Earlier this month, the Kewadin Casinos Gaming Authority (KCGA) and the Sault Ste. Marie Tribe reached a settlement with investors for $25 million. The agreement is significantly less than the almost $90 million that the tribe was ordered to pay at the beginning of this year.
The lawsuit was filed by the casino brand’s previous investment partners, JLLJ Development and Lansing Future Development II. Back in January, the Ingham County court system and Judge Joyce Draganchuk ruled in favor of the developers requiring the KCGA to pay over $88 million in lost profits and initial investments.
According to the case filed by JLLJ Development and Lansing Future Development II, damages for the unbuild casino near Detroit totaled $61.2 million, while the unbuilt casino in Lansing caused $29.5 million.
The tribal community and the KCGA are most likely experiencing a deep sigh of relief after negotiating the amount down to just $25 million.
History Behind the Incident
The Sault Ste. Marie Tribe of Chippewa Indians represents the largest group of Native peoples in Michigan, with over 44,000 members. The tribe operates four small tribal casinos in the upper peninsula. Before working with investors for the Lansing and Detroit casino, the tribe also operated the Hollywood Casino at Greektown until 2008. When the recession hit in 2008, the casino went bankrupt and was sold to investors. The casino gaming authority for the tribe was then able to acquire funding and investments sometime after 2012 to build the two proposed casinos.
The catch, however, was that the casinos were to be built on off-reservation land. JLLJ Development and Lansing Future Development II were led to believe by the KCGA that gaining development approval on the off-reservation land would be easy.
The recent agreement for a $25 million settlement is nearly a 75% decrease from the $88 million in damages previously ordered by the Ingham County Court system.
On top of the $25 million, the tribal community has also agreed to pay up to $10 million from the proceeds of its malpractice claim against its former legal counsel, Patterson, Earnhart, Real Bird & Wilson LLP. According to the agreement, Kewadin Casinos and the Sault Tribe selected the Patterson law firm as their representatives in June 2020 to defend the case.
According to uppermichiganssource.com, the law firm, “had previously indicated to casino leadership that it was qualified to handle this case. The malpractice suit against the firm focuses on its failing to properly defend Kewadin in the ligation, resulting in a default judg[e]ment.”
Kewadin Casinos General Counsel Aaron Schlehuber commented on the situation, stating: “The default judgment caused by the Patterson firm has severely impacted the reputation of both Kewadin Casinos and Sault Tribe, and it’s important that they are held into account for the $88 million in damages against us.”
If the KCGA fails in its lawsuit against the Patterson firm, then the agreement states that it will pay $5 million in place of the $10 million described above.
“This agreement allows Kewadin to move forward and now focus 100% of its efforts on providing the best entertainment services possible to the areas we serve,” Schlehuber said. “Casino revenues contribute significantly toward the services the Sault Tribe provides to its members, including health care and cultural programs, so this settlement ensures that the casino will continue to have the resources to maximize our operations and continue serving the community.”
Mac Daniel is a writer for PlayOnlineCasino and PlayOnlineSportsBetting. He has experience writing about a wide variety of topics, including healthcare, tourism, non-profit organizations, and most recently casino and sportsbetting news. To check out more of his work, visit: playonlinemichigan.com