The Little Traverse Bay Band of Odawa Indians turned to a national law firm serving American Indian Tribes to manage the debt crisis engulfing its Odawa Casino Resort in northern Michigan, the casino recently announced.
The Petoskey-based resort, which opened in June 2007, replaced the original Victories Casino, according to the tribe’s Web site. Development in 2006 ran the tribe $122 million, financed by 10.25% Senior Notes due in 2014, Fredericks Peebles & Morgan LLP stated.
Performing below expectations, the casino struggled to service its debt, and in February 2009, payments were stopped, reported UpperMichigansSource.com. At that point, the tribe enlisted Fredericks Peebles & Morgan LLP to negotiate restructuring alternatives with note holders.
“We’re obligated to pay, so we’ve come to an understanding to restructure a fair amount,” said LTBB-Odawa Tribal Chairman Ken Harrington to UpperMichigansSource.com on Nov. 30, 2010, when the tribe completed its financial restructuring agreements with its bondholders.
Under the new deal, the tribe will exchange the $143 million and accrued interest owed to bond holders for a $23 million cash payment and pay a lower interest rate of nine percent on $40 million, due in 2020, according to Fredericks Peebles.
“We said, ‘Look, let’s go to the table, we both took a gamble here, literally speaking, and you need to take just as big of a bite of the apple as we have, and it worked out,’” said Tribal Council Treasurer John Bott in UpperMichigansSource.com.