Las Vegas Monorail Company considering filing for Chapter 11
The goal of filing for chapter 11 bankruptcy is ultimately an attempt to restructure debt. In the end, this will allow the Las Vegas monorail system to expand to the airport and other resort properties.
Why do they need to re-structure? Simple, the company hasn’t earned enough money to pay off the $650 million in construction and start up cost.
Initially, it was estimated that 20 million passengers a year would fork over $2.50 to utilize the monorail. Instead, the 20 million estimate turned out to be grossly inflated, resulting in revenue not reaching targets.
3 options are now available: Negotiate a new agreement w/out filing for Chapter 11, negotiate a new agreement that does inluding filing for chapter 11, or finally… just file for chapter 11 w/out a new agreement in place.