In Michigan, Ingham County Circuit Court Chief Judge Joyce Draganchuck gave the Sault Ste. Marie Tribe of Chippewa Indians a February 15 deadline to figure out how to pay two development companies nearly $89 million owed for unbuilt casinos. Draganchuck also prohibited the tribe from disposing assets, noting it can’t be trusted to not violate court orders.
Earlier this month, Draganchuck ruled the tribe’s gaming enterprise, Kewadin Casinos Gaming Authority, must pay $88.8 million in breach of contract and fraudulent misrepresentation damages to JLLJ Development LLC and Lansing Future Development II. Investors and developers in the projects initially loaned the gaming authority $8.8 million to advance casino projects, based on the tribe’s claims that the off-reservation land would be taken into federal trust for temporary and permanent casinos. However, court filings indicated the tribe never submitted additional documents to the U.S. Bureau of Indian Affairs to have the off-reservation land taken into trust.
The $88.8 million payment includes $9 million in loans from the developers, interest and loss of potential future profits and $60 million for an unbuilt casino in Huron Township near Metro Airport and $28.8 million for an unbuilt casino in Lansing. The tribe disputed Draganchuck’s ruling, citing a “non-recourse provision that only allowed for recovery if there were profits from the casino that never came to be,” according to a court filing.
Lawyers for the developers discovered the Sault tribe passed a resolution in September to shield assets from the judgment.
In Draganchuck’s absence, Ingham County Circuit Court Judge James Jamo signed the first restraining order. But Draganchuck’s said, “I would have signed it absolutely had I been here. The resolution was jaw-dropping and fully justifies the ex parte TRL.”
Attorneys for the tribe and the developers have until 2:30 p.m., Wednesday, February 15 to create a preliminary injunction that satisfies federal tribal laws and the developers’ judgment. But Andrew Broder of Payne, one of the attorneys who sued the tribe after the projects failed, argued the tribe cannot be trusted without a restraining order.
