Bankruptcy judge sets auction, sale hearings for SLRG Railroad
OMNITRAX, Big Shoulders Capital, or The Soloviev Group via its KCVN LLC. Those are the three companies in the running to own the San Luis & Rio Grande Railroad coming out of Chapter 11 bankruptcy following two days of hearings this week before U.S. Bankruptcy Judge Thomas B. McNamara.
Other bidders could materialize now that the federal bankruptcy court has accepted bid procedures for the auction. OmniTrax already has a court-approved qualified bid for $5.75 million and KCVN LLC, owned by The Soloviev Group, has put down the required deposit of $400,000 and has submitted an offer of just over $6 million.
The wild card is Big Shoulders Capital. It is the largest secured creditor in the bankruptcy proceeding – it is owed $5.5 million – and might submit a cash offer that competes with OmniTrax and KCVN. Big Shoulders is a company that makes debt and equity investments to help underperforming companies continue operating. That’s how Big Shoulders came into the bankruptcy proceeding, as a company owed money, not necessarily as a company that wants to own the railroad.
“Everyone recognized we have to move this along as quickly as possible because we need to try to do everything we can to close within the next couple of months so that the San Luis Valley continues to have an operating railroad,” Jennifer Salisbury, attorney for Bankruptcy Trustee William Brandt, told McNamara.
It’s Brandt who’s been running the railroad through his appointment by McNamara as San Luis & Rio Grande Railroad Trustee. Brandt has been marketing the railroad to prospective buyers in his effort to bring it out of bankruptcy.
McNamara set a hearing date for next week to conduct a final bid auction. Once the auction is complete, McNamara will then hold a sale hearing later in November to determine the course forward and an eventual sale of the railroad to a new owner.
Find previous SLRG Railroad stories HERE.