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PUBLIC NOTICE OF 363 SALE: Massachusetts Coastal Railroad LLC

AUCTION SALE OF MASSACHUSETTS COASTAL RAILROAD LLC

NOTICE IS HEREBY GIVEN that William A. Brandt, Jr. of Development Specialists, Inc. (“DSI”), as chapter 11 Trustee of San Luis & Rio Grande Railroad, Inc. (“SLRG”) is selling SLRG’s 100% Membership Interest in its wholly-owned subsidiary Massachusetts Coastal Railroad LLC (“Mass Coastal”), a 99-mile short line railroad operating on and near Cape Cod, MA, which currently provides freight rail services primarily for various industrial commodities and the haulage of municipal waste.

The Membership Interest will be sold free and clear of all liens, claims, rights, interests, and encumbrances whatsoever. Mass Coastal’s assets and liabilities shall remain unaffected by the sale of the Membership Interest, as the Successful Bidder is essentially buying the stock of Mass Coastal.

The Trustee anticipates selling the Membership Interest in Mass Coastal pending approval of Bidding Procedures filed in the chapter 11 bankruptcy of San Luis & Rio Grande Railroad, Inc., United States Bankruptcy Court District of Colorado as case number 19-18905-TBM.

The Trustee and his professional advisors at DSI have received a Stalking Horse Bid for the Membership Interest from Coastal Rail, LLC. The Stalking Horse Bidder is an insider of the Debtor, as defined in Bankruptcy Code section 101(31), and is an affiliate of the current manager of Mass Coastal, which is 100% owned by SLRG.

The Stalking Horse Bid is $952,559, which consists of $625,000 of new cash (the “Cash Purchase Price”) plus a relinquishment of any claims held by Mass Coastal to the $327,559 in net cash currently held by the Trustee on Mass Coastal’s behalf as a result of the assignment of the Section 45G Tax Credits.

Parties interested in submitting a competing Bid must submit an offer to purchase the Membership Interest on substantially the same or better terms as the Stalking Horse Bidder. The aggregate cash consideration proposed by the first competing Bid must be equal to, or exceed, the sum of the Purchase Price set forth in the Stalking Horse Bid plus a further ten percent (10%) of the Cash Purchase Price.

Subject to Bankruptcy Court approval, if the Trustee receives qualified competing bids, an auction will be held on June 19, 2020, at the offices of Markus Williams Young & Hunsicker, LLC in Denver, CO. Also subject to the Bankruptcy Court Approval the following dates shall apply:

Bid Deadline: June 16, 2020, at 11:59 p.m. MT
Auction Date: June 19, 2020, at 10:00 a.m. MT

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

Trustee’s Counsel:
Jennifer Salisbury
Markus Williams Young & Hunsicker, LLC
1775 Sherman St., Ste. 1950
Denver, CO 80203
(303) 830-0800
[email protected]
www.markuswilliams.com

Trustee:
William A. Brandt, Jr.
Development Specialists, Inc.
110 East 42nd St., Ste. 1818
New York, NY 10017
(212) 425-4141
[email protected]
www.DSIconsulting.com

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