Foxwoods defaults on bond payments
Foxwoods Resort & Casino failed to make a November 16th interest payment to bondholders. They failed to make a measly $21 million dollar bond payment. They couldn't come up with $21 million!!!
Speculation is that Foxwoods may be on the ropes after it's highly leveraged addition of the MGM Grand has pushed them to the brink.
In a strange twist, some sort of tribal rules, Foxwoods cannot be forced into Chapter 11 by it's debtors. Basically, if a normal company defaults on bonds.....the debtors can force them into chapter 11 and make them liquidate in order to meet their obligations. Can't do that to a tribe.
It sets up what could be a precedent in the capital funding of Indian owned casino's. If Foxwoods tells the bondholders to screw off and stiffs them.......they would essentially destroy the capital markets for tribal gaming. Would you buy a bond if you knew that basically the company could not pay you if they wanted to, stiff you...and you could do nothing legally to pursue your funds? The answer is no.
For any of you who think the financial crisis is over.....turn off the TV. We're only getting started. The real fun will come when a soverign nation defaults. Make sure you have plenty of bullets in the future my friends..
Speculation is that Foxwoods may be on the ropes after it's highly leveraged addition of the MGM Grand has pushed them to the brink.
In a strange twist, some sort of tribal rules, Foxwoods cannot be forced into Chapter 11 by it's debtors. Basically, if a normal company defaults on bonds.....the debtors can force them into chapter 11 and make them liquidate in order to meet their obligations. Can't do that to a tribe.
It sets up what could be a precedent in the capital funding of Indian owned casino's. If Foxwoods tells the bondholders to screw off and stiffs them.......they would essentially destroy the capital markets for tribal gaming. Would you buy a bond if you knew that basically the company could not pay you if they wanted to, stiff you...and you could do nothing legally to pursue your funds? The answer is no.
For any of you who think the financial crisis is over.....turn off the TV. We're only getting started. The real fun will come when a soverign nation defaults. Make sure you have plenty of bullets in the future my friends..