Shooting Craps: How Denying Tribal Casinos Bankruptcy Relief Ensures that Everyone Loses and a New Rule to Provide Potential Chapter 11 Relief
20 Pages Posted: 26 Mar 2013
Date Written: December 20, 2012
In August 2012, the Bankruptcy Court for the Southern District of California dismissed a Chapter 11 petition filed by the Santa Ysabel Resort and Casino finding that the casino was an ineligible debtor under the Bankruptcy Code. This Essay critiques the decision of the Bankruptcy Court and suggests that tribal casinos should not be summarily excluded from filing for bankruptcy. This is because the federal Indian Gaming and Regulatory Act dictates the corporate form of Indian casinos but potentially excludes them as eligible debtors.
Instead, this Essay proposes a new rule that courts should use when evaluating Tribal Casinos as semi-sovereign entities in Chapter 11 proceedings. Ultimately, this rule would allow certain tribal casinos to avail themselves of bankruptcy protection while still complying with federal law.
Keywords: Santa Ysabel Resort and Casino, tribal bankruptcy, Chapter 11, sovereign immunity
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