DENVER, Colo. — With an initial offer of $7.5 million in hand, bids are now being accepted for the sale through federal bankruptcy court of the San Luis & Rio Grande railroad, the former Iowa Pacific Holdings property based in Alamosa, Colo., that operates 154 miles of former Denver & Rio Grande Western lines.
In a motion filed Monday in U.S. Bankruptcy Court for the District of Colorado, trustee William A. Brandt reports a stalking horse bid for $7.5 million plus assumed liabilities from Midwest & Bluegrass Rail, which currently operates four short lines: the Chesapeake & Indiana, Vermillion Valley, Youngstown & Southeastern, and Camp Chase Railway. Any competing bids received by the May 21 deadline must be accompanied by a cash deposit of $500,000. If if no other bids are received, the stalking horse bid will be accepted. Additional qualifying bids will lead to a May 26 auction in Denver, with a hearing to approve sale to the winning bidder in bankruptcy court during the week of June 1.
The Midwest & Bluegrass offer is for the rail line, related structure, all locomotives and other rolling stock, operating contracts such as trackage rights agreements, the name “San Luis & Rio Grande Railroad, Inc.” and other intellectual property, and other facets of the railroad. It calls for the bankruptcy trustee to file for an abandonment exemption with both the court and Surface Transportation Board for the westernmost 29 miles of the railroad, west of Monte Vista, Colo.
The San Luis & Rio Grande and another Iowa Pacific property, the Mount Hood Railroad, were placed into receivership in September 2019 after defaulting on a loan from Illinois investment firm Big Shoulders Capital [see “San Luis & Rio Grande, Mount Hood Railroad placed into receivership,” Trains News Wire, Sept. 13, 2019]. Equipment from another Iowa Pacific property, Heritage Rail Leasing, was placed on sale by Heritage Rail’s trustee earlier this year [see “Digest: Bankruptcy trustee begins sale …,” News Wire, March 2, 2021].
