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A settlement agreement was reached last week between the Kewadin Casinos Gaming Authority and its former development partner that will reduce a recent judgment from $88 million down to a maximum of $35 million.
Under the agreement, announced on Thursday, Kewadin Casinos will make a guaranteed payment to JLLJ Development and Lansing Future Development II of $25 million by Wednesday.
At issue were proposed casino projects in Lansing and Romulus that never came to fruition due to unsuccessful bids to gain approval from the U.S. Department of the Interior to bring the proposed casino land into trust. Such an action is required for a tribe to operate a casino outside of their reservation land.
The agreement also stipulates that if Kewadin is successful in a malpractice claim against its former legal counsel, it will additionally pay its former development partners up to an $10 million. If, however, that lawsuit is unsuccessful, Kewadin will instead pay an extra $5 million.
The law firm, Patterson, Earnhart, Real Bird & Wilson LLP, had served as general counsel to the Kewadin Casinos and Sault Tribe since June 2020. According to a press release, the firm had previously indicated to casino leadership that it was qualified to handle the case.
Kewadin Casinos General Counsel Aaron Schlehuber said the firm failed to properly defend Kewadin in the litigation.
“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,” he said.
A request for comment was made to the law firm but was not returned.
The settlement agreement represents a nearly 75% reduction from the $88 million in damages Ingham County Judge Joyce Draganchuk had previously ordered Kewadin to pay its former development partners. It also avoids what would likely have been a lengthy appeals process and significant legal expenses, including interest, that would have been incurred.
“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,” Schlehuber said. “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.”
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