News Reedy Creek Improvement District and the Central Florida Tourism Oversight District

lazyboy97o

Well-Known Member
Exactly.

The issue is that the State of Florida promised RCID bond holders that it would not mess with these bonds.

My post was more about the cases referenced in the Bloomberg article, whose applicability can be debated.

This gets us back to my bigger point, which is understanding the political makeup of the Florida Supreme Court.

The Florida legislature has the right to shut down RCID. At least so far, RCID is not disputing this.

Instead, RCID is saying, "You are breaking your promise to bond holders." It's a reasonable argument.

So which takes precedent? The Florida statute allowing the legislature to shut down RCID or the State of Florida's promise to bond holders in 1967?

In my mind, it's a little fuzzy. Once RCID is shut down, it is effectively part of Orange County. The responsibilities of the government of RCID continue to exist, but under the guise of Orange County. With this in mind, has the State of Florida really broken its promise to RCID bond holders?

You and I might have one interpretation of this. Someone else might have another.

I've seen justices contort themselves into pretzels to reach conclusions they want to reach. Ultimately, will the Florida Supreme Court be sympathetic to Disney or to the governor?
This isn’t just a state issue. The US Constitution prohibits changing the terms of contracts.

What’s the argument that the state is not “limit[ing] or alter[ing] the rights of the District to own, acquire, construct, reconstruct, improve, maintain, operate or furnish the projects or to levy and collect the taxes, assessments, rentals, rates, fees, tolls, fares and other charges provided for”?

You also keep only focusing on Orange County but it is not the only county involved. There are District assets and responsibilities in Osceola County. Assets would not longer have common ownership. How would you break up the bonds for a project that crossed county lines? That means ownership of a financed asset is no longer with the entity servicing the bond. If some bonds go to Osceola County you’re now further muddying repayment.
 

GoofGoof

Premium Member
Exactly.

The issue is that the State of Florida promised RCID bond holders that it would not mess with these bonds.

My post was more about the cases referenced in the Bloomberg article, whose applicability can be debated.

This gets us back to my bigger point, which is understanding the political makeup of the Florida Supreme Court.

The Florida legislature has the right to shut down RCID. At least so far, RCID is not disputing this.

Instead, RCID is saying, "You are breaking your promise to bond holders." It's a reasonable argument.

So which takes precedent? The Florida statute allowing the legislature to shut down RCID or the State of Florida's promise to bond holders in 1967?

In my mind, it's a little fuzzy. Once RCID is shut down, it is effectively part of Orange County. The responsibilities of the government of RCID continue to exist, but under the guise of Orange County. With this in mind, has the State of Florida really broken its promise to RCID bond holders?

You and I might have one interpretation of this. Someone else might have another.

Justices sometimes contort themselves into pretzels to reach conclusions they want to reach. (Which gets overturned on appeal.) Ultimately, will the Florida Supreme Court be sympathetic to Disney or to the governor?
But it’s not up to the FL Supreme Court. If this was part of the continuing bond offerings it falls under Federal Securities Fraud. It would go to the SEC not the FL courts and would need to be appealed in Federal Court. We have already seen the value of these bonds fall. The ratings agency has downgraded them. From the prospective of the bondholders they are not in the same position at all. Is Orange County (which includes an urban center in Orlando…see Detroit a decade ago) the same risk as RCID who has 1 major taxpayer with no reason to stop paying taxes to itself. It’s impossible to think the Federal Government will look the other way on that because the legislature and Governor wants to teach a corporation a lesson (a motivation they continue to remind everyone who will listen about).
 

chrisvee

Premium Member
hasn’t harm already been done to the bond holders given that RCID has lost taxation ability as of 6/1/2023?

and isn’t it impossible for RCID to issue any new bonds at this point?

it just seems as if the legislature has really stepped in it so to speak but not taking the time to think this through

revenge is of course a dish best served cold
 

GoofGoof

Premium Member
hasn’t harm already been done to the bond holders given that RCID has lost taxation ability as of 6/1/2023?

and isn’t it impossible for RCID to issue any new bonds at this point?

it just seems as if the legislature has really stepped in it so to speak but not taking the time to think this through

revenge is of course a dish best served cold
Yes harm was done. The bonds are already trading down 10% after this:

The Fitch ratings agency downgrade is not a full downgrade. They are just on negative watch which means the agency sees a potential for a more negative outcome in the future. It’s all about the uncertainty. RCID could still go out and issue bonds tomorrow if they wanted but they would come at a higher interest rate for sure. They are still investment grade so it wouldn’t be a junk bond. An investor who is willing to take a little more risk for a higher return may be interested. Current bond holders are likely more risk adverse.

 

GoofGoof

Premium Member
Are you suggesting that fraud is being commited?
Yes, absolutely. From a federal perspective a municipality in the state of FL issued bonds publicly with a guarantee from the state and now the state is reversing that guarantee through legislation and has negatively impacted the bond holders who a reasonable person would see relied on that guarantee. That’s securities fraud.

Securities fraud is described as defrauding someone connected to a security or commodity, or obtaining any money or property from the purchase or sale of a security by using means of false or fraudulent pretenses, representations, or promises.
 

lazyboy97o

Well-Known Member

Just in the first 10 minutes
  • Ignores that Florida has nuclear power plants
  • Kissimmee is nowhere near Walt Disney World, so they’d never had oversight
  • Mischaracterizes impact fees, which are a small one time fees. Universal doesn’t pay Orange County impact fees for the North Campus because it’s in Orlando.
  • Reedy Creek instituted standards that didn’t exist.
  • Confuses the timeline. Walt was dead before the District was created.
 

lazyboy97o

Well-Known Member
Contracts can be changed by mutual agreement by both parties.

Contracts can be transferred.

Contracts (generally) survive when someone dies. Effectively, RCID is "dying", with its inheritors being Orange and Osceola Counties.

Is the State of Florida allowed to transfer RCID bonds to the governing bodies that replace it?

I'll say it again, this time a little differently. It doesn't matter what you and I think. What matters is what the members of the Florida Supreme Court think.

At least until RCID decides to appeal any decision to federal courts.

With this in mind, what's your opinion of the Florida Supreme Court? :)
This isn’t a change by mutual agreement.

Personal contracts are undertaken with the knowledge that people die. The Reedy Creek charter sets out a perpetual existence. It wasn’t intended to fulfill a specific purpose and then wind down, it was supposed to continue existing.

We’re not just talking about a simple transfer to a single new entity. The assets and obligations have to be split and separated from each other and their revenue source. The new solar power projects aren’t even in the constituent counties, so who gets that property and liabilities? The state hasn’t laid out a path for apportioning the assets.

I don’t think the Florida Supreme Court would lightly jeopardize the full faith and credit of Florida and its various subdivisions. We’re talking about the potential for extremely serious consequences.
 

Obobru

Well-Known Member
I guess the mouse has a plan
e91d9829b970cfbc2bdb9b7e1d84a546.jpg
 

UNCgolf

Well-Known Member


I'd love to know his actual name to look up his credentials. He must be a solo practitioner because I can't imagine any halfway reputable firm would allow him to have a Youtube channel, especially one that's providing misleading at best information.

He's either a terrible attorney or he knows he's not being completely truthful on his channel and is just trying to make extra money. It seems like the kind of thing the bar would look down on, though.
 
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lazyboy97o

Well-Known Member
I'd love to know his actual name to look up his credentials. He must be a solo practitioner because I can't imagine any halfway reputable firm would allow him to have a Youtube channel, especially one that's providing misleading at best information.

He's either a terrible attorney or he knows he's not being completely truthful on his channel and is just trying to make extra money. It seems like the kind of thing the bar would look down on, though.
Did you actually make it through the whole thing? I’m guessing it doesn’t get better?
 

Sirwalterraleigh

Premium Member
Think of it this way.

The U.S. Supreme Court is conservative.

The Eleventh Circuit (which oversees Florida) is conservative.

The Florida Supreme Court is conservative.

These are the legal minds that ultimately matter. Not an attorney in a YouTube video or one who writes an article for Bloomberg.

Laws are complex, with different justices emphasizes different aspects of the law.

How much confidence do you have that all three will rule in favor of RCID/Disney?
I’m 99% all will rule against Florida
 

UNCgolf

Well-Known Member
Think of it this way.

The U.S. Supreme Court is conservative.

The Eleventh Circuit (which oversees Florida) is conservative.

The Florida Supreme Court is conservative.

These are the legal minds that ultimately matter. Not an attorney in a YouTube video or one who writes an article for Bloomberg.

Laws are complex, with different justices emphasizes different aspects of the law.

How much confidence do you have that all three will rule in favor of RCID/Disney?

I'm certainly not 100% confident, but judges tend to be less politically motivated than, well, politicians. They of course have a particular mindset from which they approach cases, but generally speaking, conservative judges lean towards pro-business decisions in a way that would frown on this. Not just in terms of Disney itself, but also in terms of potential contractual infringement and damage to bondholders.

They also tend to have a wider view about what these decisions will do overall in other circumstances, not just the particular case they're deciding. Look at the number of staunchly conservative judges that repeatedly shot down the election fraud cases.
 

Chip Chipperson

Well-Known Member
Contracts can be changed by mutual agreement by both parties.

Contracts can be transferred.

Contracts (generally) survive when someone dies. Effectively, RCID is "dying", with its inheritors being Orange and Osceola Counties.

Is the State of Florida allowed to transfer RCID bonds to the governing bodies that replace it?

I'll say it again, this time a little differently. It doesn't matter what you and I think. What matters is what the members of the Florida Supreme Court think.

At least until RCID decides to appeal any decision to federal courts.

With this in mind, what's your opinion of the Florida Supreme Court? :)

Where is the mutual agreement here?
 

flynnibus

Premium Member
How much confidence do you have that all three will rule in favor of RCID/Disney?

Conservative tends to lean pro-business, less gov. I'm not sure how pointing out all the conservatives thinks you believe that means they will throw business under the bus?

This is also why it's better RCID fight this - not make this into an emotional argument. Make it about straight up contract law and the power of government.
 

mikejs78

Premium Member
I'm simply suggesting that I expect surprises along the way, rulings that I don't necessarily agree with. (Hence why I wrote, "How much confidence do you have" in "all three".)

Right now, Disney is effectively pursuing this through its government (i.e. RCID). (With RCID acting independently of Disney.) Technically, it's one special district within the state of Florida (that the State of Florida created) against the State of Florida.

I expect Disney to ultimately win in the courts, but it could get messy along the way. If this even makes it through the courts before Disney/Florida figure something out.
There may be the odd judge that rules the wrong way, but I think most judges, even conservative ones, will go with RCID on this one. If they don't, Florida's bond rating could tank completely and destroy the Florida economy.
 

GoofGoof

Premium Member
I'm simply suggesting that I expect surprises along the way, rulings that I don't necessarily agree with. (Hence why I wrote, "How much confidence do you have" in "all three".)

Right now, Disney is effectively pursuing this through its government (i.e. RCID). (With RCID acting independently of Disney.) Technically, it's one special district within the state of Florida (that the State of Florida created) against the State of Florida.

I expect Disney to ultimately win in the courts, but it could get messy along the way. If this even makes it through the courts before Disney/Florida figure something out.
I would like to hope that the courts cherish their independence and understand the role they play in the checks and balances. I don’t think every conservative judge will automatically back the Republican legislature no matter what they do. Also as has been pointed out numerous times this particular action is ”unRepublican” in the traditional sense so many conservative judges who are not newly appointed won’t necessarily agree with it. Politicians need to tow the party line to get re-elected even if they don’t personally agree with it but judges who are appointed don’t face that same pressure.
 

UNCgolf

Well-Known Member
I would like to hope that the courts cherish their independence and understand the role they play in the checks and balances. I don’t think every conservative judge will automatically back the Republican legislature no matter what they do. Also as has been pointed out numerous times this particular action is ”unRepublican” in the traditional sense so many conservative judges who are not newly appointed won’t necessarily agree with it. Politicians need to tow the party line to get re-elected even if they don’t personally agree with it but judges who are appointed don’t face that same pressure.

I almost mentioned this -- judges who were appointed in the past 6 or so years are more likely to be on board (or will figure out a way to be on board) because judicial appointments have become so hyper partisan. People who were considered unqualified made it onto the bench solely for political reasons.

That's not to suggest that all of the more recent appointees are unqualified or would be on board with it; just that a higher percentage of them are likely to support partisan political goals than longer serving judges.
 

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