American banking and insurance giant, Wells Fargo and Company, has reportedly filed a lawsuit against California’s Picayune Rancheria of Chukchansi Indians amid allegations that the casino-operating tribe is attempting to default on a $250 million loan.
According to a Saturday report from The Fresno Bee newspaper citing an earlier story published by the legal news domain at Law360.com, the San Francisco-headquartered firm issued the advance in 2012 in order to allow the tribe to refinance debts as it renovated its Chukchansi Gold Resort and Casino.
In the suit lodged with the New York State Supreme Court, Wells Fargo contends that the agreement attached to this loan contains several ‘cash control’ provisions including a requirement that the federally-recognized tribe place any profits from the refreshed California casino into a special deposit account. It declared that the Picayune Rancheria of Chukchansi Indians is subsequently required to use these funds to repay the advance after first satisfying other operational, financial and tribal member distribution obligations.
However, the bank’s action reportedly alleges that the Picayune Rancheria of Chukchansi Indians is attempting to sidestep this deal by ‘unlawfully’ cutting off its semi-annual repayments and illicitly stockpiling the cash for its own uses. Wells’ complaint moreover lists the tribe’s Chukchansi Economic Development Authority (CEDA) and Chukchansi Finance Company LLC enterprises as defendants and claims that it never wanted to take this matter to court but that the situation is causing it ‘irreparable harm.’
The complaint reads…
“Every dollar CEDA diverts from the deposit accounts is a dollar of collateral lost to the trustee and holders forever and a dollar that will never be available to make payments on secured notes.”
The plaintiff also reportedly used the lawsuit to point to other instances when the Picayune Rancheria of Chukchansi Indians had violated the terms of this loan agreement. The bank claimed that the tribe first began breaching this deal as far back as February of 2013, when judicial intervention had been required to force payments.
The Fresno Bee reported that the National Indian Gaming Commission ordered the Chukchansi Gold Resort and Casino to be closed in 2014 following an armed takeover. Once it was allowed to re-open the following year, Wells Fargo has alleged that the tribe had already missed multiple loan payments with its lawsuit seeking monetary damages as well as a declaration that the defendants have been violating the terms of the loan.