A legal fight between the Picayune Rancheria of Chukchansi Indians and Wells Fargo Bank has erupted in New York state court. Wells Fargo is suing California’s Picayune Rancheria of Chukchansi Indians over a $250 million loan that the bank says the casino-owning tribe is avoiding paying back.
The Fresno Bee reported that the 2012 loan was issued to refinance debt from the Chuckchansi Gold Casino and Resort. It came with several requirements that the suit filed in New York last week alleges are not being met.
Once the casino reopened in 2015, Chukchansi Economic Development Authority (CEDA) was required to place the cash from the casino into a deposit account agreed to under the loan conditions.
The tribe was permitted to withdraw cash to fund the casino’s operations, make payments on other reopening loans and make certain tribal member distributions. Any cash left over was expected to go toward semi-annual payments to Wells Fargo, according to the lawsuit.
But the bank now claims the tribe has sidestepped the agreements to “unlawfully” cut off loan repayment.
The bank accuses the tribe and CEDA of stockpiling cash meant for loan payments, which the bank says violates the “cash control” agreements set among the parties.
Wells Fargo is seeking relief from New York State Supreme Court to avoid future “irreparable harm” from loan violations. It also stated it never intended to take the matter to court.
“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,” reads a portion of the lawsuit.
In the complaint, Wells Fargo points to the tribe’s history of failure to commit to loan agreement terms. In 2014 federal authorities shut down the casino following an armed takeover. The National Indian Gaming Commission issued a notice ordering the tribe to cease and desist from all gaming activity. By the time the casino reopened in 2015, the tribe had already missed loan payments. Wells Fargo attorneys also claim the casino’s reopening would not have been possible without the help of the bank’s loan to the casino.
Whether it’s casinos and banks, landlords and tenants or businesses and other businesses, we don’t see things the same way and often end up in court to figure things out. And when those legal disputes negatively affect YOUR business including landlord/tenant matters, contract issues, nuisance ADA claims and even collections, call in the good guy business litigator, Dean Sperling, to resolve YOUR matter with YOUR best interests in mind!
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Wells Fargo sues California tribe in