Tuesday, April 2, 2013

Chukchansi May Default AGAIN on their Bonds. Time to STOP Gaming at Their Casino?

Marc Benjamin of the FRESNO BEE, who has been the standard bearer for the media on disenrollments at Chukchansi and their bad blood has the story on Chukchansi AGAIN facing Default
The Chukchansi tribe is in danger of defaulting on its bonds for Chukchansi Gold Resort & Casino because of ongoing political bickering between two tribal council factions.

Rabobank, which holds about $12 million in deposits for the Chukchansi Economic Development Authority -- the casino financing agency run by the tribal council -- has frozen a bank account that pays down the bond notes.

It will not pay out the bonds until the two sides come to a resolution, a Rabobank lawyer said Monday.

The deadline to pay the bonds was Monday. The bonds are now under a 30-day grace period before a "technical default," lawyers said.

Last year, facing default on more than $300 million in bonds for its casino off Highway 41 near Coarsegold, the tribe reached a deal with bondholders for a new financing plan that pushed the payback of loans to 2020. The tribe pays its investors at 9.75% interest.

Under its agreement with bondholders, the tribe uses the first $1 million in profits each month from the casino to pay for tribal programs such as housing, utilities, tuition and monthly payments to tribe members, a representative of one of the factions said Monday.

Rabobank's move "threatens the very existence of the tribe as a functioning government," Richard Verri said.

Verri, who has offices in Fresno and the Phoenix area, represents a group led by Reggie Lewis that claims to be the rightful tribal council.

So does a group led by Nancy Ayala, which says it won a temporary restraining order against the Lewis group through a tribal court.

Rabobank has appealed that ruling, and lawyers for the Lewis group say Ayala's group improperly used the tribal court to get its restraining order.

The Chukchansi tribal court was created just last year when the tribe's finances were first being questioned by bondholders.

Ayala told bondholders in a conference call Friday that the tribal council wants to pay them with money in the Rabobank account, but the bank is unwilling to release the funds.

The lawyer for Ayala's council, Les Marston of Ukiah, said that Wells Fargo, which holds notes for the bondholders, can order Rabobank to pay out of its account.

"It is Rabobank, not the tribe, that is causing the payment not to be made," Marston said.

Marston said Ayala's group has a quorum of four elected members, making them the rightful tribal council.

Verri said the Lewis group also has a quorum.

Rabobank lawyer Chet McGensy said his bank just wants the sides to settle their differences.

"The bank has not formally taken sides and is continually working with all parties to facilitate and help resolve these issues," said McGensy, who is based in Roseville. "The hope of the bank is that the parties can come to an amenable resolution."

A representative of the federal Bureau of Indian Affairs didn't return a call Monday seeking comment.

But last month, Troy Burdick of the BIA said, "I have met with both sides in this matter and have offered mediation services to assist them in resolving the current situation."  OP:  Why does Burdick rhyme with "limp dick"? He did NOTHING while violence reared up at the Picayune Rancheria last year.

In February, for the second straight year, factions began to claim they are in charge of the tribal government. Ayala, the tribal chairwoman and a descendant of the Wyatt family of original tribal members, announced a new board was taking over after she was handed a referendum signed by descendants of the original rancheria landholders demanding replacement of the tribal council.

 OP:  It might be time for the employees of the casino to think about themselves and possibly have a sickout on the weekend.

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