Detroit objects to American Roads' tunnel lease assumption request

By Caroline Salls

Pittsburgh, Aug. 14 - The City of Detroit objected to American Roads LLC's motion to assume the Detroit-Windsor Tunnel leases with the city, according to an Aug. 14 filing with the U.S. Bankruptcy Court for the Southern District of New York.

Detroit said the assumption motion should be denied because American Roads has not provided adequate assurances of future performance and incorrectly asserts a cure amount of $0.

The city said the company is looking to quickly force Detroit, which is in the midst of its own complex restructuring, into an ongoing relationship with a financially distressed tunnel operator that will be owned by a former monoline insurer with no experience in this line of business.

"The Detroit-Windsor Tunnel is a critical international roadway at the heart of downtown Detroit that is used by thousands of individuals on a daily basis," the city said in the objection.

"The city needs a reliable partner in its operation. Yet, contrary to the representations in the motion, the debtors' performance under the agreements is already suffering.

"The debtors are currently in default, and they have not provided adequate assurance of their future performance.

"Simply put, acceding to assumption is a risk that the city, with obligations to its own creditors, cannot accept."

American Roads, a Detroit-based toll facilities operator, filed bankruptcy on July 25. Its Chapter 11 case number is 13-12412.

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