UPDATE: Trustee says he has two bids for railroad
TRUSTEE William Brandt said he has two competitive bids for the San Luis & Rio Grande Railroad, contrary to what the largest creditor in the Chapter 11 bankruptcy proceeding claimed in a federal court filing this week.
Brandt was responding to a bankruptcy court filing by Big Shoulders Capital, LLC indicating that Brandt hadn’t been able to secure any bids for the railroad and that he hadn’t been responsive to a proposal by Big Shoulders Capital.
Brandt, in a telephone interview Tuesday, said he has two bids and he expects one of the bids to be the one he takes to U.S. Bankruptcy Court Judge Thomas McNamara. McNamara has given Brandt until Aug. 25 to file a written status report with the court on Brandt’s efforts to find a buyer for the short line freight railroad.
Big Shoulders Capital is owned just under $5.6 million as a creditor in the bankruptcy proceeding, which is why Brandt set the minimum bid for the railroad at $5.75 million.
“I think we’ll get there,” Brandt said.
No buyer emerges
for San Luis & Rio Grande Railroad
AUGUST 15, 2022 /
NO buyer has emerged through a bidding process to purchase the San Luis & Rio Grande Railroad, prompting the largest creditor in the Chapter 11 bankruptcy case to file a motion Monday seeking a hearing on what comes next.
U.S. Bankruptcy Court Judge Thomas McNamara set a hearing for Aug. 29 to hear the appeal from Big Shoulders Capital and to get a written report from Trustee William Brandt “regarding the status of the case and its plan and prospects for reorganization or liquidation.”
Brandt had gotten approval from McNamara to establish a process for interested parties to submit bids of at least $5.75 million for the beleaguered railroad. Brandt said that if he received multiple bids, an auction would then be held to determine a buyer.
However, the trustee didn’t get any bids and now Big Shoulders Capital, the largest creditor in the bankruptcy proceeding, is seeking direction from the court. Big Shoulders said it has made an offer to purchase the railroad’s assets but that Brandt hasn’t responded to the offer.
“Accordingly, Big Shoulders requests that the Court set a status conference,” according to the court filing.
“The Court shares Big Shoulders’ concerns that failure to effect the prompt sale or liquidation of the Debtor’s assets could be deleterious to the interests of creditors … The Trustee shall be prepared at the status conference to advise the Court as to the status of the case and its plan and prospects for reorganization or liquidation.”
The San Luis & Rio Grande Railroad filed for Chapter 11 Bankruptcy in October 2019. You can read more about the case here and here.