Over the last several years we have heard stories of wage-earners filing Chapter 13 cases because their mortgage is under water after their adjustable-rate mortgage adjusted in the wrong direction. We have heard of small businessmen filing Chapter 7 liquidations because revenues are not keeping up with incurred debt. But until now few have heard of highways filing for Chapter 11 bankruptcy protection. No, that is not a typo. Highways need to reorganize their debt as well.
Well not highways per se but rather the companies or authorities that own them do. Macquarie Group Ltd. (MQG) and Ferrovial SA (FER), the affiliates which own the operator of a toll highway sought bankruptcy protection to keep an Indiana toll road in business. The companies invested $3.5 billion in a 75-year lease expecting traffic on the highway to generate sufficient revenue to justify the expenditure. Instead, as the flow of traffic on the artery abated, it became unfeasible to maintain under its current structure. “The global economic recession stifled interstate commerce, which depressed the interstate trucking activity that accounts for a significant part of the toll road’s revenues,” Fernando Redondo, the company’s chief executive officer, said in a court filing. Accordingly, they are offering a creditor-backed plan in an Illinois bankruptcy court in an effort to keep the toll road open.
Ironically, this is not the first road to run in to tough financial territory. The operators of the South Bay Expressway, a 10-mile toll road near San Diego as well as the company running the Southern Connector, a 16-mile perimeter near Greenville, South Carolina, have also filed for bankruptcy protection.
ITR Concession Co. had acquired the rights to operate the road in 2006 from the Indiana Finance Authority, according to a company statement. It now seeks to sell its shares through a competitive process or restructure with $2.75 billion in new debt with almost all the equity going to pay secured creditors.
Not only do people need relief from back-breaking debt. Even roads these days need some new liquidity to keep from hitting a dead end.
In Albuquerque, Giddens & Gatton Law, PC has bankruptcy attorneys who offer expert handling of Chapter 7, Chapter 11, Chapter 12 and Chapter 13 bankruptcy cases and can provide advice over which type of bankruptcy action fits one’s particular needs. The firm represents many debtors and creditors in Albuquerque, Santa Fe, Taos, Raton, Farmington, Gallup, Grants, Roswell, Los Lunas, Placitas, Belen and the rest of New Mexico. Contact Giddens & Gatton Law, PC at (505) 633-6298 to set up an appointment or visit the firm’s website at giddenslaw.com. Giddens & Gatton Law, PC is located at 10400 Academy Road N.E., Suite 350 in Albuquerque, New Mexico.