Timeline for loan to tribal corporation
March 2009: LBC, a corporation of the Lower Brule Sioux Tribe, agrees to purchase Westrock Group stock for $12.3 million in promissory notes to be paid off when its subsidiary, LBC Western Holdings, obtains a federally guaranteed loan.
September 2009: Lower Brule Sioux Tribe announces acquisition of Westrock Group, a New York financial services company, and its subsidiaries.
December 2009: Lower Brule Community Development Enterprise, a corporation of the tribe, submits an application to the U.S. Interior Department for a department guarantee of 90 percent of a $22.5 million loan it plans to make to LBC Western for the purchase of Westrock stock and to fund company operations.
The Interior Department approves the loan guarantee.
October 2010: The Financial Industry Regulatory Authority advises the Interior Department that it has issued cease-and-desist letters to two Westrock subsidiaries because the companies had failed to demonstrate compliance with rules requiring broker-dealers maintain a certain level of net capital. Also, a Westrock subsidiary, Westrock Advisors, has become defunct.
The Lower Brule Community Development Enterprise responds that shutting down Westrock Advisors had eliminated a cash drain and had actually improved the value of Westrock stock.
The loan from the Lower Brule Community Development Enterprise to LBC Western closes, according to the tribal companies.
November 2010: The Lower Brule Community Development Enterprise advises the Interior Department that the loan will be funded in a matter of days.
April 2012: Great American Life Insurance Co. pays the development corporation about $20 million for the federally guaranteed portion of the loan.
September 2012: Westrock Group files for bankruptcy.
April 2013: Great American declares LBC Western in default on payments of loan principal and interest.
June 2013: Great American files claim with Interior Department for the $20 million loan guarantee.
May 2016: The Interior Department Board of Indian Appeals upholds department decisions not to pay $20 million claim by Great American for failed loan sold to it by Lower Brule Community Development Enterprise. The board says there was no evidence a loan by the development corporation to LBC Western was ever made.
Sources: Interior Department Board of Indian Appeal, Interior Department Office of Inspector General, Human Rights Watch.