Greektown Holdings Bankruptcy Materials

Here is the Sault Tribe’s news release on these materials.

greektown-bankruptcy-petition

greektown-motions

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mgcb-preliminary-objections

mgcb-exhibit-1-greektown-violation

mgcb-exhibit-2-order-approving-debt-transaction

mgcb-exhibit-3-mgcb-resolution-2006-01

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LSJ on Nelson Westrin

From the Lansing State Journal:

GRAND LEDGE – The man who wrote the regulations governing legalized gambling at three Detroit casinos and signed the licenses authorizing their operation has died.

Nelson Westrin, 61, of Grand Ledge, died Wednesday of an infection he suffered during a battle with prostate cancer. He was survived by his wife, Carole; three children; sister Mary Jo; and several nephews, nieces and grandchildren.

Westrin was a lifelong public servant, rising from a criminal trial attorney in the Ingham County Prosecutor’s Office to a long career in the state Attorney General’s Office, where he eventually advised the governor’s office on tribal gaming issues. In 1993, then-Gov. John Engler named him the state racing commissioner, then, in 1996, appointed him to head the newly created Michigan Gaming Control Board.

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Financial Pressure on Sault Tribe re: Greektown

From Indianz:

The Sault Ste. Marie Tribe of Chippewa Indians is facing pressure to make sure its commercial casino in Detroit complies with state law.

The tribe has fallen behind on construction of a permanent Greektown Casino. Revenues have dropped and the facility’s debt-to-earnings ratio isn’t meeting state requirements. In hopes of resolving the issue, the tribe last week announced that it landed a $100 million investment. The tribe would retain 60 percent ownership of the casino. But the Michigan Gaming Control Board is questioning whether the deal will resolve the tribe’s financial concerns. The board gave the tribe until June 10 to defend its future.

Get the Story:
Greektown Casino financing questioned (The Detroit News 5/14)

Sault Tribe Finds Investors for Greektown

From the Detroit News (H/T Indianz):

Owners of the Greektown Casino may sidestep a potential state-ordered sale after a group of suburban businessmen announced Tuesday it will invest $100 million in the struggling downtown Detroit gambling operation.

The casino’s owners, Greektown Holdings LLC, already had missed an April deadline from the state to bring its financial performance up to required levels, and saw its debt downgraded in April by two major rating agencies over fears the state would force a sale by the end of June.

Now, Bloomfield Hills-based Entertainment Interests Group LLC, says it will buy a 40 percent stake in Greektown.

The deal needs approval by the Michigan Gaming Control Board.

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Harold Monteau on NIGC Proposed Regulations

From Indian Country Today:

The DoJ and the NIGC have relegated their trust responsibility to tribes to a secondary position in favor of enforcing states’ rights and championing state causes. The monetary and societal damages that DoJ’s position has caused to tribes by its position on Class II gaming and its failure to enforce the provisions of IGRA, when states raise their sovereign immunity against the tribes, has resulted in tens of billions of dollars in damage to tribal economies. It has also resulted in untold damages to the health, safety and welfare of the trust beneficiaries: the tribes and individual Indians.

“Just like water or land rights, the United States has a responsibility to protect our reserved and statutory rights under Supreme Court rulings and the IGRA. Why should our economic rights under IGRA be any different than land or water rights? Even the U.S. Supreme Court recognized that our right to have gaming was not a statutory right, but a right reserved by inherent sovereignty. The DoJ cannot pick and choose which Indian rights it chooses to defend – not without exposing the U.S. government to tens of billions of dollars in liability for trust violations. If you thought Cobell was a doozy, wait until this one hits the courts.”

I agree with most everything here, given my reading of the legislative history of the Indian Gaming Regulatory Act (my paper is here). The post-IGRA history is even more troubling if held up to this light. My sense is that Congress (and Indian tribes) never wanted a wholesale federal regulatory presence involved in Indian Country gaming. The NIGC’s budget at the beginning and for several years after enactment was eight million dollars. IGRA did nothing more than codify existing common law as to Indian bingo and left Class III gaming entirely to the tribes and the states in the compacting process. The NIGC reviews management contracts, makes Indian lands determinations, and conducts very limited enforcement actions. I seriously doubt that, absent a wide-ranging amendment to IGRA, much if any of these regs, if adopted, will withstand federal court review.

What particularly irks me about this whole round of regulations is that no one has provided a conclusive factual predicate of need for these regs. Where’s the corruption? Where’s the crime? More and more studies keep coming out expecting to find increased crime and poverty around Indian gaming operations, but nothing significant is found.

Commissioner Monteau’s recollection of the Department of Justice intending to classify “anything that had a video face as a ‘Johnson Act’ device” smacks of Justice’s objections to IGRA in 1987 and 1988. This seems to be re-hashing old fights that Justice lost 20 years ago.

If nothing else, this seems to be a case of agency creep. Consider Michigan as the analog. In 1993, Gov. Engler wanted nothing to do with Indian gaming regulation when he executed the first round of Class III compacts in Michigan [check out section 8]. He left it entirely to the tribes (possibly thinking the tribes would botch the whole thing). The same was true in the 1998 compacts. But now that Michigan has the Michigan Gaming Control Board, a whole new state agency charged with regulating Detroit casinos, Michigan tribes are finding themselves under threat of (partly unauthorized) audits and enforcement actions from a state agency in a state that expressly disclaimed any interest in regulating Indian gaming.

What’s most unfortunate is that the NIGC has firmly placed itself in an adversarial position with regard to Indian gaming. As Commissioner Monteau’s op-ed demonstrates, each of these regs will face a stiff political and legal opposition from tribes. That’s not the way to conduct business.

Gatzaros Awarded Stake in Greektown Casino

From the Detroit News: “After nearly 10 years of investigating Greektown businessman Ted Gatzaros, the Michigan Gaming Control Board today awarded him partial ownership in a Detroit casino.”By a unanimous vote, the board approved Gatzaros’ application to become a 1 percent owner in Greektown Casino. Before the vote, board members said they could find no reason to reject the request.”

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“Gatzaros and his partner Jim Pappas were instrumental in pushing casino gambling in Detroit in the 1990s. After voters approved casino gambling in a statewide referendum, Detroit awarded the pair one of three casino licenses.

“Following an investigation, however, the Gaming Board indicated a license to the pair would not be approved. Gatzaros and Pappas ultimately ended up selling their interest to the Sault Ste Marie Tribe of Chippewa Indians.

“Under that sale agreement, the Tribe promised to sell a 4 percent interest in the casino and split the money between Gatzaros and Pappas. However, the agreement did not include a timetable for the sale.

“With the board’s decision today, Gatzaros has agreed instead to take 1 percent ownership in the casino.”