Chukchansi fails to pay interest due on 9¾% notes within grace period

By Angela McDaniels

Tacoma, Wash., May 22 - The Chukchansi Economic Development Authority received notice of an event of default on its 9¾% senior notes due 2020.

The authority did not make the full interest payment due on the notes within the grace period, which expired on May 1. The payment was due April 1, and the trustee under the indenture gave notice of the event of default on April 11.

In a Wednesday news release, the Chukchansi Tribal Council published a letter from tribal council chairwoman Nancy Ayala to the tribe's membership about the actions of three council members referred to as the Lewis-Alberta group.

"Because of the actions of the Lewis-Alberta group, relationships with casino vendors have been badly damaged, bills have gone unpaid or been paid late and the bond indenture used to finance the casino stands in peril of default," Ayala said in the letter.

In its April 11 notice, counsel for the trustee said, "I have been asked to emphasize that the holders took that action given the current inability to reach a consensual arrangement for the stabilization of casino operations and an agreed procedure between your two 'factions' for the payment of even the most basic of casino related expenses.

"We also note the absence of any agreement on even a process for discussing or hearing the ultimate resolution of the disputes between what we have referred to as the 'two factions seeking control of governance of the casino and related matters.' We remain committed to advancing a process in which there can be an amicable resolution, but continue to reserve any and all rights and remedies."

The Chukchansi Economic Development Authority is a Coarsegold, Calif.-based operator of the Chukchansi Gold Resort & Casino.

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