A struggling public arena in Wenatchee, Wash., hired Piper Jaffray & Co. to underwrite its upcoming refinancing of $42 million of outstanding defaulted debt. The firm had handled the previous deal that ran into trouble.
The board of the Greater Wenatchee Regional Events Center Public Facilities District also hired Foster Pepper as legal counsel, which employs an attorney that also worked on the previous deal, the according to the Wenatchee World newspaper.
The Securities and Exchange Commission is investigating everyone involved in issuance that led to the default on the debt.
The regulator has asked the city to voluntarily produce several different types of information, including anything tied to the event center's finances and bond anticipation note issuance.
Piper Jaffray was the underwriter for the 2008 issuance of the notes, while K&L Gates LLP was note counsel.
The SEC asked to see any requests for the district's proposals, contracts, or anything tied to advice from legal or financial advisors.
The district, formed in 2006 to build and operate the Toyota Town Center arena in Wenatchee, defaulted on $42 million of bond anticipation notes upon their Dec. 1 maturity because they lacked the money or means to pay them off.
In 2008 the district issued three note series: $5 million of limited sales-tax Bans, and $5.5 million and $31 million of revenue and special-tax Bans, respectively. It issued the notes to help fund the 4,300-seat arena, which has been a financial disaster since it opened in 2008.
The default followed failed rescue attempts by the city, which has a contingency agreement with the district to back the debt, and the state of Washington.
In April, voters in the counties that make up the district approved a 0.1% sales tax increase on that will secure long-term bonds to allow it to refinance the defaulted bond anticipation notes.
