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Foxwoods Owner Wants to Restructure Its Debt
The tribe that owns the Foxwoods Resort Casino in Connecticut said Wednesday that it was seeking to restructure its debt as revenue slumped. But legal hurdles connected to its tribal ownership may complicate those reorganization efforts.
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Suzanne DeChillo/The New York TimesFoxwoods Resort Casino says that it is current on its debt obligations, including a $700 million credit line due next July.
The Mashantucket Pequot Tribal Nation said that it had hired the investment bank Miller Buckfire and the law firm Weil, Gotshal & Manges to negotiate with its bank group.
It says that it is current on its debt obligations, including a $700 million credit line that comes due next July, though Foxwoods has an interest payment due Sept. 1.
“We have sufficient resources to continue to operate our businesses as normal, and it will be business as usual,” a spokesman for the tribe said in a statement.
The gambling industry has been severely hurt by the recession and less spending by consumers. Some casinos, like Stations Casinos and Fontainebleau Las Vegas, have already filed for bankruptcy protection. Others, like Harrah’s Entertainment and MGM Mirage, have managed to gain some breathing room by negotiating with creditors.
Foxwoods, based in Ledyard, Conn., is one of the biggest casino resorts in the country, and once had little competition throughout the Northeast. Now, however, it must contend with competition from the Mohegan Sun casino and slot operations in nearby states. The Mashantucket Pequot tribe uses its revenue to finance its government operations.
Native American gambling resorts, however, bear extra limitations on restructuring that other casinos do not. For example, creditors cannot seize the assets of a resort like Foxwoods or take an equity stake because of restrictions in the Indian Gaming Authority Act, according to a June report written by Moody’s Investors Service analysts. Because no Native American-run casino has filed for bankruptcy, these conditions have not been tested by federal courts before.
Both Moody’s and Standard & Poor’s downgraded Foxwoods’ debt ratings on Wednesday
News of the tribe’s efforts to restructure the casino’s debt were first reported by The Day of New London, Conn.
On Wednesday, Gov. M. Jodi Rell held a news conference to address concerns that a default by the casino would hurt state revenue. Last fall, Foxwoods announced 700 layoffs.
Sign in to Recommend Next Article in Business (15 of 32) » A version of this article appeared in print on August 27, 2009, on page B3 of the New York edition.
3,900 stimulus checks went to prison inmates
The federal government sent about 3,900 economic stimulus payments of $250 each this spring to people who were in no position to use the money to help stimulate the economy: prison inmates.
The checks were part of the massive economic recovery package approved by Congress and President Barack Obama in February. About 52 million Social Security recipients, railroad retirees and those receiving Supplemental Security Income were eligible for the one-time checks.
Prison inmates are generally ineligible for federal benefits. However, 2,200 of the inmates who received checks got to keep them because, under the law, they were eligible, said Mark Lassiter, a spokesman for the Social Security Administration. They were eligible because they weren't incarcerated in any one of the three months before the recovery package was enacted.
"The law specified that any beneficiary eligible for a Social Security benefit during one of those months was eligible for the recovery payment," Lassiter said.
The other 1,700 checks? That was a mistake.
Apple Highest Grossing Retailer on Fifth Avenue as Crowds Swell
As vacancies increase and retail sales throughout the U.S. remain a shadow of the decade’s boom, Apple Inc.’s stores are defying the recession.
At Fifth Avenue and Fifty-Ninth Street, the noon-day line on Aug. 11 snaked out the front door. More than a dozen people waited to buy an iPhone, which runs from $99 to $299, plus at least another $70 a month for a service plan. Every computer, seat and station was occupied by a visitor to midtown Manhattan.
Apple, based in Cupertino, California, increased revenue at its stores by 2.5 percent in the first six months of the year to $3 billion as the rest of the retail industry suffered. During the same period, sales at all U.S. retailers fell 9.2 percent compared with the first half of 2008, according to the U.S. Commerce Department.
Retail sales in New York City have fallen 8 percent to 10 percent from comparable 2008 levels, according to the Federal Reserve’s Beige Book business survey published July 29.
“Even if they are not spending money elsewhere, people are still spending money on technology gadgets,” said Patricia Edwards, a retail analyst and founder of Storehouse Partners LLC in Bellevue, Washington. “It’s both a need and a want. It fulfills that retail-therapy component.”
Apple’s store performance in the last year has been driven by the iPhone, according to Charlie Wolf, an analyst who covers Apple at Needham & Co. in New York. The retail operation saw a 22 percent increase in traffic during the quarter ended June 27, hosting a total of 38.6 million visitors, Chief Financial Officer Peter Oppenheimer said on a conference call in July.
Apple’s shares have almost doubled this year. The stock climbed $2.89, or 1.7 percent, to $169.22 on Aug. 21 in Nasdaq Stock Market trading.
A Mercedes Per Square Foot
Apple’s Fifth Avenue emporium probably has annual sales of more than $350 million, topping any of the chain’s other outlets, said Jeffrey Roseman, executive vice president of real- estate broker Newmark Knight Frank Retail in New York. The location is 10,000 square feet, putting its sales per square foot at a minimum of $35,000, based on Roseman’s estimate.
