Wednesday, January 07, 2009

Reporter: Kerzner & Wolman have money troubles, Strather seeks new investors for Cape Cod Casino scheme

Taken from a story by Stephanie Vosk published on 1.05.09 in the Cape Cod Times:

    Tribe's longtime investor seeks new blood

    ...For years, Herb Strather and his investors bankrolled the tribe's quest for federal recognition from the U.S. Bureau of Indian Affairs, upping the ante to $40,000 a month, and later $100,000, according to court documents.

    But the process, officially ongoing since the 1970s, still took a lot longer than anticipated. In December 2006, about 10 months after the tribe received a preliminary thumbs up on its federal recognition application, the man from Detroit officially handed over the vast majority of his stake in a proposed casino to a company called Trading Cove, headed up by South African casino developers Sol Kerzner and Len Wolman.

    Five years ago, Strather said, he may have been able to maintain about 20 percent of the project. Today, he controls a little more than 5 percent.

    The financial problems of Kerzner and Wolman, who are the "operators and the funders" of the project, have been well publicized. The credit rating for their Rhode Island "racino," Twin River, has been downgraded by at least two companies, and Moody's Investor Service cited a high probability the company will seek bankruptcy protection.

    Strather's not in trouble as far as the Mashpee project is concerned — he doesn't have those kind of debt obligations for the casino, he said.

    It's his other various projects that are suffering from the current economic recession. "We have other businesses, real estate businesses, and yes that business is tough," he said.

    But many of his original investors — including O.J. Simpson's attorney Johnnie Cochran and his kindergarten teacher — have died since his business with the tribe began, and new blood — and money — are welcome, he said.

    "Many of these people who came in are gone. I've had at least a dozen investors die," he said. "They helped make a dream come true, and their legacy will live on, although they are not alive now to reap the benefits of it."

    Strather is likely looking for investors who can not only help financially, but have political influence at the local level, experts say... (See Original Story)

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