After racking up about $6 billion dollars in debt, the private-sector operator of a northern Indiana toll road filed for bankruptcy protection Sunday.
Indiana Toll Road Concession Company, LLC claims the 157-mile toll road, which runs through Indiana, between the Ohio Turnpike and Chicago Skyway, has struggled for years with a bad economy and lower-than-expected traffic. From 2007 to 2013 the amount of vehicles passing on the Toll Road decreased by 10.5 percent, according to documents filed with the U.S. Bankruptcy Court in Chicago.
Now the Chicago-based company says it has support from its lenders and creditors for a “pre-packaged bankruptcy plan,” which has already been approved by the majority of creditors.
The ITRCC says that although a new owner is yet to come, trucks and cars will have the same level of access to the road, and the tolls won’t increase.
“Any changes to tolling remain subject to the strict guidelines put in place by the Indiana Finance Authority. The filing does not impact how tolls are set. The lease agreement remains in place unchanged,” the ITRCC said in a statement.
Although the ITRCC claims drivers won’t see any changes, democratic state senator John Broden told Fox 28 he’s not convinced.
“If someone buys this they are going to immediately be confronted with a question of how can we run this thing cheaper?”
Senator Broden says be believes the next company will be looking to make money, cut down costs and will probably do that in the form of fewer employees.
In the filing, ITRCC points out that in 2013 they paid nearly $193 million in debt. They say they only made around $158 million in earnings before interest, taxes and depreciation and amortization.
In 2006, ITRCC, a Spanish-Australian consortium, paid Indiana $3.8 billion upfront for the rights to the 75-year lease, making it the largest highway privatization deal in history.
ITRCC says it has partnered with lenders to come up with a debt restructuring plan and will pursue a sale of the toll road at a bankruptcy auction with the proceeds going towards creditors.
The company will seek approval of its plan from the U.S. Bankruptcy Court in Chicago in 30 days.