Published Wednesday, Jan. 13, 2010 | 3:07 p.m.
Updated Wednesday, Jan. 13, 2010 | 7:17 p.m.
Beyond the Sun
The Las Vegas Monorail Company filed for Chapter 11 bankruptcy protection Wednesday, but will continue to operate, company officials said.
In a statement, President and Chief Executive Curtis Myles said the system has suffered as fewer people have visited Las Vegas.
“The current economic downturn, including a 30 percent decline in convention traffic to Las Vegas, has increased the financial strain on the Monorail, like it has with every other tourism-dependent Las Vegas company,” Myles said. “Despite these challenges, the Las Vegas Monorail generates sufficient revenue to pay its operating expenses as well as a portion of its finance costs, and that will make it possible to restructure the company’s debt through the Chapter 11 process.”
Myles said the company won’t reduce services or hours of operation while going through the restructuring.
The 3.9-mile system runs on an elevated track linking casinos and the Las Vegas Convention Center east of the Strip and is the only privately owned public transportation system in the United States.
“No federal, state or local subsidy was used for the system,” Myles said. “As such, the filing will not affect the state’s bond rating or finances. We are confident that this reorganization is the most effective strategy to ensure our continued operation, fulfilling the purpose of providing cost-effective, efficient, green transportation for visitors and locals within the Las Vegas Resort Corridor.”
In documents filed in U.S. Bankruptcy Court on Wednesday, the monorail listed its debts as being between $500 million and $1 billion owed to between 200 and 999 creditors. The documents indicate the company has assets estimated to be worth between $10 million and $50 million.
The monorail’s largest creditor is Bombardier Transit Corporation, according to the court filing. The monorail owes $293,450 to Bombardier, which operates and maintains the trains.
Other creditors listed in court documents include NV Energy, Allegiance Direct Bank and Anthem Blue Cross Blue Shield, which each are owed less than $60,000.
Sun columnist Jon Ralston was the first to report the bankruptcy on Wednesday.
The monorail carried 6,005,024 passengers in 2009, with revenues of $26,974,513 for the year. That is down from a peak passenger count of 7,917,613 in 2007, when the system had revenue of $30,252,305.
Since opening, the line has carried more than 40 million riders, Myles said, and during the recent Consumer Electronics Show, the line carried nearly 135,000 people in four days.
The monorail has suffered from a poor local image and frequent calls to expand its service to McCarran International Airport.
Myles said the company still plans to expand the system to the airport, but has to finish the bankruptcy process first.
“We have long expressed the importance of expanding our system to the airport and other points within the resort corridor,” Myles said. “It is necessary that the company first get through this process to address its current capital structure before moving forward with those plans.”
The company was formed in 2000 and acquired the original one-mile monorail that connected MGM Grand and Bally’s. An expanded rail line going north to the Sahara then opened in July 2004.
Monorail board member Bruce Woodbury said in December that filing for bankruptcy to reorganize the company’s debt would be necessary.
The company hasn't raised enough money from fares to pay off the $650 million in construction and startup loans floated to build and start operating the expanded system, Woodbury said.
That debt kept the company from getting financing for the $500 million extension to the airport and other Strip resorts, Woodbury said.
The Associated Press contributed to this report.