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More than seven months after its initial purchase bid, a Rail World Inc.-led rail investment and management consortium May 23 finalized a deal to acquire Bangor & Aroostook Railroad System (B&A).
Rail World affiliate Montreal, Maine & Atlantic Railway L.L.C. (MM&A) signed an asset purchase agreement with B&A trustee James Howard, under which MM&A acquires 745 line miles in Maine, and Quebec and New Brunswick, Canada, from B&A and its affiliates.
Howard plans to file the agreement with the federal bankruptcy court as soon as the affiliate parties sign the contract and request the court's approval to complete the sale.
B&A is operating under Chapter 11 of U.S bankruptcy statutes, and its Canadian affiliate, Quebec Southern Railway, is under court-supervised administrative proceedings.
B&A affiliates involved in the sale include Canadian American Railroad, Northern Vermont Railroad, Newport & Richford Railroad and Van Buren Bridge Co., all of which filed for Chapter 11 protection and are awaiting trustee appointments. The sale also includes B&A warehousing and logistics subsidiary Logistics Management System, which is operating under bankruptcy laws' debtor-in-possession provisions.
Howard believes it will take several months for the court to review the sale agreement, and consider comments from creditors and other interested parties. The court during that time would consider any "higher and better" purchase proposals for B&A's assets.
"We believe this can be a highly successful railway and are anxious to close the purchase as soon as possible," said Rail World President Edward Burkhardt in a prepared statement.
The consortium's investors include Larry Parsons, chief executive officer of Wheeling & Lake Erie Railway Co.; Jerry Davis, retired president of Union Pacific Railroad; and Frank Turner, president of American Short Line and Regional Railroad Association, who plans soon to retire.
The consortium in early October reached an agreement to purchase B&A from Iron Road Railways for $62 million — a deal held up by bankruptcy proceedings.