June 14, 2022

William A. Brandt Jr., the Chapter 11 Trustee for the currently operating San Luis & Rio Grande Railroad Inc., has announced his intention, subject to U.S. Bankruptcy Court approval, to sell substantially all of the assets of the railroad through an auction process.  Interested parties will be required to submit a bid by July 10, 2022, at 4:00 p.m. Mountain Time. The proposed auction will be in accordance with terms and bid procedures outlined in the Motion Approving Bidding Procedures recently filed by the Chapter 11 Trustee, which is currently pending before the U.S. Bankruptcy Court for the District of Colorado, Case No. 19-18905-TBM.

The San Luis & Rio Grande Railroad (“SLRG”) is a “common carrier” operating under the jurisdiction of the Federal Surface Transportation Board. The SLRG owns and operates a 155-mile short line railroad serving the San Luis Valley in southern Colorado. Originally constructed in 1878, the railroad traverses the geographically strategic La Veta Pass over the Sangre de Cristo Mountain range and connects the eastern plains of Colorado to the San Luis Valley.

With an interchange connection to the Union Pacific mainline at Walsenburg, Colorado, SLRG currently provides freight line rail services for various industrial, mineral, and agricultural commodities in the San Luis Valley as well as maintains extensive railcar storage facilities along its right-of-way with a storage capacity of more than 3,100 cars.  Prior to the bankruptcy filing, the SLRG also operated a variety of passenger excursion trains over the scenic La Veta Pass at an elevation of 9,400 feet.

The assets to be sold primarily consist of the various pieces of real and personal property used in connection with conducting and maintaining the operations of a freight railroad.  These include the trackage, roadbed, ties, other track material, inventory, maintenance-of-way equipment, vehicles, bridges, culverts, signals, stations, depots, yards, storage facilities, buildings, workshops, garage structures, and various other agreements or licenses relating to the real estate located on, along, over and under the SLRG rail lines.

The sale of the SLRG assets shall be subject to explicit Bankruptcy Court approval and authorization. The assets to be sold will be transferred on an “as is, where is” basis and shall exclude cash and the membership interests the SLRG holds in subsidiary railroads. All the railroad’s right, title and interest in and to the SLRG assets shall be sold free and clear of all interests, liens, claims and encumbrances, with all liens, claims and encumbrances to attach to the sale proceeds.

The Chapter 11 Trustee, in concert with his Court-retained financial advisors at Development Specialists, Inc. (“DSI”), has set a minimum bid of $5,750,000.00, plus the assumption of all liabilities with respect to the purchased assets arising after the sale closing, as the required price for these assets. The purchase price submitted must be equal to or exceed this $5,750,000.00 reserve price in order to be considered a qualified bid.

If the Trustee receives multiple qualified bids, an auction will be held on July 14, 2022, at the offices of Markus Williams Young & Hunsicker, LLC in Denver. This auction may be convened remotely, via video conference, as deemed appropriate by the Trustee or rescheduled as necessary with advance notice to all qualified bidders.

Copies of the Motion to Approve Bidding Procedures, and all other related exhibits, are available upon request by contacting the Trustee’s counsel, or for a fee via PACER by visiting http://www.cob.uscourts.gov.

For further inquiries, please contact the financial advisors at DSI who are handling the organization of this sale effort for the Trustee. Either William G. Brandt at 312-263-4141 or wgbrandt@DSIConsulting.com, or Patrick J. O’Malley at 312-263-4141 or pomalley@dsiconsulting.com, should be the point of contact for further questions.

Link to map of the San Luis & Rio Grande Railroad line: https://www.dropbox.com/s/5arp601fkmavp34/SLRG%20Line%20Map%20V2.bmp?dl=0

About San Luis & Rio Grande Railroad:

The San Luis & Rio Grande Railroad is an established “common carrier” rail line operating under the jurisdiction of the Federal Surface Transportation Board whose assets consist primarily of real estate holdings, operational related equipment, standard-gauge railroad trackage infrastructure spanning approximately 155 miles.  The SLRG’s east-west line extends from South Fork, CO eastward through the San Luis Valley and over the La Veta Pass to Walsenburg, CO. While the railroad’s north-south branch-line stretches approximately 20 miles between downtown Alamosa, CO and Antonito, CO, ending just several miles north of the New Mexico border.

Click the link below to view the press release.