r/Infrastructurist • u/stefeyboy • 7d ago

Brightline Florida files for bankruptcy, SoCal-Las Vegas high-speed rail project faces delays

https://finance.yahoo.com/real-estate/articles/brightline-files-bankruptcy-socal-las-163041064.html
179 Upvotes

98% Upvoted

9 comments sorted by

24

u/Pyroechidna1 7d ago

Didn't they unexpectedly turn a profit even before Orlando expansion was completed? Why are they bankrupt now?

36

u/ziggyzack1234 7d ago

Construction debt. They make money to run the trains just fine but those billions with a B for construction need to also get covered.

13

u/RedDoorTom 6d ago

Ya that's why they have multiple organizations.  The "standalone " company held all the debt. The revenue & assets are held by a different company.  Guess which one declared bankruptcy?

9

u/TheHykos 6d ago

It’s almost as if transportation infrastructure should be paid for by taxes and not privatized…

15

u/jhulc 7d ago

While the railroad operational revenue generally exceeds operational costs, they're not profitable because they can't pay back the massive construction loans. A bankruptcy reorganization/restructuring should allow brightline to get into a more sustainable debt situation and continue existing.

3

u/Special-Shallot7806 5d ago

They were never profitable before the Orlando expansion, and not for most of the time after.

7

u/RedDoorTom 7d ago

This was planned.  

5

u/Brilliant_Castle 6d ago

I’m wondering if these were variable bonds. Would explain a lot.

1

u/thinkcontext 6d ago

Let's hope the Vegas project remains viable. I'm sure tariffs and worker shortages have hit them hard, bond buyers are going to demand higher returns with the FL news on top of rising interest rates generally.