Stefan Soloviev, founder and chairman of the Soloviev Group was granted approval in bankruptcy court Monday, paving the way for his purchase of the San Luis Rio Grande Railroad. The Soloviev Group is comprised of multiple divisions, including the Colorado Pacific Railroad and Crossroads Agriculture.
Under Soloviev’s ownership, the railroad will now operate as the Colorado Pacific Rio Grande Railroad. Matt Prince, president of CWC Rail who also contracts with CPRR in the operation of its line on the eastern plains, will serve as general manager and oversee daily operations.
Less than 24 hours after the judge’s approval, Soloviev, along with Prince, was in the San Luis Valley, meeting with SLRG employees.
Soloviev had the winning bid of $10.7 million in cash during the Nov. 17 SLRG auction, beating out OmniTRAX, who was the only bidder at $5.7 million for weeks and went as high as $10.5 million before being outbid.
Soloviev will now take steps to close the sale and gain final approval from the Surface Transportation Board, the independent federal agency charged with the economic regulation of railroads.
“I believe that process should be ministerial and approval will be granted,” said William Brandt, trustee for the court and the individual who has been at the helm for the last three years, keeping the SLRG operational while finding a buyer.
In terms of creditors, Alamosa, Rio Grande, Conejos, Costilla and Huerfano counties are currently owed a total of $3.8 million in back taxes.
“There’s enough money in the sale for all the back taxes to all five counties to be paid as well as the state of Colorado.,” Brandt said. “At $10.7 million, the price is sufficient to cover a lot of problems.”
The San Luis Valley Resources Development Group, which loaned Brandt $800,000 to keep the SLRG running, also will be repaid as well as the costs of the administration of the bankruptcy. There will be a dividend to the unsecured creditors, Brandt said.
“I took this appointment as a measure of public trust. I wanted to make sure the railroad continued to operate. I told everyone at the start that I was not going to shut it down.
“The SLV is old Colorado,” he said. “It’s not Vail or Breckenridge. It’s where people make a hardscrabble living from the earth and from the mines. You have to appreciate that and do what you can to make sure that they can go home every night, assured of a job and assured of economic growth. So, I did my best.
“But, most importantly, the railroad under Stefan Soloviev will continue to operate for many years to come and the San Luis Valley will benefit from the economic development that the railroad brings.”
The bankruptcy judge also approved OmniTRAX as the backup-bidder at $10.5 million in the event Soloviev, dba KCVN, does not close the sale.