It will be interesting to see whether the tribe allows that to be lockboxed. In absence of their agreement with the state, this wouldn’t be a strong enough source of collateral, if the court deciding the disposition of disputes were Tribal.
Their agreement with the state, and their potential to become a party to that agreement, potentially, means whatever dispute resolution clause they’ve agreed to with the state would go for the banks. Doubt seriously that the state agreed to resolve their dispute in Tribal court. Venue is probably federal.
In absence of that agreement, lockboxing the revenue still means that the tribe could just stop sending checks for whatever compelling reason the Tribe could come up with. If your venue is Tribal court, there isn’t much you as a bank could do about that. Whether the revenue in collateral here comes from an existing plant or from a casino, or a lemonade stand for that matter, is immaterial. Dispute resolution has to be such that the banks could actually expect not just a resolution of the dispute, but also enforcement.
That’s the other thing. Getting your judgment in Tribal court is hard enough. Getting it enforced is quite another.
They may be able to finance this on their own. I’ve provided a link to the largest tribally owned bank in the US. To me, you’d think the Tribes would have considered, “Hey, we should be financing our own projects and carrying our own paper. We’d then have more money to stake bigger projects.”
Here’s the link:
http://www.potawatomi.org/enterprises/banking
At this late date, you should be reading about the Tribes just putting up the refinery, telling the EPA that their Air Permits are for the pale face, and just start cranking out Ethanol-free gasoline at a cut rate to compete with US-based producers.
I haven’t seen any of those articles. I should be reading them, but they can’t get out of their own way. Tribes are best thought of like Saudi Arabia - a few families who own everything in that country. However, eventually the Saudi’s figured out how to be at least a global member of the free enterprise system and a reliable supplier of oil to the world. They screwed up early on with their embargo, but proved they could learn from that.
It will be interesting to see if the Nations learn how to do it the ‘Saudi’ way - retain your autocracy but become reliable. They could do as much as anyone to spur economic development in the US, ESPECIALLY for their own selfish reasons.
They need their own banking system, and their own capital facilities - ones that would be able to write performance bonds that would not require land as collateral. They could do it. We’ll see if they do.
I understood that revenue stream was coming from the state. I was guessing (and only guessing) that it could be attached prior to the tribe receiving it. I agree depending upon a Tribal court is the same as losing.
Also this is a "small" and simple type of refinery. The type mostly built on skidded equipment. Much of the dollar value could be disconnected and removed. It would not be worth the total installed cost of the refinery, but it could reasonably be collateral for half.