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Regulators: Casino Hiding Behind Bankruptcy14 February 2003ILLINOIS – As reported by the Chicago Tribune: "The bankrupt Emerald Casino on Thursday filed a reorganization plan that left state regulators concerned that investors in the stalled riverboat project may be trying to use the protection of federal bankruptcy court to back out of a deal to sell their assets at no profit. "Though Emerald is trying to find another casino firm to buy its gambling license, regulators said the plan could strip the Illinois Gaming Board of power to control the sale while making a significant dent in the hundreds of millions of dollars the state expects to reap from such a transaction. "…On Thursday, Emerald attorneys submitted to a bankruptcy judge a long-awaited reorganization plan for how the firm plans to divvy up its assets after selling the license. "But that plan only raised new concerns that Emerald shareholders might be trying to undermine a settlement they reached with the state last summer. That settlement requires them to sell the license while recouping no more than their original investment in the project. The excess funds from any sale were to go to the state. "The plan makes numerous references to shareholders receiving `interest' on their investments from a sale and contains technical language that allows them to divide profits. "But state sources familiar with the reorganization plan, who spoke on condition they not be identified, say the Emerald filing appears to be worded in a way that could cut out the state's share of sale proceeds and allow investors and their creditors to divvy up the entire sale price. "…Emerald bankruptcy attorney Joseph Schorer said the reorganization plan abides by last summer's deal with the board…" |