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TUESDAY, FEBRUARY 9, 2010
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 WHOSE LAW APPLIES? 
8

Tribal Casino Defaults May Sink Creditors

Foxwood failure sparks debate over 'sovereign nation' status

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(Newser) – As the Native American tribe that own the Foxwoods Resort Casino in Connecticut looks poised to become the biggest defaulter yet on tribal casino debt, holders of billions of dollars of tribal debt are questioning whether US laws apply to tribes operating as sovereign nations. “With casinos such as Foxwoods located on sovereign tribal land potentially out of reach of US bankruptcy law, it remains unclear whether creditors could enforce their rights,” an observer told the Financial Times.

The Foxwoods default will serve as a litmus test for many legal issues in tribal debt. If a tribe is considered a governmental unit, it may not qualify for Chapter 11 bankruptcy protection. It is also uncertain whether Foxwoods creditors could seize or purchase assets or receive equity in exchange for debt forgiveness, as often occurs in debt restructuring.

Ellaina Astras of New York gambles at MGM Grand at Foxwoods during the grand opening Saturday May 17 2008 in Ledyard, Conn.
Ellaina Astras of New York gambles at MGM Grand at Foxwoods during the grand opening Saturday May 17 2008 in Ledyard, Conn.   (AP Photo/Douglas Healey)
Richard Miesch of North Stonington Conn. gambles at a slot machine in the MGM Grand at Foxwoods during the grand opening Saturday May 17 2008 in Ledyard, Conn.
Richard Miesch of North Stonington Conn. gambles at a slot machine in the MGM Grand at Foxwoods during the grand opening Saturday May 17 2008 in Ledyard, Conn.   (AP Photo/Douglas Healey)
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8 comments
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Yourself
Nov 19, 09 2:33 PM CST
and it all comes back to possibly bite them in the ass.. the funny thing about it, the big casino companies helped fund these tribal casinos, open casinos in macau and other foreign cities, and then ask "why aren't people coming to Vegas?!?!" Well, simple, they don't have to if they have a similar product in their own backyards now do they?!? Their stupidity drives me nuts. Reply
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+1
Reader83544188
Nov 19, 09 2:34 PM CST
Feds give piles of tax dollars to Indian tribes who blow it and are destitute again! Great!! Reply
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-6
IN RESPONSE:
So_Cal_Larry
Nov 19, 09 2:43 PM CST
Truth be told, the Feds have been screwing the Native Americans for hundreds of years, now. The Feds have stolen their lands, destroyed their property, destroyed their lives, packed them like sardines on 'tribal lands', deprived them of adequate health care, deprived them of adequate education, etc. etc. etc. And, the Feds did NOT fund their casinos. These casinos, like these gigantic projects in Las Vegas, were built with borrowed money, with expected profits (the house always wins) paying off the debt, and making Indian lives better. This casino may default. So have other big projects in Las Vegas recently gone bust. Finally, people are realizing what a waste of limited resources gambling is, especially when the odds are against you.
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+9
IN RESPONSE:
davjc09
Nov 19, 09 2:52 PM CST
I would argue that people aren't realizing they arent going to win at the casinos. Most people know they'll lose money at the casinos. And in times like these people don't have a lot of income that they can blow.
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0
IN RESPONSE:
So_Cal_Larry
Nov 19, 09 6:24 PM CST
And, incidentally, if anyone ever asks what happened to the millions upon millions of bison which roamed the plains, the simple, true answer is that they were slaughtered and left to rot in order to deprive Native Americans of food. In short, if the Feds couldn't steal and beat them into submission, then starve them to death. Whatever Native Americans get on their own behalf, they are entitled to. Period.
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+3

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bankruptcy • debt • casino • default • Native Americans • Foxwoods


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