American Roads LLC, which operates highways including the mile-long Detroit Windsor Tunnel linking the U.S. with Canada, sought bankruptcy court protection, citing $830 million in debt related to swaps and bonds.
The Detroit-based company listed more than $100 million in assets in Chapter 11 papers filed today in U.S. Bankruptcy Court in New York.
The filings “are not the result of the recent bankruptcy filing of Detroit, although Detroit’s financial situation has contributed to the difficulties,” Chief Executive Officer Neal Belitsky said in court papers.
Traffic-related revenue declines from toll operations, most in Alabama, involve “the economic recession, the volatility of gas prices, reduced travel and discretionary spending,” toll increases, Congressional mandates for increased documentation, and events including the Deepwater Horizon BP spill in the Gulf of Mexico, a tornado “and a declining population in the Detroit area,” Belitsky said.
Among the company’s largest unsecured creditors listed in court papers are holders of about $500 million in bonds, with the trustee listed as Bank of New York Mellon.
The case is In re American Roads LLC, 13-bk-12412, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
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