Las Vegas Monorail gets OK for fifth amended plan of reorganization

By Jim Witters

Wilmington, Del., May 22 - Las Vegas Monorail Co.'s fifth joint plan of reorganizations received confirmation, according to documents filed Monday with the U.S. Bankruptcy Court for the District of Nevada.

As previously reported, judge Bruce A. Markell issued a memorandum on the feasibility of the plan, concluding that the company has addressed issues that led to the rejection of a previous version of its plan of reorganization, and it has shown that it will likely not need further financial reorganization beyond the current case.

The court found that the debt service on Las Vegas Monorail's remaining debt was unsupportable under the rejected version of the plan given the company's projected revenues and capital needs.

Treatment of creditors

Under the confirmed plan, treatment of creditors includes:

• Holders of priority claims will be paid in full in cash;

• Holders of other secured claims will be left unimpaired by the reorganized LVMC;

• Holders of general unsecured claims will receive the lesser of 100% of their claim or a share of $300,000;

• Holders of first-tier bond secured claims, Ambac surety bond secured claims and Ambac insurance secured claims will receive a share of cash pay A bonds. The $10 million of bonds to be issued by Reorganized LVMC carry interest in arrears at 5.5% and a default rate of 7.5%, payable quarterly in cash. The bonds mature on June 30, 2019.

Ambac's contribution and reimbursement rights with respect to the surety bond claims that have not been assigned to the first-tier trustee will be treated by participation in the cash pay A bonds.

The Ambac subrogation rights with respect to the secured claim portion of the Ambac insurance claims are limited to the right to receive the balance of the outstanding payment stream due under the cash pay A bonds after payment of Ambac surety bond secured claims;

• Holders of first-tier unsecured bond claims will receive a share of the cash pay B bonds.

The $3 million of cash pay B bonds to be issued by Reorganized LVMC carry an interest rate of 3% through Dec. 31, 2015 and 5.5% on and after Jan. 1, 2016. The bonds mature on June 30, 2055;

• Holders of second-tier bond claims will receive no distribution under this plan.

The debtor stipulated with the second-tier trustee, first-tier trustee and majority bondholders to terminate the automatic stay to allow the second-tier trustee to file a petition with the Minnesota State Court seeking authority to distribute the second-tier debt service reserve fund after distributing $400,000 to the first-tier trustee for expenses.

The petition was granted by the Minnesota court.

• Third-tier bond claims will receive no distribution.

• The director will receive no property other than any funds remaining in the indemnification account within the contingency fund; and

• Holders of subordinated claims will receive no distribution.

The company, a Las Vegas non-profit monorail operator, filed for bankruptcy on Jan. 13, 2010. The Chapter 11 case number is 10-10464.

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