Projo Politics Blog

PROVIDENCE - Weighing in on the "uncertain future facing Twin River,'' Rhode Island Attorney General Patrick C. Lynch said state officials should view a bankruptcy filing as "a last resort,'' and think twice before embarking on any takeover arrangement that involves competitive bidding.

Acknowledging he has not been privy to any of the discussions between the Carcieri administration and the owners of the financially struggling greyhound track and slot parlor, Lynch said: "Before encouraging, implicitly or explicitly, Twin River to declare bankruptcy, the State needs to make sure that every implication of such a course of action is fully considered.

"Bankruptcy should be viewed as a last resort. The many unsecured creditors who may go unpaid as the result of a bankruptcy by Twin River include contractors and subcontractors as well as other vendors who have provided goods with the full expectation that payment would be forthcoming, and who operate their businesses on a tight margin made even tighter by the economic recession. For these small businesses, as well as for the 500 people who work at Twin River, the consequences of a bankruptcy could be devastating.''

Neither Lynch nor his spokesman could be reached for immediate comment or explanation of his unsolicited statement.

But he appeared to be responding to the announcement by Twin River's owners earlier this week that the Carcieri administration had broken off talks.

On Monday, Twin River spokeswoman Patti Doyle said: "We have been informed that the governor's office has broken off all discussions with the owners of Twin River -- BLB Investors, LLC. -- regarding the possible state takeover or purchase of the gaming venue. In light of this new development, BLB will review its remaining options. "

Subsequently, Gary Sasse, who doubles as the director of the state's Department of Revenue and Department of Administration, acknowledged that there had been talks at one point about hiring a management company to run the Lincoln gambling hall, in the event of a state takeover.

In an interview on Tuesday, he would not disclose the potential terms under discussion, but he said the administration was aware that if it decided to hire a management company to run Twin River, it would have to decide at some point "whether it would be appropriate to do it sole source or through competitive bidding. I am just saying that is an obvious question we had to ask ourselves...[but] I am not prepared to say what the result was of that conversation because the situation could still be fluid.''

That may have been the hook for Lynch's comments on the potential downside of competitive bidding in this case. But he may also have been responding to comments by state Treasurer Frank Caprio who, like him, has been considering a run for governor in 2010.

Caprio said Twin River's owners should continue their efforts to restructure the terms of their debt, but if "Twin River enters bankruptcy, the state would be in a strong position to protect the video slot revenue and jobs by bidding for the real estate through the bankruptcy court competitive bidding process."

Said Lynch: "If the decision is made that having Twin River as a state-owned facility is preferable, I would caution all that entering into a bidding process for the property may be among the least predictable ways of accomplishing that result, and certainly not at the lowest cost to the state," he said.

Lynch iand Caprio could potentially face each other in acrowded 2010 Democratic primary.

 Tags  bankruptcy economy Lincoln RI Patrick Lynch Rhode Island Twin River

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