This would have significant implications for investors, creditors, the native gaming industry and the Mashantucket Tribe itself. The practical consequence of dealing with the bankruptcy of a sovereign nation is that creditors (specifically, unsecured bondholders) may see their claims subordinated to the ownership claims of Foxwoods’ equity holders (i.e., tribal members). ![]() These concerns are hardly limited to the academic environment. This triggers questions of paramountcy namely, whether tribunal sovereignty can trump federal bankruptcy law. The rub here is that Foxwoods is owned and operated by the Mashantucket Western Pequot Tribal Nation, a sovereign nation under U.S. Under these proceedings, creditors step in and collect monies owed to them before any residual equity is dispersed amongst owners. Ordinarily, bankruptcy proceedings are triggered when a typical commercial enterprise defaults on its debt. The recent economic downturn has caused Foxwoods Resort Casino, one of the largest casinos in the world, to seek a restructuring of nearly $1.5 billion in debt.
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