Superdome Commission is trying to work its way out of a bond deal gone bad

While the Saints have filled the Superdome to the rafters with football fans this season, the state government has had to fill the financial gaps that could have sunk the agency that oversees the stadium and other facilities.

Aside from the needs of its operational budget, the Superdome Commission is trying to work its way out of a bond deal gone bad, a nagging topic that came up again at a State Bond Commission hearing Thursday.

When the government securities market went sour last year, the state came to the rescue and acquired nearly all the Dome Commission's bonds, partly because of the high-profile nature of the nationally recognized asset, but it set in motion a chain of potential problems.

"If it were not the Superdome, we would not have gotten near these things," said state Treasurer John Kennedy, who chairs the bond commission. The situation is "just a bad dream (that) just keeps on giving," he said.

The Superdome, the New Orleans Arena and several other facilities are state properties overseen by the Dome Commission, which is supported largely with hotel tax revenue that has diminished since Hurricane Katrina. After the 2005 storm, the state issued bonds to refinance old debt and create $40 million for Dome improvements plus some working capital.

The bonds were structured with potentially volatile auction rates, which are vulnerable if the market of bond buyers dries up. That's what happened in early 2008, and the bond interest rates soared from about 4 percent to 12 percent.

The new debt burden was too much for the strapped Dome Commission, or as bond counsel Meredith Hathorn put it mildly Thursday, the rate "does not work on a cash flow basis." So the state acquired more than 99 percent of the $238 million in bonds at an interest rate of 1.25 percent.

The Dome Commission is suing financial giant Merrill Lynch for its role in the deal. The case is pending in federal court in the Southern District of New York. The bond commission rejected a settlement from Merrill Lynch offer in October and met again Thursday in executive session to discuss the litigation.

Meanwhile, the bonds could lose their federal tax-exempt status - a key selling point for government bonds -- if the state continues to hold on to them. State officials are anxiously awaiting a letter from the U.S. Treasury on whether the bonds can remain tax exempt until the state can place them back on the market.

"If we don't get the Treasury letter, we'll be stuck with these bonds forever," Kennedy said. "We might could sell them to Mississippi or something," he said, trying to find humor in an otherwise grim situation.

State officials want the bonds back out on the private market to relieve the burden on the state treasury.

Gov. Bobby Jindal signed a directive Wednesday authorizing Kennedy to continue maintaining the investment through 2010. A legislative panel also will weigh in on the matter this month.


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Structured Settlement Company Fairfield Funding Hires New General Counsel

Fairfield Funding, a company specializing in helping those looking to sell structured settlement or annuity payments, has added a new general council to their financial team. Attorney Marc Harris has a great deal of experience and understanding of the often complex laws regulating structured settlements and other assets.

(Vocus) December 4, 2009 -- Fairfield Funding is excited to announce the addition of Marc Harris, an attorney with almost 14 years of experience in the cash flow business with an emphasis on facilitating the purchase of structured settlement annuities and lottery prize assets, to their skilled team of financial service specialists. Fairfield Funding is a funding company that specializes in helping people receive cash for structured settlement, annuity, and lottery payments. In order to make sure every customer receives full compensation for their future settlement or lottery winnings, the Fairfield team strives to maintain a workforce that is dedicated to providing accurate information and exceptional service. Mr. Harris’s abundant knowledge and outstanding reputation in the financial services industry undoubtedly makes him a great candidate for the position of General Counsel for Fairfield Funding.

Since 1996, Marc has worked as counsel in the asset securitization industry for two different companies that have processed over one billion dollars from those seeking to sell lottery winnings and structured settlement cash flows. He has extensive experience with each state’s legislative and regulatory process relating to the purchasing of these assets throughout the country. This knowledge is invaluable to the funding profession, because almost each state has its own specific law controlling the assignment of annuity or lottery winnings.

Marc is a 1992 graduate of Florida State University, and he earned his law degree from Nova Southeastern University in 1995. Aside from advising companies and their clients about smart and effective funding, Marc is also a professor of business law. His knowledge of structured settlement laws and experience teaching others make him the perfect fit for Fairfield Funding.  

"I am very excited to join the Fairfield team,” said Fairfield’s General Counsel when asked his feelings about starting his new position. He continued, “Fairfield Funding’s intelligent financial model combined with its focus on customer satisfaction is changing our industry for the better. Their philosophy of deliberate growth greatly benefits clients who are looking to maximize the cash value from their structured settlement or sell annuity payments. I am extremely excited about helping Fairfield Funding provide quality information and outstanding service for our growing number of clients."

Fairfield Funding, a division of APIS, is a full service funding company specializing in the purchasing and funding of structured settlements, life settlements, pre-settlement, lottery payments, and can buy annuity payments. Collectively, Fairfield Funding management has over fifty years of experience in the financial services arena. The Atlanta-based company specializes in meeting both the short-term and long-term financial needs of its clients through low-cost funding transactions.


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