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Casino Default Plumb Depths of Bankruptcy Law

LEDYARD, CT-According to the Financial Times, the Native American tribe which owns the Foxwoods Casino finds itself in default, but also a sovereign nation.

By Financial Times | Updated on November 19, 2009

LEDYARD, CT-The Mashantucket Pequot Tribal Nation, the owners and operators of the Foxwoods Resort Casino, are saying they may not make a full interest payment on $500 million worth of notes, says the Financial Times . This lack of payment results as a default by the December 16 grace period deadline.

The tribe is recognized by the US government as a sovereign nation, which raises some consternation among the casino’s creditors. The issue at hand is whether or not a separate nation can file under Chapter 11 protection under the US Bankruptcy Code. Moreover, the creditors may not be able to pursue the tribes under US law, since they technically do not reside under it.

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