A northern Indiana county's commissioners have turned to an investment bank to lead a proposed seven-county consortium that would bid on the Indiana Toll Road's lease.
Private tollway operator ITR Concession Co. filed for bankruptcy protection in September, citing more than $6 billion in debt. A federal bankruptcy court judge has given the Chicago-based company permission to sell the 75-year lease it holds on the road to help pay back its creditors.
Investment bank Piper Jaffray of Minneapolis recently delivered a report to LaPorte County that shows the toll road's cash flow could support a public entity bid on the lease and produce enough cash to benefit surrounding counties.
County Commissioner David Decker said having a not-for-profit established by the seven counties that the 157-mile road passes through bid on the lease would be better than allowing another private firm to gain control of the road.
"The nonprofit would not be beholden to shareholders who siphon all the money off. We want to put money back into the road," he said.
County Attorney Shaw Friedman said LaPorte County is negotiating with Piper Jaffray to help in preparing a bid for the toll road lease. The county has also retained the Chicago law firm of Goldstein & McClintock.
Piper Jaffray has a long experience in public financing, including Denver's E-470 beltway, which is run by a public highway authority, The Times of Munster reported.
The investment bank's clients also include the Indiana Finance Authority and northern Indiana municipalities.
Decker said LaPorte County's move follows the Indiana Finance Authority's refusal to consider the county's request that the state look into repossessing the toll road after ITR Concession's bankruptcy filing.
"They have not even given us the time of day, so we will go ahead on our own," he said.
Indiana Public Finance Director Kendra York said in an Oct. 21 letter that the state didn't want to take over responsibility for running and maintaining the 157-mile road because doing so would be too costly.
ITR Concession's parent company, the Spanish-Australian consortium Cintra-Macquarie, paid the state $3.8 billion upfront in 2006 for a 75-year lease of the highway. But less-than-expected traffic during the recession and missteps by the company plunged ITR Concession into bankruptcy.