TWO new bids have been submitted to purchase the San Luis & Rio Grande Railroad, competing against an existing bid from Denver-based OmniTRAX.
The highest bid now is $6.050 million by KCVN LLC, which is owned by The Soloviev Group, a holding company for several business interests based in New York City.
Big Shoulders Capital, the largest unsecured creditor in the bankruptcy proceeding, also submitted a cash bid of $4 million coupled with a credit bid of $1.75 million. The credit is part of the money Big Shoulders Capital said it is owned as a creditor in the bankruptcy proceeding.
The flurry of activity came after Bankruptcy Trustee William Brandt entered into an asset sale agreement with OmniTRAX to sell the railroad for $5.75 million. The agreement set in motion a deadline to file objections to the potential sale to OmniTRAX and to submit counter bids.
KCVN and its parent company, The Soloviev Group, owns Colorado Pacific Railroad. If Soloviev through KCVN ends up owning the railroad, Colorado Pacific Railroad would be the operator. Colorado Pacific Railroad was acquired in 2018 and operates approximately 120 miles of track in southeastern Colorado.
KCVN submitted a required $450,000 deposit as part of its bid, demonstrating its serious intent to own San Luis & Rio Grande Railroad.
The San Luis & Rio Grande Railroad operates around 150 miles and runs through Alamosa, Rio Grande, Huerfano, Costilla and Conejos counties. Brandt was appointed SLRG Trustee on Dec. 30, 2019, two months after the railroad filed for involuntary bankruptcy.
The potential sale to OmniTRAX has drawn local concern based on the company’s mixed record of purchasing and operating short line railroads. San Luis Valley Great Outdoors was among the organizations filing objections to the OmniTRAX asset sale agreement.
“The Trustee’s actions regarding sale of the SLRG to OmniTRAX will significantly impede SLV GO!’s non-profit mission in the San Luis Valley,” the organization stated in its objection. “OmniTRAX is against allowing trail systems within and near its railroad easements, whereas SLV GO! builds and manages community trails throughout the San Luis Valley, and is committed to greatly expanding the San Luis Valley Trail System. The SLV GO! long-term plan for such trail expansion necessitates SLV GO! being granted easements within and near the 150 miles of track which are among the assets of SLRG.”
Brandt earlier told Alamosa Citizen that if another company showed up with a bid of $6 million, which would exceed the OmniTRAX bid, he would be open to it and would work with that group. Brandt had earlier rejected the Big Shoulders Capital $4 million cash bid.
In its objection, Big Shoulders Capital said Brandt is not honoring an earlier agreement that would pay Big Shoulders Capital $5.59 million it negotiated with Brandt for a “secured claim” in the bankruptcy proceeding.
The U.S. Federal Bankruptcy court in Denver will take up the San Luis & Rio Grande Railroad sale in a hearing next week.