Las Vegas Monorail files bankruptcy; Ambac seeks dismissal, citing municipality status

By Caroline Salls

Pittsburgh, Jan. 14 - Las Vegas Monorail Co. filed for Chapter 11 bankruptcy Wednesday in the U.S. Bankruptcy Court for the District of Nevada to address its capital structure.

Municipal bond insurer Ambac Assurance Corp. has asked the court to dismiss the bankruptcy case, claiming that Las Vegas Monorail should be classified as a municipality under the Bankruptcy Code and is therefore not eligible to be a Chapter 11 debtor.

As a result, Ambac said the company is only eligible to file a Chapter 9 bankruptcy case.

According to a statement from president and chief executive officer Curtis Myles on the company's web site, "the current economic downturn, including a 30% decline in convention traffic to Las Vegas, has increased the financial strain on the Monorail, like it has with every other tourism-dependent Las Vegas company.

"Despite these challenges, the Las Vegas Monorail generates sufficient revenue to pay its operating expenses as well as a portion of its finance costs, and that will make it possible to restructure the company's debt through the Chapter 11 process," Myles said.

"The Las Vegas Monorail is the only public transportation system in the country that is run without public funding, meaning no federal, state or local subsidy was used for the system.

"As such, the filing will not affect the state's bond rating or finances."

According to court documents, Las Vegas Monorail has $10 million to $50 million in assets and $500 million to $1 billion in debt. The company did not list any unsecured creditors with claims of $1 million or more.

The company is a Las Vegas non-profit monorail operator. The Chapter 11 case number is 10-10464.

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