Mashantuckets, Mohegans and debts!

It seems that the horrific practices of predatory businesses and unregulated/under-regulated capitalism (commonly known as greed) that have whacked us with a brutal recession have been SOP for these folks according to the Norwich Bulletin.

Millions, billions owed

The Mashantuckets reportedly have debt obligations of more than $2 billion. The Mohegans have to repay $150 million in $30 million increments, beginning next year, the result of an agreement with the bank to retire a $330 million note.

Neither tribe can seek any of the options available to previous owners of Resorts. They cannot look for a buyer to take the load off their shoulders. Or sell off a gaming hall to reduce debt. The Indian Gaming Regulatory Act says only a tribe can own a casino, said Shawn P. Pensoneau, a spokesman for the National Indian Gaming Commission. If property is on the reservation, the land is owned and held in trust by the federal government.

So, truly this is not good financial news for the tribes, the state of CT, employees and the regions impacted. Why did it happen? Why were these casinos allowed to create and propagate phony prosperity?

Mohegan Sun faces similar approaches.

“We’ll have difficulty making those payments on the $150 million, so we are considering debt restructuring,” said Leo Chupaska, Mohegan Sun’s chief financial officer. “We are studying what we can do to take care of the issue.”

Is this why they recently retracted their statements about building a$1 Billion dollar casino in Palmer should Massachusetts be so short-sited and legalized slots? Can they build anything with this noose around their necks in a recession that has sucked the juice out of borrowing?

Like foreign nation

Barrow likens it to trying to collect on a debt from a foreign government.

“You can cut them off,” he said. “But if they do not have money, you can’t get blood from a stone.”

They may declare bankruptcy.

“But don’t expect an Obama bailout,” he said.

If banks are so inclined, they can write off the debt as they do for mortgages, restructure to lower interest rates, or lengthen the time to pay to back, Barrow said. Those steps are in the bank’s self-interest, since they cannot take over a casino.

Meantime, it’s business as usual, Chupaska said.

“We do not anticipate that the financial restructuring being considered by the tribe will affect our employees, customers, vendors or business partners,” he said. “The tribe does not plan to make any additional comments regarding this matter at this time.

NO COMMENT, of course.