As reported here on Tuesday, the carrier Peoria hired to operate the Kellar Branch and western spur, Central Illinois Railroad Co. (CIRY) which is owned by DOT Rail, looks to be acquired by a mysterious company called Central Illinois Railroad Holdings, LLC.

I tried unsuccessfully to find out any information on this “Holdings” company. The document doesn’t disclose who the directors are in the company, and there’s no information on the internet about them. Making things more questionable, their address is for a third-floor suite in a building in Willow Springs, Illinois, that the West Suburban Chamber of Commerce still shows as for lease. All indications are that this LLC was created solely to acquire DOT Rail’s assets, which begs the questions “why?” and “who are the players here?”

That’s exactly what Pioneer Railcorp would like to know. In a filing yesterday with the Surface Transportation Board (STB), Pioneer seeks to at least delay the approval of this transaction until further information is disclosed. Pioneer has an interest because there is litigation pending in state court between Pioneer and CIRY, and this could be an attempt by DOT Rail to shield their assets in the event the court rules in Pioneer’s favor.

Pioneer brings up several other oddities about this transaction. For instance, the petition was submitted on CIRY letterhead, not “Central Illinois Railroad Holdings, LLC” letterhead. Yet the “Holdings” company is the petitioner. Also, the attorney who filed on behalf of “Holdings” is Melinda Sammons, the CFO of CIRY! As Pioneer succinctly put it, “This places Ms. Sammons in the position of being both the attorney for the buyer and as also having a fiduciary duty to the seller.”

I can’t help but wonder what the City of Peoria thinks of this transaction. They have an interest, too, of course. Even Pioneer points this out:

As previously noted, the Board is fully aware of the ongoing litigation surrounding CIRY, PIRY [Pioneer], and the Kellar Branch. Would Holdings’ acquisition of CIRY change that litigation? Does Holdings plan to continue pursuit of CIRY’s discontinuance once it acquires control? Would Holdings use its newfound control and ownership to actually operate the Kellar Branch? What about the Western Connection and the interchange with UP, will those continue to operate as they do today? There is absolutely no information contained in the record of this proceeding to help the Board and the public understand the answers to these questions. Yet, Holdings’ control of CIRY could completely impact or subvert the Board’s decision making process in those other proceedings.

Is the city even aware of this? It doesn’t appear they’ve filed any objection to it yet. You’d think they’d want to know who this new carrier is going to be and perhaps get some assurance from them that their contract with the city will still be honored.

This transaction gets curiouser and curiouser.

UPDATE: Central Illinois Railroad Holdings, LLC, has withdrawn their petition before the STB (today, 8/3/06). Melinda Sammons states, “It is my understanding from my discussions with Mr. [Marc] Lerner [Branch Chief in Office of Proceedings] that this filing is not required.” So, it looks like this will go through without any oversight at all, leaving us all to wonder what will happen next.