Indiana Supreme Court Clarifies Indiana Law In Distinguishing A True Lease From A Sale Subject To A Security Interest
Indiana Trial Court Oversteps Its Authority In Proceedings Supplemental

Indiana Toll Road-Related Foreclosure?

A July 7th article from Bloomberg Businessweek concluded that the Indiana Toll Road, which had been "held up as an example of public-private partnerships, shows no signs of breaking even for its conglomerate."  LINK.  Given the political backrop, it's hard to imagine  that it would ever come to this - but the article suggests the possibility of a foreclosure  action involving the project:

The private investors haven’t made out so well. Had the road been profitable, they stood to make millions per year over the life of the 75-year project. As it is, they have not been able to get past the debt they incurred winning the bid. They have met their annual debt payments only by borrowing money and may default before loans mature in 2015, according to disclosure documents from Macquarie Atlas Roads, one of the investors. The project’s 2010 prospectus said that revenue from the highway is “expected to remain insufficient to cover debt service obligations over the medium term.” The document cautions that “any default under the loan documents may lead to lender actions which may include foreclosure of the project assets or bankruptcy.”

The "project assets" upon which the lenders would foreclose are not detailed in the article.  From what little I know about the deal, the lenders would not be able to repossess (own, via a sheriff's sale) the interstate itself because the State of Indiana maintains ownership of the roadway.  The investors' (borrowers') rights to the Toll Road arise out of a long-term lease arrangement. 

If and when additional details unfold about the project's problems and/or the lenders' remedies upon default, I'll post the information here.  It could be a very interesting and unique case, particularly from a secured lender's perspective, if the matter were ever litigated.