Jenner & Block

Jenner & Block Secures $272 Million Win for Casino Bankruptcy Trustee

In a victory for Jenner & Block client Frances F. Gecker, the Chapter 7 bankruptcy trustee for Emerald Casino, U.S. District Judge Rebecca R. Pallmeyer ruled on Tuesday, September 30, that six former officer and director defendants breached an agreement with Emerald Casino by failing to comply with Illinois gaming regulations.  The ruling directed the defendants to each pay more than $45.33 million for a total damages of $272 million.

In her 289-page opinion, Judge Pallmeyer said that the defendants’ breach of the agreement prompted the Illinois Gaming Board (IGB) to take the unprecedented step of revoking Emerald’s gaming license,  its only significant asset, thus forcing Emerald into liquidation under Chapter 7 of the U.S. Bankruptcy Code.  She found in favor of Gecker on the claim that the six defendants violated Emerald’s amended shareholders’ agreement, which required them to comply with the Riverboat Gambling Act, and the IGB’s rules and orders.

The Court ruled that “Defendants individually made a promise—a rather unforgiving one—to Emerald to comply with IGB rules. The IGB found that Defendants had breached that contract, and the reviewing court affirmed that determination. Emerald lost its valuable license as a consequence.”

The Jenner & Block trial team consisted of Partners Catherine L. Steege, Robert L. Graham and Keri L. Holleb Hotaling and Staff Attorney Seth J. Schriftman.  The Emerald team was supported by Partners Barry Levenstam, Joel T. Pelz and Melissa M. Root, as well as Associates Angela M. Allen and Landon Raiford, Paralegals Debby Abelson and Matt Prather, and Legal Secretary Beth Perkins.  Co-counsel with Jenner & Block in this case is the law firm of Hughes, Socol, Piers, Resnick & Dym, Ltd.

A story about the federal ruling can be found in the Chicago Daily Law Bulletin and Law360 (subscription may be required).