Bank appeals decision over Lac du Flambeau gaming debt

Monday, May 3, 2010  

Wells Fargo Bank has filed a notice of appeal in the gaming debt case involving the Lac du Flambeau Band of Lake Superior Chippewa Indians of Wisconsin.

The bank issued a $50 million bond to the tribe. The tribe used the money to finance one of its casinos and for an out-of-state gaming project.

The tribe still owes $46.6 million on the bond but is unable to pay. Revenues at the Lake of the Torches Resort Casino have dropped and the out-of-state project failed.

The bank sued to recover the money on behalf of the bondholders. But Judge Rudolph T. Randa rejected the arrangement, saying it rose to the level of a gaming management agreement, as that term is defined by the Indian Gaming Regulatory Act.

But since the deal wasn't approved by the National Indian Gaming Commission, it can't be enforced, Randa ruled in January. He affirmed his decision last month in response to the bank's request to vacate it.

The case would be heard by the 7th Circuit Court of Appeals.

Get the Story:
Tribal debt case weighs on lending (The Milwaukee Journal Sentinel 5/3)