Kewadin Casinos and former investors reach settlement over failed properties
Kewadin will later also owe between $5m – $10m in additional payments, dependent on a malpractice lawsuit.
Failed plans for Kewadin Casinos to build an off-reservation casino near Detroit Metro Airport, and another casino in Lansing, have resulted in a settlement with former investors. The Kewadin Casinos Gaming Authority will pay $25m to investors this week, according to the Detroit Free Press.
The Sault Ste. Marie Tribe of Chippewa Indians currently operates five Kewadin casinos in Michigan’s Upper Peninsula and previously opened a non-Tribal Greektown Casino in Detroit, which filed for bankruptcy in 2008.
Kewadin was found liable by an Ingham County Circuit Court judge in January for both repaying $9m in loans to investors and repaying potential future profit loss caused by the unsuccessful casino ventures.
Attorney Andrew Broder said: “My clients wanted to get this over with. They’ve been fighting with Kewadin for years and years, and the appellate process could have taken several more.”
The US Department of the Interior declined the Tribe’s request to put casino land into trust, which is necessary for off-reservation casinos. The investor groups’ lawsuit said the Sault Ste. Marie Tribe falsely claimed it could acquire land and complete this process.
Kewadin Casinos General Counsel, Aaron Schlehuber, said in a statement, “Casino revenues contribute significantly toward the services the Sault Tribe provides to its members, including healthcare and cultural programs, so this settlement ensures the casino will continue to have the resources to maximize our operations and continue serving the community.”
An earlier $90m judgment against Kewadin had yet to be appealed. The specific damages were $61.2m for the ill-fated casino near Metro Airport and $29.5m for the casino meant for Lansing. Kewadin must pay investors up to $10m from the proceeds of its malpractice claim as part of the current settlement; but if the claim is unsuccessful, it will pay $5m.
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