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Tribal Casino Defaults May Sink Creditors

Foxwood failure sparks debate over 'sovereign nation' status

By Jane Yager,  Newser Staff

Posted Nov 19, 2009 2:17 PM CST
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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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COMMENTS
Showing 3 of 7 comments
So_Cal_Larry
Nov 20, 2009 12:24 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.
Snarfeh
Nov 20, 2009 3:05 AM CST
Woo hoo! Way to go, natives of this continent! Here's hoping no one can touch ya....:::toast:::
Shannonals
Nov 19, 2009 10:36 AM CST
How exactly are your comments supposed to be funny Fatquah?

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

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