The debt-ridden private company running the Indiana Toll Road intends to transfer its operations to a new entity under a bankruptcy filing planned for Monday, but a spokeswoman stressed Saturday that tolls, motorists and employees won't be affected.
Chicago-based ITR Concession Co. announced late Friday it would file bankruptcy papers Monday and sell all of its assets including all rights to the Toll Road.
"Drivers, customers, employees and maintenance/operations of the road will see no impact due to this process," ITR spokeswoman Amber Kettring said in an email. "The Lease agreement is still in effect."
ITR's debt stems from a 2006 deal under which its parent company, the Spanish-Australian consortium Cintra-Macquarie, paid Indiana $3.8 billion up front for a 75-year lease of the 157-mile tollway traversing northern Indiana. But ITR's toll revenue hasn't met expectations, and the company missed a June debt interest payment.
"Any new operator would have to first be approved by the Indiana Finance Authority," Kettring said.
If ITR is unable to sell the Toll Road rights, the company will reorganize its debt, she said.
The Finance Authority is withholding comment until it sees the bankruptcy filing, spokeswoman Stephanie McFarland said.
The Finance Authority notified ITR in an Aug. 26 letter that the company was in risk of default of its 2006 contract and gave the company 90 days to comply by paying its debts and maintaining sufficient capital to run its business. The Associated Press obtained a copy of the letter.
ITR said the prepackaged bankruptcy plan to be filed Monday was supported by more than 85 percent of its secured lenders and more than 98 percent of voting creditors. That's greater than the threshold of lender support required for approval of the plan.
A new Toll Road operator would be subject to the terms of the original lease agreement, and any future toll increases remained subject to restrictions in the lease contract, ITR said.
However, state Rep. Patrick Bauer, who was the House minority leader in 2006 when the General Assembly passed legislation allowing the lease, was skeptical even before the announcement of an intended bankruptcy plan. He said a new operator would look for ways to increase revenue, which most likely would include higher tolls.
"It was a bad deal for the state," said Bauer, a South Bend Democrat.
Senate Appropriations Chairman Luke Kenley said he's confident that protections lawmakers put in place in the legislation will protect the state's interests.
The Toll Road employs nearly 300 people.
Paula Chirhart, a senior vice president for ITR parent company Macquarie Group Ltd., told The (Munster) Times that the Chicago Skyway, which has essentially the same operating company, would not be affected by the bankruptcy filing. The Skyway connects Chicago with the Toll Road in northwestern Indiana.