Las Vegas Monorail Company Looks to Exit Bankruptcy
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Las Vegas Monorail Company Looks to Exit Bankruptcy

November 23, 2011

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The end of the Las Vegas Monorail Company’s bankruptcy filing was delayed last week after a bankruptcy judge determined that the company’s reorganization plan still needed some tweaking.

While Las Vegas Monorail continues to look forward to life after bankruptcy, the company’s bankruptcy judge is still nervous about the monorail’s financial stability.

According to a report in the Las Vegas Review-Journal, the monorail’s bankruptcy attorneys agreed to a deal with bondholders to repay them roughly $44 million of the $659 that they originally invested in the construction of the 3.9-mile long monorail.

The bankruptcy judge, however, was concerned that the company would not be able to meet these payments, even though they represented costs of less than one-tenth the bondholder's original debts.

The judge said that the monorail’s projected income fell short of meeting these obligations. He also observed that, even if the company has higher income than expected, it will have to spend millions of dollars in the coming years on maintenance for its aging equipment.

In response, the monorail company claimed that its income would far outpace the court’s expectations because of increased ridership due to the construction of a new shopping district on the Las Vegas strip, and the reopening of the popular Sahara casino.

The company also argued that it would be eligible for increased federal funding at lower interest rates after it leaves bankruptcy.

It remains possible that the monorail’s bankruptcy could be finalized by the end of the month. The end of the bankruptcy will provide welcome relief for the monorail company, which filed for Chapter 11 bankruptcy in January of 2010, although the monorail has continued to operate during the bankruptcy case.

According to the Las Vegas Sun, the monorail saw a 30 percent decrease in ridership over the few years leading up to the filing, which was directly tied to a dramatic dip in the number of tourists visiting Sin City after the economy collapsed in 2008.


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