Santa Ysabel Casino files for bankruptcy protection
The Santa Ysabel Casino near Lake Henshaw in the North County filed for bankruptcy Tuesday. — Charlie Neuman
Written by
J. Harry Jones
11:24 a.m., July 5, 2012
Santa Ysabel — The Santa Ysabel Resort and Casino, which owes the county more than $3 million and other creditors millions more, filed for bankruptcy protection Tuesday.
The casino off state Route 79 near Lake Henshaw “will continue to operate as usual while it seeks to restructure its debt under Chapter 11 of federal bankruptcy law,” Casino General Manager David Chelette said in a statement released late Tuesday night.
Chelette said the “strategic reorganization” will have no discernible effect on employees or customers, and all casino operations, promotions and payouts will continue unaffected.
Chelette said “the move will enable the casino to right-size its debt and ensure its long-term viability. This proactive step enables us to protect the jobs of our employees, which are vital not only to them and their families, but to the local economy as well.”
The casino has struggled since in opened five years ago because of its remote location in North County’s backcountry. Several other, larger Indian casinos are much closer and easier to reach from population centers.
The 35,000-square-foot casino features 350 slot machines and various table games. By contrast, most of the other North County Indian casinos are far larger and offer 2,000 machines each.
The bankruptcy filings list the casinos 20 largest creditors, with the county being the largest at just more than $3 million.
In 2005, the Iipay Nation of Santa Ysabel entered into an agreement with the county as part of its compact to operate a casino. The agreement was for the tribe to contribute funds annually for off-site improvements and services, such as an additional deputy sheriff, any criminal prosecutions that could arise from its operation, contributions to a problem gambling fund, and emergency response to traffic accidents.
But the tribe never paid.
Under the terms of the agreement, if a dispute were to arise it would go to binding arbitration. That happened late last year, and a few months ago the tribe was ordered to pay the county the money. The process of freezing the tribe’s bank accounts began in April, but a judge stopped it when the tribe argued that some of the accounts have nothing to do with casino operations. A hearing to determine what accounts could be seized was scheduled for later this month.
The tribe argues that the agreement with the county was made based on projected income from a larger casino and resort that was never built, and is therefore unfair.
Among 19 other unsecured claims listed in the filing is more than $500,000 owed to Native American Meagajackpots of Los Angeles; almost $250,000 to International Gaming Technology; and $100,000 to the state’s gambling control commission.
According to other court filings, the tribe also owes millions of dollars more to the Apache tribe, which fronted the money for the construction of the casino in the first place, but the tribe is not mentioned in the bankruptcy filing.
Senior Deputy County Counsel Tom Bunton, who has been representing the county in court, is on vacation and was unavailable for comment Thursday.
Posts
No comments:
Post a Comment