In re: Emerald Casino, Inc.

Federal 7th Circuit Court
Civil Court
Bankruptcy
Citation
Case Number: 
Nos. 16-1075 et al. Cons.
Decision Date: 
August 11, 2017
Federal District: 
N.D. Ill., E Div.
Holding: 
Affirmed and vacated in part and remanded

Dist. Ct. did not err in finding that defendants-certain former Emerald Casino officers/shareholders in instant Bankruptcy Ct. adversary proceeding breached contracts they had with debtor-Casino that resulted in Illinois Gaming Bd.’s decision to revoke Casino’s gaming license. Relevant shareholder’s agreement with Casino required defendants to comply with all of Bd.’s rules and to not commit acts that would jeopardize renewal of Casino’s license, and record showed that: (1) defendants violated said rules by failing to disclose either agreements to relocate Casino, construction contracts for new location and/or stock transfers among shareholders; and (2) Bd. cited instant rule infractions when revoking Casino’s gaming license. While defendants argued that requisite causation had not been established because Dist. Ct. had failed to find that any individual defendant’s failure to disclose information to Bd. caused Bd. to investigate and revoke gaming license, Dist. Ct. could properly find that: (1) each rule violation was material element and substantial factor in Bd.’s decision to revoke Casino’s license and that all defendants were responsible for at least one violation; and (2) Bd.’s decision to revoke Casino’s license was foreseeable to all defendants given Bd.’s authority to revoke gaming licenses under Ill. statute and given language in contract prohibiting defendants from not committing acts that would jeopardize Casino’s gaming license. Also, Dist. Ct. did not err in valuing Casino’s license at $272 million based in 2008 bid for license, although Dist. Ct. erred in failing to make each defendant jointly and severally liable for said damage figure.