Windsor

U.S. operator of Detroit-Windsor Tunnel files for bankruptcy

American Roads LLC, the privately owned operator of the international border crossing tunnel that links Detroit to Windsor, Ont. filed for bankruptcy on Thursday, citing reduced traffic.

American Roads LLC manages international crossing for Detroit and Windsor, traffic flows as usual

American Roads LLC's bankruptcy filing was not the result of last week's petition for bankruptcy by the City of Detroit.

American Roads LLC, the privately owned operator of the international border crossing tunnel that links Detroit to Windsor, Ont. filed for bankruptcy on Thursday, citing reduced traffic.

The bankruptcy was not the result of last week's petition for bankruptcy by Detroit, although the city's problems contributed to the company's difficulties, Neal Belitsky, American Roads' chief executive, said in court documents.

American Roads is seeking to restructure $830 million US in debt. Traffic volumes fell short of projections made in 2006 when it took on its debt, according to court documents.

"We fully expect that our operations will continue without interruption during this process, and it will remain business as usual. The filing is not expected to negatively affect our employees or customers. Tolls are not expected to increase as a result of this action," American Roads LLC CEO Neal Belitsky wrote in an email to Radio-Canada. "Under the prepackaged plan, we will emerge as a stronger company without any financial debt." 

The company blamed a decline in the population of the Detroit area for the drop in traffic through the Detroit-Windsor Tunnel.

Detroit's population has fallen from a peak of 1.8 million in the middle of last century to under 700,000 today.

Windsor Mayor Eddie Francis told CBC News he has "no concerns" about the bankruptcy filing.

He said there is no way the City of Windsor can buy the U.S. half of the tunnel because it's still owned by Detroit and American Roads LLC is under contract to manage the tunnel for another seven years.

The company operates the Detroit-Windsor Tunnel on behalf of Detroit and Windsor with overall responsibility.

American Roads LLC is responsible for:

  • Tolling.
  • Maintenance.
  • Safety and security.
  • Customer and government relations.
  • Capital planning.
  • Information technology.

Detroit sought Chapter 9 bankruptcy protection last week to restructure $18 billion US in retiree and bond obligations. The U.S. Bankruptcy Court in Detroit will consider the city's eligibility for bankruptcy next month.

The case is In Re American Roads LLC, U.S. Bankruptcy Court,  Southern District of New York, No. 13-12412.

The City of Windsor has hired its own lawyer to monitor the bankruptcy proceedings in New York.

Francis said if the U.S. side of the tunnel is ever up for private sale, the City of Windsor will move to buy it.

American Roads LLC, owned by infrastructure investor Alinda Capital Partners LLC, also indirectly owns four toll roads in Alabama.

With Files from CBC