Straight Scoop...
Willis passed away in 1991 or so. Lynn Cecil took over as president. He and his son Rick operated Kyle with pretty much the same roster of lines until Lynn retired in 1997. Lynn sold his interest to StatesRail and essentially merged the two companies. Rick stayed on as president of Statesrail. StatesRail had no interest in excursion RR's that made little profit. Like the C&TS Kyle had operating contracts with some properties and outright ownership of others.
StatesRail decided it was not interested in several properties including the C&TS. Others included the California Western and The Yreka Western. The latter two were sold outright. The only steam passenger operation retained was the LK&P in Hawaii - mostly because it makes LOTS of money. BTW, I was told that Lynn voted against dumping the C&TS.
StatesRail was later bought out by Rail America.