Foxwoods $2 BILLION restructure incomplete

When Casino Capitalism ruled the world, little thought was given about the inability to when the checks were written to Tribal Casinos. They can't file for bankruptcy and banks can't seize assets or revenues or mandate cost saving measures.

Hmmm....

Tribes have defaulted.

Foxwoods is one.


Thomas candidacy not a good sign for debt talks, analysts say
Former chairman seeking council seat in Nov. 6 election

By JAMES MOSHER
The Bulletin


Mashantucket, Conn. — The return of Michael Thomas to Mashantucket Pequot Tribal Nation politics is bad timing considering that the tribe is trying to complete a $2 billion debt restructuring, analysts said Tuesday.

Thomas, the tribe’s former chairman, is one of 13 candidates running for two tribal council seats. He was ousted from the chairmanship and resigned from the council in 2009 after he pledged not to cut payments to tribal members, something which displeased debt holders. The tribe owns Foxwoods Resort Casino, North America’s largest gambling hall.

“This is certainly not a good time to do that,” said Roger Gros, publisher of Global Gaming Business magazine. “They are about ready to wrap up (the debt negotiations). This is not the time for him (Thomas) to re-emerge.”

Clyde Barrow, director of the University of Massachusetts Dartmouth Center for Policy Analysis, which tracks the New England gambling industry, took a similar view.

“Yes, I suspect some will be nervous,” Barrow said of the debt holders.

Both analysts point out Thomas does not appear to be seeking a return to the chairmanship of the seven-member council. They also noted Thomas was deposed by a unanimous vote of the other council members two years ago.

“As long as he’s not chairman things shouldn’t become too difficult,” Gros said.

“He (would be) one voice among many,” Barrow said. “He’s going to speak for certain constituencies.”

The election is slated for Nov. 6. In August, the tribe and Foxwoods confirmed made major advances in the debt discussions, which include possibly reducing its overall load by $500 million. Hud Englehart, a spokesman for Foxwoods President and CEO Scott Butera, said Tuesday the casino remains on track for reaching an agreement by year end.

Englehart declined to comment on Thomas’ candidacy.

Extensions of $650 million in loans by major banks including Bank of America Corp. and Well Fargo & Co. are part of the talks, the Wall Street Journal reported.

Turbulence in the negotiations could put further pressure on Bank of America’s stock. The shares dropped 9.6 percent on Monday amid ongoing concerns about the European debt crisis. Jared Dillian, a Norwich native and former Lehman Brothers trader who publishes The Daily Dirtnap newsletter, said during a Sept. 25 book event in Mystic that Bank of America is the “most likely” large commercial bank failure because of mortgage and lawsuit exposure at its Countrywide subsidiary.

Thomas’ brother, Steven, is on the tribal council and chairs its community planning and housing committees. Kenny Reels, who preceded Michael Thomas as chairman, is also seeking a council seat in next month’s election. The council seats up for election are those held by Richard Sebastian, who also serves as vice chairman, and James Jackson, who is also the tribe’s treasurer. Chairman Rodney Butler’s term runs through 2012.

Tribal spokesman Bill Satti declined to release a complete list of the candidates, citing a tribal policy.