Judge Scopelitis issued an order requiring a $1.9 billion bond. The Indy Star story is here. I seem to recall that the statute allowing such a bond to be required also provides for an expedited appeal process.
Hopefull I’ll be able to post more before too long.
Update You’ll be happy to know that the state doesn’t have any public debt. (Decision at p. 18.) This conclusion is based, in part, by the fact that the General Assembly has appropriated money each year to pay unfunded liabilities such as the Teachers Retirement Fund. The Toll Road is not worth very much to the State, by contrast, because the State has not historically seen fit to raise tolls on the Toll Road.
The Court does not see fit to speculate on the consequences to the Toll Road valuation if the tolls were increased by the General Assembly (Decision at p. 21), but does see fit to speculate that Indiana would be stigmatized and not receive a comparable bid if litigation were allowed to move forward and Indiana was forced to rebid the lease at a later date. (Decision at p. 22-23.)
The Indiana Finance Authority is a “municipal corporation.” (Decision at p. 26) (nevermind its statewide scope.)
The Plaintiffs may proceed with the portions of the lawsuit challenging certain parts of HEA 1008-2005 as impermissible special legislation (e.g. the Perry Township provision.)
The bond is required because the Court decided Indiana doesn’t have any public debt, because the Court decided that selling something less than fee simple absolute rights in the Toll Road as a lease doesn’t constitute a “sale,” and because the Court decided that the Indiana Finance Authority is a municipal corporation.
Yes, yes- it’s a lease. It is, however, the sale of the right to operate the road. Semantics? No more or less than concluding Indiana has no debt, or a ‘municipal’ corporation.
This is a very frustrating decision. Will all litigants now have to post bonds against the potential loss of revenue when suing the state? Will this apply also to other corporations, such as businesses? This decision could have a rather chilling effect.
Mitch Daniel’s has lost 100% of my support. His recent comment about the toll road and not raising tolls since 1985 and the fact that not leasing the toll road and borrowing the money to pay for his pet projects would incur interest clearly shows he know little about mathematics and economics in particular.
The company leasing the toll road projects to make 10 to 12% return yearly. They will do this by raising the toll. This raising the toll is why the company can pay $3.85 Billion to lease the road and still make money. Daniel’s apparently does not understand that Indiana could do the very same thing and cut out the middleman (the company) by simply raising the toll commensurate with the rate of inflation or wage growth. The additional revenues would be equivalent to both principal and interest on any loan. The present value is far more than $3.85 Billion. Our Govenor is selling us out and the court is helping him do it.
The moral is pay me now or pay me more later.
Out with this bum.
If the road is mature with good traffic levels, equity yields of 10-12% seem too high.
Unless there’s serious risk of freezing tolls levels. Mature roads with tolls rising with inflation have low risks, and are known as bond proxies