WSJ: Bankruptcy of Western Mohegan Tribe Brings Legal Issues Into Question


The Western Mohegan Tribe & Nation of New York filed for Chapter 11 bankruptcy protection on March 15 at a U.S. Bankruptcy Court in Chicago, reported The Wall Street Journal.

The tribe's Tamarack Lodge resort, a reportedly dilapidated 255-acre property in the Catskills, will be auctioned off at a sheriff's public sale on Thursday.

Among the tribe's debt listed in its bankruptcy filing was a $3.5 million loan from Detroit developer Ted Gatzaros.

The Western Mohegan Nation made headlines in 2004 when its leader, Ronald A. Roberts, also known as Sachem Golden Eagle, admitted to submitting fake documents, such as an altered death certificate for his grandfather, to the Interior Department’s Bureau of Indian Affairs 15 years ago, in a plea for federal recognition. Roberts was sentence to six months of home detention and five years’ probation starting in June 2004, according to news reports.

While the Western Mohegan Tribe is an unusual case, their bankruptcy filing raises the question of whether Indian tribes and their businesses are even eligible for bankruptcy protection, reported the WSJ. For one, the Indian Gaming Regulatory Act (IGRA) shields tribes against creditors, and courts are prohibited from imposing new management on tribal enterprises. The IGRA also prevents courts from taking possession of tribal assets, like a casino.