan-controlled New York, New Haven and Hartford Railroad in 1903, would bring the Northern Pacific closer to the orbit of James J. Hill.
https://en.wikipedia.org/wiki/Northern_Pacific_Railway