Las Vegas Monorail files first payment for bankrupt LVCVA
The Las Vegas Convention and Visitors Authority made a deposit on the Las Vegas monorail.
A non-refundable deposit of $ 1.8 million was paid to Las Vegas Monorail Co. in connection with the acquisition of the company by LVCVA for $ 24.12 million.
Details of the Chapter 11 monorail bankruptcy have started to emerge since the company filed Monday in U.S. bankruptcy court in Las Vegas. The company confirmed Monday evening that the deposit had been made. On September 1, the LVCVA board of directors voted 12 to 1 to go ahead with a prepackaged bankruptcy plan to purchase the system.
Under the approval, LVCVA agreed to pay up to $ 24.26 million for the 3.9-mile electric transit system. Part of the motivation for acquiring the monorail is to gain control of its non-compete agreement which prevents potential competitors from entering the transportation market on the east side of the strip.
LVCVA worked with The Boring Co. for an underground passenger transportation system that uses Tesla vehicles in dedicated tunnels to move conventioneers across the Las Vegas Convention Center campus to the other.
Elon Musk’s Boring Co. is studying the possibility of expanding the metro system citywide, but would not be able to do so if the non-compete agreement was in effect.
The monorail closed in March due to restrictions imposed to slow the spread of the new coronavirus. Without tariff revenue, the monorail was unable to support its operating expenses.
Monday’s court file lists several previously undisclosed details:
– The monorail company has hired Gerald Gordon, founder and chairman of the Business Restructuring & Bankruptcy department of the Las Vegas company Garman Turner Gordon. Gordon acted as lead counsel for the debtor in bankruptcy cases involving Herbst Gaming Group, Black Gaming Group, Stratosphere Hotel & Casino, Maxim Hotel & Casino, Aladdin Hotel & Casino, Riviera Hotel & Casino, Fitzgerald’s Gaming Corp., American Wagering (Leroy’s Sports Reserve) and Hooters Hotel & Casino.
– The monorail company estimates it has up to 49 creditors and estimates assets and liabilities between $ 10 million and $ 50 million.
– The 20 largest unsecured creditors listed on the record are owed over $ 1.56 million by the monorail company. The first meeting of creditors is expected to take place in early October.
– A resolution approved by the board of directors of Las Vegas Monorail Co. on August 24 recognizes that the monorail was closed on March 18 and was unable to restart. He notes LVCVA’s offer of $ 24,116,387, the total non-refundable deposit of $ 1,791,330 and plans to file for bankruptcy with the LVCVA’s prepackaged offer. Monorail President and CEO Curtis Myles is authorized as a representative of the company.
– Alvarez & Marsal, based in New York, is hired as financial advisor in this matter. Myles is also authorized to engage other experts during the procedure.
LVCVA chairman and CEO Steve Hill told his board that the monorail system would eventually be auctioned off and LVCVA would have to be the successful bidder to acquire it and the money of the acquisition would be used to pay creditors. If the offer was not accepted, the LVCVA would be able to recover the non-refundable deposit from the prospective buyer.