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Fort Wayne Journal
Gazette
http://www.fortwayne.com/mld/fortwayne/news/local/17318946.htm
Sun,
Jun. 03, 2007
Judge rules contract existed in casino
case
Associated Press
NOBLESVILLE – A judge has ruled
that a contract existed between an Orange County casino
partner and a company that accuses it of negotiating secretly
to win the casino contract.
The ruling by Hamilton
Superior Judge Stephen R. Nation in Noblesville could pave the
way for a trial over the French Lick Resort Casino’s
operating contract.
Nation ruled on May 22 that a
contract had in fact had existed between Lauth Indiana Resort
& Casino and Merit Management, which joined together to
form Lost River Development in a bid for the Orange County
casino license.
His ruling rejected Lauth’s request
for summary judgment on the contract issue.
Merit
Management is suing Lauth, alleging that the
Indianapolis-based resort and casino firm entered into secret
negotiations with Bloomington-based Cook Inc. to cut out Merit
Management in their attempts to win a contract for the casino
from the Indiana Gaming Commission.
Lauth general
counsel Vernon Back said Lauth never questioned if it had a
contract with Merit at one time.
“That agreement was
terminated,” Back said. “There was nothing in the
agreement that says if there’s a second partner, that we had
to reapply with (Merit).”
Back said Lauth will file
many more summary judgments.
“It’s really of no
effect,” he said of the ruling. “It just means that count
wasn’t dismissed.”
Merit Management’s attorney,
Gary Grasso, said his client had entered into an agreement
with Lauth with the intentions of jointly applying for a
gaming contract in Orange County. That contract initially was
granted to Donald Trump’s casino operation.
But after
concerns surfaced over Trump’s financial situation, the
Indiana Gaming Commission told the fellow applicants for the
contract – including Lost River Development – that the
contract might end up in their hands.
In March 2005,
Indiana Gaming Commission Executive Director Ernie Yelton
recommended the commission repeal its recommendation to award
the contract to Trump.
At that point, Merit’s lawsuit
alleges, Lauth entered into secret negotiations with Cook Inc.
to put together a bid for the contract.
“After the
commission pulled the plug on Trump in March of ’05, Lauth
continued to deal with us as if we were going to be a
partner,” Grasso said from his Chicago office Friday.
“At
this point, the court has found there was a written contract
between Lauth and Merit Management. Therefore, our position is
that (Lauth) was not free to deal with Cook, and not tell us
about their intentions to abandon us and go elsewhere.”
Merit
Management is seeking $100 million from Lauth Indiana Resorts
& Casinos and its three principals, Robert Lauth Jr.,
Gregory Gurnik and Vernon Back.
A second, separate
lawsuit still is pending between Lauth and Cook.
Lauth
alleges that Cook was overly involved in the construction of
the $382 million French Lick Resort and Casino, while Cook has
responded through court documents that Lauth used the company
essentially to help bankroll the project.
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