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Settlement resolves casino money cases

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Indiana Lawyer Rehearing

The six-year casino revenue litigation that sparked multiple lawsuits statewide, went to Indiana’s appellate courts multiple times, and led to legislative initiatives is coming to a close.

Under an executed settlement agreement, most of the litigation involving how East Chicago and various entities used the casino money will be resolved. East Chicago will receive $11.7 million originally designated for the for-profit East Chicago Second Century Inc. – which is now being dissolved. Payments to Second Century were halted by the Indiana Gaming Commission in 2006 after an investigation found the corporation was spending its small percentage of casino revenue on non-economic development, which went against the local development agreement enacted in the 1990s and was at the heart of this litigation.

Now, the 31 city properties that Second City owns will be transferred to the nonprofit Foundations of East Chicago, according to the settlement. The Foundations will receive $20 million, which is its share of the 2 percent of casino revenues under the 1994 Local Development Agreement. Those payments had been put on hold in 2007 after Foundations filed a lawsuit challenging the legitimacy of that deal.

A new local development agreement enacted in June following a settlement in that suit gives both the city and Foundations a percentage of the casino revenues to be spent on economic development, infrastructure, or public safety.

Second Century attorney J. Lee McNeely will receive $1.2 million for his years of work representing the entity, the agreement states.

According to the settlement, a total of five pending lawsuits will be resolved – Foundations v. East Chicago, No. 9D13-0705-PL-019348; Second Century v. Resorts, No. 49D01-0504-PL-014394; Second Century v. Indiana Gaming Commission, et al, No. 49D01-0606-CC-025440; Second Century v. Resorts, No. 49D01-0706-PL-022673; and City of East Chicago v. Indiana Gaming Commission, No. 49D05-1106-PL-022283.

In the past two years, the lines of litigation have gone up to the Court of Appeals several times – including two pending appeals – and the Indiana Supreme Court has issued three decisions delving into these local development agreement and casino-revenue related issues - Zoeller v. Second Century in April 13, 2009, City of East Chicago v. Second Century in June 2009, and Foundations of East Chicago v. East Chicago and State in May 2010.

With this settlement, the only outstanding claim will be one brought by the Indiana attorney general. The AG praised the agreement and said all the blame for the years of court battles fall onto former East Chicago Mayor Robert Pastrick and his administration for allowing economic development money to be paid to the for-profit Second Century. This litigation is not directly connected to the federal civil racketeering suit against Pastrick that last year resulted in a $108 million judgment against the former mayor and his top allies, but how the casino revenue agreements and how that money was spent became a part of those court arguments and led the AG to push for legislation seeking more transparency in how local development agreements are reached.

Rehearing "Second Century suit can proceed" IL Nov. 10-23, 2010

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  1. "So we broke with England for the right to "off" our preborn progeny at will, and allow the processing plant doing the dirty deeds (dirt cheap) to profit on the marketing of those "products of conception." I was completely maleducated on our nation's founding, it would seem. (But I know the ACLU is hard at work to remedy that, too.)" Well, you know, we're just following in the footsteps of our founders who raped women, raped slaves, raped children, maimed immigrants, sold children, stole property, broke promises, broke apart families, killed natives... You know, good God fearing down home Christian folk! :/

  2. Who gives a rats behind about all the fluffy ranking nonsense. What students having to pay off debt need to know is that all schools aren't created equal and students from many schools don't have a snowball's chance of getting a decent paying job straight out of law school. Their lowly ranked lawschool won't tell them that though. When schools start honestly (accurately) reporting *those numbers, things will get interesting real quick, and the looks on student's faces will be priceless!

  3. Whilst it may be true that Judges and Justices enjoy such freedom of time and effort, it certainly does not hold true for the average working person. To say that one must 1) take a day or a half day off work every 3 months, 2) gather a list of information including recent photographs, and 3) set up a time that is convenient for the local sheriff or other such office to complete the registry is more than a bit near-sighted. This may be procedural, and hence, in the near-sighted minds of the court, not 'punishment,' but it is in fact 'punishment.' The local sheriffs probably feel a little punished too by the overwork. Registries serve to punish the offender whilst simultaneously providing the public at large with a false sense of security. The false sense of security is dangerous to the public who may not exercise due diligence by thinking there are no offenders in their locale. In fact, the registry only informs them of those who have been convicted.

  4. Unfortunately, the court doesn't understand the difference between ebidta and adjusted ebidta as they clearly got the ruling wrong based on their misunderstanding

  5. A common refrain in the comments on this website comes from people who cannot locate attorneys willing put justice over retainers. At the same time the judiciary threatens to make pro bono work mandatory, seemingly noting the same concern. But what happens to attorneys who have the chumptzah to threatened the legal status quo in Indiana? Ask Gary Welch, ask Paul Ogden, ask me. Speak truth to power, suffer horrendously accordingly. No wonder Hoosier attorneys who want to keep in good graces merely chase the dollars ... the powers that be have no concerns as to those who are ever for sale to the highest bidder ... for those even willing to compromise for $$$ never allow either justice or constitutionality to cause them to stand up to injustice or unconstitutionality. And the bad apples in the Hoosier barrel, like this one, just keep rotting.

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