Disney's Reedy Creek tells bondholders that dissolution of district is illegal

Posted Wednesday, April 27, 2022 12:06 PM | Contributed by Jeff

In a statement issued to its bondholders last Thursday, Reedy Creek pointed out that the 1967 law also includes a pledge from Florida to its bondholders. The law states that Florida "will not in any way impair the rights or remedies of the holders... until all such bonds together with interest thereon, and all costs and expenses in connection with any act or proceeding by or on behalf of such holders, are fully met and discharged." Due to that pledge, Reedy Creek said it expects to continue business as usual.

Read more from CNN.

Wednesday, April 27, 2022 12:12 PM
Jeff's avatar

That's an interesting chicken and egg legal problem. The law says this but what if you arbitrarily change the law? The dissolution also requires that the officials of the district vote to do so as well. And of course, there's the novel idea that as public retribution for Disney's position on Don't Say Gay, this is essentially punitive resolution against one company for exercising its First Amendment rights made possible by the Citizens United decision.

Whatever it is, Disney doesn't seem particularly worried at the moment. A lot can happen in the next 14 months.


Jeff - Editor - CoasterBuzz.com - My Blog - Phrazy

+2Loading
Wednesday, April 27, 2022 1:23 PM

It can be changed---for example, the statute that required District land owners to vote to dissolve was arguably changed by the "notwithstanding 189.072 (2)" language in the bill that passed. But, you need to know what to change to change it, and each time you find something new that you didn't address the last time, you might need to pass a new statute.

Disney is very motivated to find all of the reasons why what the legislature has done is inconsistent with prior law. The FL legislature might be less inclined to do all that legwork and searching. At least they didn't find this one and come to the same conclusion re: what it requires. And, Disney only needs to offer one such reason at a time.

(And, it might or might not mean what Disney says it means. We'll see I guess.)

Last edited by Brian Noble, Wednesday, April 27, 2022 1:24 PM
+0
Wednesday, April 27, 2022 1:27 PM

I agree its overly simplistic to say Florida law currently requires/prohibits X or Y so it won't work. Florida law can be changed by the Florida legislature and governor. And at this point, both seem to be onboard with dissolving Reedy Creek and making it work.

Its pretty common to have provisions in bond transactions protecting tax revenues needed to support the bonds. Don't want a legislature/city council/municipality to reduce/eliminate the revenues necessary to repay the bonds. But the bonds likely can be prepaid (may be a premium to be paid as well).

You could create a similar entity now that is controlled by the county and not Disney. Has the same revenue sources. Before Reedy Creek is dissolved, the county could issue new bonds and use the proceeds to repay the existing RC issued bonds. At that point the law cited above does not prohibit dissolving Reedy Creek.

Devil is in the details as they say. Would need to look at the terms of the existing bonds and Florida law (including its Constitution). Will be challenging and may be impossible (or practically impossible) to do so. But saying current Florida law doesn't allow is too easy.

Desantis will be past his re-election by the time the dissolution is set to happen and may be moving on to other things at that point. People often have short memories in politics.

ETA: I have seen some people who say that the most likely outcome is a new special district with reduced Disney control which would be the product of negotiations between Florida and Disney.

Last edited by GoBucks89, Wednesday, April 27, 2022 1:42 PM
+0
Wednesday, April 27, 2022 2:48 PM
Jeff's avatar

You make an interesting point though... I wonder if the counties could mutually agree on creating a new district under their own governance, but essentially give it the autonomy that they had previously. The feel that I get from county leaders is that they don't want the responsibility. And I get why, because there are mini-freeway systems and utilities there built to handle millions of tourists every year, and I doubt there's any easy way to distribute that burden to the rest of the county's property owners.


Jeff - Editor - CoasterBuzz.com - My Blog - Phrazy

+0
Thursday, April 28, 2022 9:23 AM
Brent Sullivan's avatar

I thought the article I read about Texas inviting Disney to relocate there was funny.
I know they weren't 100% serious because it is too massive, and it would be too expensive to tear down and rebuild anywhere else.

Just the thought of them relocating the entire Disney World resort made me chuckle.

+1Loading
Thursday, April 28, 2022 9:41 AM

Seems like all it would take to relocate would be some pixie dust.

Bibbidi-Bobbidi-Boo

+1Loading
Thursday, April 28, 2022 9:52 AM
Jeff's avatar

If social injustice is bad in Florida, Texas would be, at best, a lateral move.


Jeff - Editor - CoasterBuzz.com - My Blog - Phrazy

+8Loading
Thursday, April 28, 2022 10:05 AM

Brent Sullivan said:

I thought the article I read about Texas inviting Disney to relocate there was funny.
I know they weren't 100% serious because it is too massive, and it would be too expensive to tear down and rebuild anywhere else.

Just the thought of them relocating the entire Disney World resort made me chuckle.

What’s also funny about it is that Texas also is run by corrupt Republicans who pass the same kind of hate legislation that started all of this.

+6Loading
Thursday, April 28, 2022 10:18 AM

The only reason Texas hasn't passed a don't say gay bill is that the legislature only meets every 2 years. It will be at the top of the agenda for January 2023.


+0
Thursday, April 28, 2022 10:40 AM
ApolloAndy's avatar

Also, Texas weather is significantly less forgiving. It's way too hot (3-5 mo.) or too cold (2 mo.) more often than people think.


Hobbes: "What's the point of attaching a number to everything you do?"
Calvin: "If your numbers go up, it means you're having more fun."

+0
Thursday, April 28, 2022 4:20 PM
kpjb's avatar

Maybe they could build another Disney in Cancun for when it's too cold.


Hi

+6Loading
Thursday, April 28, 2022 10:18 PM
Jeff's avatar

This NPR story is one of several that give attorney opinions that this is never going to hold up

https://www.npr.org/2022/04/28/1095225258/disney-world-florida-debt


Jeff - Editor - CoasterBuzz.com - My Blog - Phrazy

+1Loading
Thursday, April 28, 2022 11:04 PM

Seems like more of what we have already seen: Can't work under current Florida law. One, what if Florida law is changed? Two, what if between now and next June, there are changes such that Reedy Creek doesn't simply dissolve (as per the current 2 page law)?

In the NPR piece:

Attorney Jacob Schumer said the state has several options to address the situation "and maybe make the case not so clear cut. But as the law stands, I can't see any way it holds up against a challenge."

In another article, Atty Schumer says:

“Florida cannot promise that they won’t mess with Reedy Creek, and then dissolve Reedy Creek. So Reedy Creek, according to this promise, has to exist, so long as there’s a debt,” said Maitland-based attorney Jacob Schumer.

He said there are two ways Florida can work around it: the state pays off all the debt, even though some of it can’t be paid off for five years, or the state sets up a successor to Reedy Creek that functions like its predecessor, if it gets to that point.

https://www.wftv.com/news/local/what-actions-could-reedy-creek-take...HYSKF2BLM/

+0
Friday, April 29, 2022 8:46 AM

Quit giving them ideas, Schumer!!! Jeez.

Last edited by RCMAC, Friday, April 29, 2022 8:47 AM
+1Loading
Friday, April 29, 2022 8:52 AM

I almost forgot for a second that we're only having this discussion because the governor threw a little tantrum like a child whose got their feelings hurt because someone doesn't like what he wants to do. I know plenty of kids with more maturity.

Last edited by RideOn, Friday, April 29, 2022 8:54 AM
+10Loading
Friday, April 29, 2022 11:01 AM
LostKause's avatar

While I don't think anything will happen to Reedy Creek because of this, I do find the reasons that DeSantis is retaliating against them to be terrifying. He is reinforcing the notion that his party is the party against equality. He is showing that if you don't support his hate, he will try to destroy you. It is right out of the Donald Trump playbook, and is the most unamerican thing I have seen in a long time.

And it seems to be making him popular enough for him to carry out his plans to run for President or Vice President in 2024. We are living in the freekin' Twilight Zone.


+7Loading
Friday, April 29, 2022 11:08 AM

DeSantis took a sickening victory lap on Fox News last night and came pretty close to invoking "Walt Disney is turning over in his grave." I believe his exact working was "Walt Disney wouldn't want that."


+0
Friday, April 29, 2022 3:10 PM

This was fantastic on two levels. One, the ridiculousness of the pro-Desantis folks. But having done a College Program and then several years of working full time at WDW, folks like this (not the political aspects) exist both as park guests and Cast Members. I lost it at "we're not a couple, we're brother and sister" because it rings so true with some of the different individuals I met during my WDW years. Disney superfans really are their own breed.

+2Loading
Friday, April 29, 2022 3:45 PM
Vater's avatar

"Fantastic" is not a word I would use for that on any level.

+2Loading

You must be logged in to post

POP Forums - ©2022, POP World Media, LLC
Loading...