Bankruptcy hearings for Monorail begin Tuesday
U.S. Bankruptcy Court Judge Natalie Cox on Tuesday approved a series of motions pushing the Las Vegas Monorail Co. bankruptcy filing forward as an estimated 49 creditors lined up to be paid debts owed by the company.
With the court closed by the coronavirus pandemic, attorneys for creditors participated by telephone in the 25-minute hearing.
The company filed for Chapter 11 bankruptcy protection as part of its sales agreement with the Las Vegas Convention and Visitors Authority.
The LVCVA is set to buy the 3.9-mile electric transit system for up to $24.12 million plus a $1.8 million nonrefundable earnest money deposit.
Part of the motivation for acquiring the monorail is to secure control of its noncompete agreement that prevents potential competitors from entering the transportation market on the east side of the Strip.
The LVCVA has been working with The Boring Co. for an underground people-mover system that uses Tesla vehicles in dedicated tunnels to move conventioneers from one end of the Las Vegas Convention Center campus to the other.
Elon Musk’s Boring Co. is exploring the possibility of expanding the underground system citywide but wouldn’t be able to do so with the noncompete agreement in effect. On Tuesday, the LVCVA announced that The Boring Co. is close to filing for permits to begin building the citywide system.
This isn’t the first time the Monorail has filed for bankruptcy.
Ridership hit its peak around 2007, when the system was transporting around 7 million passengers a year, but in the wake of the Great Recession the company sought Chapter 11 bankruptcy protection in 2010.
Once the company emerged from bankruptcy, it continued to struggle financially and was never able to fund some of the expansions that leaders felt were essential to long-term success.
The monorail company estimated it has up to 49 creditors and estimated assets and liabilities of between $10 million and $50 million in initial filings.
Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on Twitter.
