Sunday, April 27, 2008

Southern Pacific and Denver & Rio Grande

From: ldfarrar81@comcast.net

Recently I ran across two authors who make the claim that the "little" Denver & Rio Grande Railroad purchased the "big" Southern Pacific (Railroad or Transportation Co – take your pick). This is one of the most complex corporate maneuvers I have ever run into and I have been only 1/2 right, if that, up until recently. And I am thoroughly familiar with the multitudinous corporate changes in the history of Southern Pacific and its predecessors. The corporate history of the Southern Pacific and its family, going back to 1852 and even prior to that, fills a large volume. There are hundreds of predecessors. And some of the predecessors such as Pacific Electric Railway have extensive corporate histories of their own. While I don't intend to confuse historians I feel it is only correct to straighten out this SPT-DRGW confusion.

I contacted Tom O'Donnell, retired corporate Secretary of SPT Co., who kindly sent me the following explanation of what took place. May I recommend that anyone wishing to understand fully the course followed by the various companies, or corporations, will read and re-read Mr. O'Donnell's explanation several times as I have. I can certainly understand what has confused readers and historians. Hopefully, this will clear up things once and for all. Mr. O'Donnell writes:

Rio Grande Holding, Inc. (formerly Rio Grande Industries – incorporated in Delaware October 1, 1968) became a wholly-owned subsidiary of the Anschutz Corporation in November 1984. It was wholly-owned directly by the Anschutz Corporation from November, 1984 until August 8, 1988, when the Anschutz Corporation transferred all shares of common stock to Western Rail Transportation Company, a new wholly-owned subsidiary which than became the new Rio Grande Industries, Inc. on August 9, 1988.

Pursuant to a Share Purchase Agreement dated December 24, 1987, Southern Pacific Company sold all of the outstanding stock of Southern Pacific Transportation Company to SPTC Holding, Inc., a subsidiary of Rio Grande Industries, Inc. on October 13, 1988.

The Denver and Rio Grande Western Railroad Company remained a subsidiary of Rio Grande Holding, Inc. until November 21, 1994, when the stock of The Denver and Rio Grande Western Railroad Company was transferred from Rio Grande Holding, Inc. to Southern Pacific Rail Corporation (SPRC), then from SPRC to Southern Pacific Transportation Company. (This is the legal move which made the DRGW a subsidiary of SPT Co.).

On September 11, 1996, Southern Pacific Rail Corporation, which owned SPT Co. and its subsidiary DRGW, was itself merged into UP Holding Company, Inc. which changed its name the same day to Southern Pacific Rail Corporation. This is how UP effected ownership of Southern Pacific Rail Corporation. —Lynn D. Farrar