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Illinois Gaming Board Plays it Safe with Emerald Casino

"`Are they going to do that? It's highly, highly unlikely,' said C. Barry Montgomery, an attorney representing Emerald. `The Gaming Board just wanted to have the option.'

"Emerald majority shareholders Kevin and Donald Flynn--whom the Gaming Board last year accused of wrongdoing in an attempt to revoke the company's casino license--have signed off on the deal with four other members of their family. Because the Flynns have a controlling interest in the company, the settlement is moving forward, with a third-party `sales agent' to be hired to market and sell the license, Montgomery said.

"Besides the Flynns, the Gaming Board has spots for 12 of the company's original investors to sign the pact. If they do not, that could be an indicator some investors do not like the deal and could sue.

"…The settlement calls for Emerald's 61 shareholders to get back only their original investments--a total of $62.8 million--in exchange for the Gaming Board stopping revocation proceedings that could have left them with nothing.

"Whatever gambling developer buys Emerald will incur at least $40.8 million in liabilities, including $187,743 to embattled accounting giant Arthur Andersen, which filed tax returns for Emerald, and $79,799 to Near North Insurance, whose politically connected owner Michael Segal is under indictment. The rest of that money would cover Emerald's legal fees, other professional services and loans.

"The buyer also would accept the cost of a lawsuit filed against Emerald by Rosemont leaders, who built a $45 million parking garage for what it thought would be Emerald's casino in their suburb. At the very least, Rosemont wants that money back…"

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