The Kewadin Casinos Gaming Authority has settled with its former investment partners, JLLJ Development and Lansing Future Development II.
According to the arrangement, the gaming board of the Sault Ste. Marie Tribe of Chippewa Indians agreed to pay $25 million. The agreement also stipulates Kewadin will pay up to $10 million to its former legal counsel, Patterson, Earnhart, Real Bird & Wilson LLP.
The settlement agreement should end a lengthy legal dispute between Kewadin Casinos and two of its former investment partners.
Dispute over two unbuilt Michigan casinos
An issue occurred because of two proposed Michigan casino projects near Detroit Metro Airport that never saw the light of day. A decade ago, the Sault Tribe planned to open a 125,000-square-foot, $245 million casino in Lansing. It also planned to build another casino in Romulus. Neither of the two broke ground.
In January, Joyce Draganchuk, the Ingham County Circuit Judge, issued an $88 million settlement to the development companies. The Sault tribe got a temporary restraining order from the development companies. They said the tribe shielded itself from financial liabilities from the court. The tribe’s lawyer said it would do nothing illegal to hide the tribe’s assets.
But after further negotiations, Kewadin Casinos and the two companies came to an agreement. Kewadin Casinos confirmed the settlement agreement, clarifying it will pay $25 million by today. The agreement also specifies that Kewadin will pay up to $10 million if successful in a misuse claim against its former legal counsel. If the lawsuit is unsuccessful, Kewadin will pay an additional $5 million instead of the $10 million.
Kewadin Casinos General Counsel Aaron Schlehuber said via the release:
“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. 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.”
Schlehuber says the law firm failed to defend the tribe properly
Patterson, Earnhart, Real Bird & Wilson LLP, has served as general counsel to Kewadin Casinos and Sault Tribe since June 2020.
The firm had previously indicated to casino management that it was qualified to handle the case. Schlehuber said the firm failed to defend Kewadin properly:
“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.”