Thursday, June 20, 2013

WHERE is Chukchansi's MONEY Asks Wells Fargo. ANOTHER DEFAULT Looming?

 The ongoing leadership dispute at the Picayune Rancheria of Chukchansi Indians has put the tribe at risk of defaulting on its bonds for Chukchansi Gold Resort & Casino, according to a lawsuit filed Tuesday in New York.

A $250.4 million agreement was reached last year when Chukchansi's economic development authority restructured its financing after the tribe struggled to pay its debts.

But the tribal dispute over who controls the Coarsegold casino's funds left the development authority unable to make its full May payment.

"The actions of the tribal parties and individual defendants endanger the collateral (casino revenue) and place the financial well-being of the casino in danger," the suit filed by Wells Fargo Bank said.

The suit is against the tribe, its casino-affiliated corporations and commissions, competing tribal council factions, as well as three financial institutions that hold proceeds from the casino.

Wells Fargo holds the note for casino investors. The Chukchansi Economic Development Authority agreed to a 9.75% interest rate to restructure its debt.

The tribe was supposed to pay off $310 million in loans last year, but couldn't make the payments. Instead, the tribe arranged an agreement with bondholders to restructure its debt to be due in 2020 and allow a longer-term payback for much of the remaining loan. The previous interest rate was 8%.

Wells Fargo declared itself "an innocent bystander" in the tribal dispute between two factions that contend they represent the tribe -- one led by Reggie Lewis and the other by Nancy Ayala.

The bank's lawyers said Wells Fargo has "done everything it can to resolve the issue consensually, but is left with no choice but to seek the court's intervention" by filing the suit.

The Ayala group took control of the tribal business complex and casino after a February referendum the Lewis faction contends was unconstitutional.

The Lewis group then took control of a Rabobank account used to pay off casino debt. Rabobank officials didn't recognize the Ayala group's leadership and the Ayala group refuses to deposit money into the Rabobank account.

Since the last week of February, "presumably because of the disputes," the tribe stopped depositing revenues and cash into the Rabobank accounts, which violates the agreement with Wells Fargo and the tribe's bondholders, the suit said.

The Rabobank account is designed to use proceeds from the casino and make twice yearly bond payments of $11.93 million.

A partial payment was made in May, which constitutes "an event of default," the lawsuit said.

Wells Fargo lawyers say money was available for the full payment if not for the ongoing factional dispute.

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1 comment:

Anonymous said...

EVERYONE GO TO PALAWATCH AND READ THE LETTER CHAIRMAN SMITH SENT OUT RECENTLY SAYING IN HIS OWN WORDS UNKNOWLINGLY THAT MARGAIRTA BRITTEN IS FULL-BLOOD AND NOT HALF AS HE'S BEEN CLAIMING TO DISENROLL MEMBERS. See the truth always comes out eventually! I'd like to see him explain this one. He will just say the federal gov't made a mistake like the Pala elders did in the 60's and the BIA did in the 80's who all had Margaita as full blood.