May 2015 Conference Call - impressions

The first time I heard them relatively optimistic sounding. Of course in the sense that they will survive, not that they will ever pay us back.

Financially the casino is still in red but the rapid deterioration of the previous years seems to have been stopped.

One year from now they will be finished paying the tribe's lease for some property the tribe acquired several years ago. The lease payment was $232 thousand per month approximately 1/4 of what they should be paying the bondholders in interest.

With that payment behind them and with the likely reduced future payments to the county (MOA currently being renegotiated) and stable casino "performance" they should be above the water .

With one thing still weighting them down though, their old debt.

For as long as the debt situation is not resolved their finances will be under control of the trustee (UMB Bank) and their lawyers. They, the trustee will collect everything the casino will ever bring and only pay them back the minimum required to operate (plus the required tribe payments) with all the surplus going in principle to the bondholders.

In principle only because that surplus will be first used to pay the trustee and their lawyers. And they do not come cheap. So far they collected $1.6 million, the money that could be instead paid to the bondholders if the old bonds were restructured. And will continue paying themselves close to a million a year for as long as the issue is not resolved.

Thus the restructuring is critical, the sooner the better.  But easy it will not be, the trustee obviously has no interest in resolving the situation and the bondholders will have hard time accepting any haircut not recognizing that not accepting such a haircut will cost them almost a million a year.

Welcome

Intended as a place to exchange ideas, comments, infos, etc for owners of recently defaulted River Rock Casino (Alexander Valley, CA) bonds.

One of the largest recent Indian Country casino defaults in this country. The situation remains legally unresolved, the casino is however still operating and presumably will restructure in the future.

The blog is managed by a private investor. For official sources of information:

1. see FINRA site, current prices and trades, historical prices, charts, ratings, etc. The link is to their taxable bond. The casino also has a similar, issue-size, "municipal" (CA) issue listed here. 


2. contact MSato@mintz.com a lawyer with a law firm hired by the current trustee to handle the default to request to be placed on her mailing list. Her law firm is relatively communicative (they sometimes do their own investor call conferences) much more so than one 


3. Laura.Roberson@umb.com of UMB Bank, the current official Trustee. Her bank is your nominal trustee, that is the bank that is supposed to represent your i.e. investor interest in this defaulted bond, and


4. last but not least the casino itself that issued these bonds and is legally "required" to repay them one of these day. Specifically their investor relations department. This is where they publish their quarterly reports and announce their investor calls conferences with access code and such. Registration required.

Please feel free to post your own observations, comments ideas, etc. The issue, the Indian casino defaulting on $150 million of debt is relatively obscure and in essentially uncharted legal territory so I don't expect much traffic here if any. 

Anyway, the issue will most likely fester for years, so happy riding along.