Sixth Circuit Rejects Constitutional Challenge to Michigan Gaming Control Act

Here are (some of) the materials in Arabo v. Greektown Casino:

Arabo Brief

MGM Brief

Michigan Gaming Control Board Brief

CA6 Unpublished opinion

Update in Patrick Devlin Suit against Michigan Gaming Control Board

Here is today’s Sixth Circuit opinion in Devlin v. Kalm.

An excerpt:

Plaintiff Patrick J. Devlin appeals the district court’s order granting Defendants’ motions to dismiss based on the abstention doctrine and the court’s denial of Plaintiff’s motion for default judgment. Plaintiff argues that his termination from the Michigan Gaming Control Board was retaliatory in violation of his First Amendment rights under 42 U.S.C. §§ 1983, 1985, 1986, and 1988 and his due process rights, after he made disparaging remarks to the press about the Michigan Attorney General and the application of the state’s gaming laws to Native American tribes.

LTBB Council Sends Letter to MGCB to “Clarify” Incentive Payment Issue

Here is the article, via Pechanga.

An excerpt:

The Little Traverse Bay Bands of Odawa Indians Tribal Council has sent a clarification letter to the state regarding a statement made last month by Tribal Chairman Ken Harrington.

In early November, Harrington told various media outlets that Bay Mills Indian Community’s recently opened casino in Vanderbilt violated an agreement that the Little Traverse Bay Bands of Odawa Indians has in a compact with the state.

In response to this alleged violation, Harrington then announced that his tribe would discontinue making its annual 6 percent economic incentive payment to the state’s strategic fund — which according to the Michigan Gaming Control Board was $2,536,160.32 in 2009.

During an emergency meeting on Nov. 10, the tribal council then voted 8-1 to have Jim Bransky, the tribe’s general council, draft a letter to “clarify” the tribe’s position with the state, regarding its 6 percent economic incentive payment.

The letter, which was drafted and sent to Eric T. Bush, administrative manager for the Michigan Gaming Control Board on Nov. 10, states: “The tribal council would like to clarify that the final decision as to whether the (6 percent) economic incentive payment has been suspended will be made in February 2011, when the 2010 payment is due.

“The decision will be based on a careful analysis of the pertinent compact provisions in light of the opening of Bay Mills Indian Community’s Vanderbilt casino, as that situation unfolds.”

The tribal council goes on to state that, in the meantime, it will continue to set aside the money to make its payment to the state.

The morning after the tribal council’s emergency meeting, Harrington sent out an e-mail to all tribal council members, stating that their actions would have a “negative impact” on the tribe.

His e-mail, dated Nov. 11, reads: “Reverse action like this makes our tribe look divided and weak … what I’m seeing is reactive tribal council activity. I want us to work together.”

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Does the Michigan Gaming Control Board Have Immunity from Race Discrimination Claims?

Seems like a worthy research item, after reading this and the general shoddy treatment the Board has given the Sault Tribe all these years.

From Indianz:

The Michigan Gaming Control Board approved the transfer of the Greektown Casino Hotel in Detroit to a new group of owners over protests from members of the Sault Ste. Marie Tribe of Chippewa Indians.

Tribal members were upset because the tribe had to undergo an extensive investigation before obtaining the state license. The board waived the requirement for the new owners.

“A rubber glove in a doctor’s office is thorough. This was beyond that,” D.J. Hoffman, a member of the tribe’s board, said of his background check, The Detroit Free Press reported.

“It’s not fair to us,” added tribal member Denise Chase, The Detroit News reported. “You investigated us for two years.”

The tribe could have found new investors for the casino had it known about an exemption, tribal members said. “I’m just hoping that you apply the same standards that you expected of our tribe and our people,” Lana Causeley said, The Detroit News reported.

The casino went through bankruptcy proceedings.

City of Detroit OKs Greektown Bankruptcy Plan

From the Detroit News via Pechanga:

Detroit — A plan to hand control of Greektown Casino-Hotel to its largest group of creditors has been tentatively approved by the city of Detroit and could get the casino of out of Chapter 11 bankruptcy by the end of the year.
The tentative agreement was unveiled this morning at a meeting of the Michigan Gaming Control Board. The casino would be in the hands to the largest group of secured creditors, represented in the case by banking and investment giant Merrill Lynch.

“This is a major milestone,” said attorney Daniel Weiner of Bloomfield Hills-based Schafer and Weiner, who represents the debtors. The tentative agreement was reached with the city Friday, but needs approval by City Council, Mayor Dave Bing, the gaming board and U.S. Bankruptcy Court Judge Walter Shapero. A confirmation hearing in bankruptcy court is set for Nov. 3, which would be followed by a vote of the gaming board.

The other suitor for the hotel and casino was an effort lead by Bloomfield Hills business man Tom Celani, in partnership with Connecticut-based hedge fund Plainfield Asset Management.

Greektown’s owners, the Sault Tribe of Chippewa, filed for Chapter 11 protection on May 29, 2008. The Detroit casino has more than $777 million in debt.

Chuck Moore, a financial advisor working on the Greektown case, said he anticipates that the tentative bankruptcy agreement will ultimately be approved.

“We anticipate a contested confirmation hearing, but it will be approved,” Moore told the Michigan Gaming Control Board.

Greektown Casino Bankrupty Materials — Motion to Extend Time

Here is a selection of materials on the Greektown Holdings LLC’s motion to extend its planning period for finalize bankruptcy for 90 days. Other materials are here.




Creditors Object to Greektown Reorganization Plan

From the Detroit News:

DETROIT — Greektown Casino LLC, which is in bankruptcy reorganization, shouldn’t get an exclusive right until June 1 to file a turnaround plan, a group of creditors and a U.S. government representative told a judge.

Greektown’s request to block competing plans for more than eight months beyond the current Sept. 26 deadline should be denied because the company can realistically gauge its success long before then, U.S. Trustee Daniel McDermott said in an objection filed Monday in U.S. Bankruptcy Court in Detroit.

“The court should not permit the debtors to remain in Chapter 11 in a shroud of secrecy” while ” keeping other potential plan proponents off the playing field for such an extensive length of time,” McDermott said in the filing.

Closely held Greektown won court approval last June to borrow $150 million to continue operations and construction of a new hotel and gaming floor. McDermott questioned the viability of the company’s projected future operations during an economic decline in the U.S.

“The question that must be answered is whether the projections are reasonable for the foreseeable future in the given economic and political milieu in Detroit,” McDermott said in the filing.

Objections also were filed by the Michigan Gaming Control Board and the official committee of unsecured creditors.

Greektown sought court protection from creditors on May 29, citing cost overruns in a $332 million expansion. It opened in 2000, four years after Michigan citizens voted to legalize three gambling facilities in Detroit. It employs about 1,976 people, and attracts 15,800 visitors a day, the company said.

Greektown Restructuring Very Costly

From Crain’s Detroit Business Report:

Restructuring of Greektown Casino L.L.C. finances will cost $13.5 million in professional fees this year and an estimated $20 million by the time the Detroit casino emerges from Chapter 11 bankruptcy reorganization in 2009, a workout consultant told the Michigan Gaming Control Board Thursday.

The board gave approval to Greektown securing a $51.3 million interim loan to pay past due and current bills owed contractors working on the $330 million casino expansion that includes a 400-room hotel.

The loan, which received preliminary approval Wednesday from U.S. Bankruptcy Court Judge Walter Shapero, is part of a $150 million two-part financing package, the rest of which also needs approval from the court and control board.

Charles Moore, senior managing director of Birmingham-based Conway MacKenzie & Dunleavy, told the board that coupling costs of the bankruptcy filed May 29 with loan interest payments that will run more than $51 million means the casino is projected to lose almost $16 million in 2008, compared with a reported profit of $2 million last year.

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Suit on Tribal Casinos and State Liquor Licenses

From the Chicago Tribune:

A Michigan Gaming Control Board employee says Indian casinos should be forced to get liquor licenses.

Patrick Devlin said he filed a lawsuit this week to try and force Attorney General Mike Cox to require tribal casinos to comply with liquor control laws. Devlin said that not requiring tribes to spend the time and money needed to get licenses gives them a competitive advantage over Detroit casinos required to have licenses.

He said he also is concerned about liability issues.

A Cox spokesman said the lawsuit will be reviewed once it’s received.

Devlin said he is suing as an individual, not on behalf of the gaming board.

Tribes are considered sovereign nations and aren’t covered by some state laws. Devlin said liquor sales should be an exception.

And from the Detroit News:

Rusty Hills, a spokesman for Cox, said: “Compacts (on Indian casinos) are negotiated between tribes and the governor’s office. If Mr. Devlin has a beef he needs to bring it to the attention of the governor. As a lawyer and former member of the attorney general’s office he ought to know better.”

Excellent point….