Crisis Specialists Help Mashantuckets
Tribe enlists aid from professionals to cope with fiscal emergency
By Brian Hallenbeck Published on 8/31/2009
Mashantucket - When their massive debt-restructuring was reported last week, the Mashantucket Pequot Tribe sought to allay alarm among its casino employees, distributing a letter prepared by a New York firm that specializes in “crisis communications.”
”First, we want to be clear that we do not anticipate that the Tribe's financial restructuring will affect our employees, customers, vendors or business partners,” reads the letter, a copy of which The Day obtained.
The council will address the tribal membership at a meeting this afternoon.
Addressed to “Dear Valued Team Members,” the letter to employees was prepared by the New York firm Joele Frank, Wilkinson Brimmer Katcher, according to a source who asked not to be named. It was signed “Mashantucket Pequot Tribal Council.”
The tribe, which owns Foxwoods Resort Casino and MGM Grand at Foxwoods, confirmed that it hired Joele Frank in addition to Miller Buckfire, an independent investment bank, and the law firm Weil, Gotshal & Manges to help it deal with its fiscal crisis.
”We have engaged financial, legal and communications counsel to ensure we have the benefit of the best and most seasoned thinking as we pursue a mutually beneficial resolution with our banks and bondholders,” a tribal spokesman said in a statement issued in response to a question from The Day. “This is a fluid process and Joele Frank, Wilkinson Brimmer Katcher, an experienced financial communications firm, is assisting the Tribe in communicating with its many constituencies.”
According to its Web site, Joele Frank's “Crisis Communications practice assists clients when unforeseen or unplanned events threaten to disrupt their businesses or organizations.”
The firm's work in crisis communications has included “class-action litigation, earnings surprises, shareholder lawsuits, regulatory actions, downsizings, restructurings, bankruptcies, union campaigns, employee strikes, other labor actions and consumer boycotts,” the Web site says.
Today's meeting of the tribal membership is expected to include discussion of debt-restructuring options and the tribe's possible default on the terms of a $700 million credit line.
In an Aug. 19 communication with members, Michael Thomas, chairman of the tribal council, said he has introduced a resolution “to take our last borrowed dollars and put them in a lock box only to be used for Government and Incentive,” a reference to tribal government and monthly payments to tribal members.
The Day reported last week that the tribe withdrew the $91.9 million balance on its credit line to help fund tribal operations during debt-restructuring, as advised by Miller Buckfire.
Word of the restructuring prompted both Standard & Poor's and Moody's to downgrade the Mashantuckets' credit ratings.
EDITORIAL FOOTNOTE: should the Mohegan Tribal Councilors take a page out of the Mashantucket Pequot's book, and hire sepcialist do deal with the economic situation of the Mohegan Tribe? Are the Mohegans in a bad economic situation, like the Mashantucket Pequots? Is it only a matter of time before the shoe drops? What do you think?