Mashantuckets Hold Off Default For Now
Tribe makes loan interest payment on schedule
By Brian Hallenbeck Published on 9/2/2009
The Mashantucket Pequot Tribe made a loan interest payment that was due Tuesday, enabling it to temporarily stave off default.
The tribe paid a bond “coupon” as scheduled, according to Jane Pedreira of Clear Sights Research, a financial analyst with knowledge of the transaction. Clear Sights advises mutual and hedge funds that invest in the gaming and leisure industries.
The amount of the payment was not readily available.
”We remain in compliance with our covenants and are current with regard to our debt obligations,” a tribal spokesman said in a statement. “As we continue through this process, the Tribe will be pursuing a mutually beneficial resolution with its banks and bondholders.”
The tribe, which owns Foxwoods Resort Casino and MGM Grand at Foxwoods, is seeking to restructure its debt in the face of declining revenues.
Tribal officials did not respond to calls and e-mails seeking information Tuesday in the wake of the previous day's ouster of Chairman Michael Thomas.
Six members of the seven-member council relieved Thomas, the seventh member, of his duties and called for him to resign. The councilors charged that Thomas had “betrayed our trust” by communicating directly with tribal members in describing his plan for dealing with the tribe's financial crisis.
Councilors informed Thomas that they were “appalled” by his Aug. 19 letter to tribal members in which he pledged to avoid cutting tribal government and to continue payments to members before paying creditors.
The council placed Thomas on administrative leave “pending the outcome of an internal review.” If Thomas fails to step down by Sept. 10, the council could remove him by a three-fifths vote.
Thomas, in turn, indicated he would circulate petitions for a referendum on his fate and to have a special election to recall the other six councilors.
Meanwhile, the tribe could face default in the next several weeks if it cannot come to new terms with its lenders, sources have said.
EDITORIAL FOOTNOTE; Evidently, it looks like, the Mashantucket Pequots are doing the same things that the Mohegans seem to be doing, that is they are paying only interest on their loans. How come? Is it poor management? Is this going to happen to the Mohegans?
Is this situation already happening to the Mohegan Tribal Government and our (the Mohegan Tribe) government isn't telling us. What is the true condition of the Mohegan Tribal Government and the Mohegan Sun Casino's finances?
Are Mohegan Tribal members thinking like the Mashantucket Pequots, that our leadership has "Betrayed Our Trust?" What do you think?