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Las Vegas Monorail trustee does not have to withdraw account appeals
By Caroline Salls
Pittsburgh, April 5 - Las Vegas Monorail first-tier bond trustee Wells Fargo Bank, NA does not have to follow bondholder instructions to withdraw appeals related to the rehabilitation plan for an Ambac Assurance Corp. segregated account, according to a notice from the trustee to bondholders.
Payment of principal and interest on the first-tier bonds is insured by a surety bond and a municipal bond insurance policy issued by Ambac Assurance. The trustee said those policies were included in the segregated account.
The Commissioner of Insurance of the State of Wisconsin launched rehabilitation proceedings in the Circuit Court of Dane County, Wis., in connection with the account in March 2010.
Wells Fargo said the rehabilitation court issued orders that prohibit payment on any claim against the segregated account, including claims on the surety bond and bond insurance policy and further prohibit any enforcement action against the account.
According to the notice, the commissioner, Ambac and a group of first-tier bondholders reportedly representing at least 73% of the principal amount of and accrued interest on the first-tier bonds directed the trustee to withdraw its objections to the rehabilitation plan approved by the circuit court and to dismiss related appeals.
The trustee said it refused to withdraw the appeals and the dispute was sent to arbitration. Wells Fargo said the arbitrator ruled on March 30 that the trustee is not required to follow the direction to withdraw the appeals.
Las Vegas Monorail, a Las Vegas non-profit monorail operator, filed for bankruptcy on Jan. 13, 2010 in the U.S. Bankruptcy Court for the District of Nevada. Its Chapter 11 case number is 10-10464.
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