The dissenting bondholder in the proposed settlement for the Ambac bond insurance policy issued for the bankrupt Las Vegas Monorail wants its dispute with the bond trustee moved to Nevada.
Both the nonprofit monorail organization and the parent of Ambac Assurance filed for Chapter 11 bankruptcy in 2010, and the Wisconsin insurance regulator placed the monorail policy in a segregated account of Ambac’s most toxic policies.
Bondholder Eaton Vance opposes the settlement trustee Wells Fargo NA negotiated with the other large holders of the $451 million in first-tier monorail revenue bonds, issued by the Nevada Department of Business and Industry.
Those holders agreed to a settlement in which the Ambac policy would be commuted for an upfront payment of $111 million in cash, plus some surplus notes.
Wells Fargo went to probate court in Minnesota seeking approval for its plan to require all bondholders to agree to its commutation settlement.
Eaton Vance, which prefers to stay out of the settlement agreement, removed the case to the federal court in Minnesota.
Earlier this month, a federal judge in Minneapolis denied Wells Fargo’s motion for an expedited hearing of its request to remand the case back to the state courts.
On March 25, Eaton Vance filed a motion to move the proceedings to the federal court in Nevada, where the ongoing monorail bankruptcy case is taking place.
“The central issues in the case involve a trust indenture subject to Nevada law and Nevada statutes interpreting the rights and powers of a trustee. The trust relates to bonds issued under Nevada law for a municipal project in Nevada,” Eaton Vance’s attorneys wrote in their motion.
“Nevada should be an equally convenient place to resolve this matter for the parties and witnesses,” the motion said. “In short, this controversy has virtually no connection to Minnesota other than it is the home to the trustee’s work-out group,” the motion said.
Wells Fargo had not filed a response as of Thursday.
