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Monday, March 16, 2015

Ind. Gov't. - "Lake, LaPorte County consortium says state was hostile to Indiana Toll Road bid" [Updated twice]

Carrie Napoleon reported in the Gary Post-Tribune in a story that begins:

An Indiana Finance Authority hostile to the idea of state control of the bankrupt Indiana Toll Roadis being blamed for the lack of consideration of the bid by the Lake and LaPorte counties consortium to acquire the toll road lease, consortium members say.

IFM Investors announced Wednesday it was chosen as the successful bidder for the toll road lease. The IFA approved the deal hours after the $5.725 billion bid was presented in federal bankruptcy court.

Shaw Friedman, LaPorte County attorney, said in a statement it should be clear "that IFA has been hostile to the County Consortium bid from day one and it appears they'd rather have excess revenues from the Indiana Toll Road lease go to an offshore hedge fund than be reinvested in Northwest Indiana for the next 67 years."

He said county consortium members were treated in a fairer fashion in the bidding process by the UBS, the bank charged with administering the sale, and the New York-based Special Creditors' Committee than by the Indiana Finance Authority, "which has been unremittingly hostile to the notion of a public bid from the outset."

"The outrageous written questions IFA generated last week to the County Consortium were further evidence of that, and the fact the agency issued a press release rubber-stamping the IFM deal within hours of the announcement today without seeking to leverage their approval for any benefits to the state or our counties is further evidence of their bias, predisposition and hopeless incompetence," Friedman wrote in an email.

IFA spokeswoman Stephanie McFarland disputes that account. She said in statement Friday the U.S. Bankruptcy Court approved the process by which a new toll road operator would be selected.

McFarland said that as part of the court-approved selection process, IFA and its team of legal, financial and engineering experts provided input on all of the proposals presented and "prequalified" viable bids to move forward in the process.

"Mr. Friedman's bid was among those prequalified to move forward for consideration as a viable option," she said.

This March 9th ILB post collects some earlier stories.

[Updated March 18th]
Keith Berman of the NWI Times had a related story March 17th headed "Counties made Toll Road pitch in NYC."

Berman has a story today headed "Indiana Toll Road execs to share $2.45 million bonus," that begins:

The rich price fetched last week for the Indiana Toll Road means the top five executives of its bankrupt operator should be sharing a $2.45 million bonus pool as a reward for their services.

ITR Concession Company CEO Fernando Redondo and the four executives under him will receive the money when IFM Investors closes on its $5.72 billion offer for the road, under the terms of an order issued in January in U.S. Bankruptcy Court. The closing is expected within months.

The order for the payout was issued by Judge Pamela Hollis after the special committee overseeing the sale submitted a motion to provide incentives for top Toll Road executives helping to market the road.

[Updated again on March 18th] A reader points to this quote later on in today's story:
The filing of the incentive plan motion in early January offered the first glimpse of the rich price expected by those conducting the bidding. The price offered by IFM and accepted last week in a definitive purchase and sale agreement is $1.92 billion more than the road fetched just nine years ago when the lease was auctioned off by the state of Indiana.

Posted by Marcia Oddi on March 16, 2015 10:26 AM
Posted to Indiana Government