He went on to explain that if one tribe filed, only to have its petition denied, the threat of bankruptcy would be unavailable to other tribes in the future. Furthermore, if a tribe filed successfully, the bankruptcy process could call tribes' legal protections into question, potentially stripping them of rights that protect their sovereignty.
Protecting these rights makes a compelling case for finding an out-of-court solution, but also makes it more difficult to reach an agreement.
Businesses owned by Native American tribes have special legal protections that restrict creditors' avenues of recourse. Tribes are legally prohibited from selling tribal assets or issuing equity, and they are legally immune from attempts by outsiders to force a change of control at their businesses.
Without a court to push things along, the discussions at Foxwoods stretched on for four years -- one adviser who worked on the deal compared the process to a "game of Whac-A-Mole" in which, each time one tranche of creditors was satisfied with a provision, another tranche would rise up to dispute it.Global Leveraged's Reynertson was thrilled that the parties reached a consensual resolution with more than 99% bondholder participation.