Former Casino Queen Employees Score Legal Win in Director Stock Suit

Former workers of Casino Queen Inc. notched a effectual victory before this hebdomad when the US District Court for the Southern District of Illinois rejected a movement to usher out a fit brought by the ex-staffers who lay claim former board members dumped shares of the gaming company’s equity into an employee retreat project at artificially high-pitched prices.

Defendants Charles VII Bidwell III and Timothy Ayn Rand believed the fit worn-out(a) the six-year statute of limitations lot onward past the Employee Retirement Income Security Act (ERISA). The courtyard didn’t concur, noting it rejected that title in a prior decision. Jesse James Koman — the other defendant — saw his motility for judging on the pleadings dismissed as well. Bidwell, Koman, and Rand are named as “alleged founders” of Illinois-based Casino Queen.

In Oct 2012, the aforementioned defendants and others created Casino Queen Holding Company (CQHC) for Casino Queen Inc. Two months later, they naturalized an employee gunstock ownership project designed to purchase the outstanding shares inwards the holding entity. Later inward December 2012, the employee inventory contrive borrowed $170 billion to purchase shares from CQH.

Plaintiffs allege that the 2012 Stock Purchase and 2013 Asset Sale were conducted in violation of the Defendant’s fiducial duties under ERISA. Specifically, as to the 2012 Stock Purchase, Plaintiffs aver that the ESOP paid significantly more than fair securities industry note value for the stock, which was the ESOP’s only asset,” according to a court filing.

The plaintiffs asseverate the toll the workers’ carry design paid for the equity was too high up based on the gaming company’s future tense financial forecasts.

Illinois Competition Hurt Casino Queen

The sound complaint notes that piece Casino Queen was initially a successful company, it was hindered by the speedy enlargement of the Land of Lincoln casino-gaming market, which is now 1 of the largest inward the land outside of Las Vegas.

The plaintiffs arrogate that from 2005 through 2011, Casino Queen attempted to sell itself on multiple occasions, but was unsuccessful. In 2012 and 2013, the founders proceeded to develop upwardly the company, including the sale of the Land of Lincoln riverboat cassino to Gaming and Leisure Properties (GLPI) for $140 million. Casino Queen in agreement(p) to letting the locus rear from GLPI for $210 jillion over 15 years though the estate had an assessed value of simply $12.1 one thousand thousand at the time.

“This transaction was made on behalf of the Board of Directors and CQH without compliments to how any of the employees would vote because at that time, the legal age of CHQ’s stockpile (which was at present owned by the ESOP) was unallocated and so voted on past the Co-Trustees who had the powerfulness to vote unallocated shares under the Plan,” according to the filing.

GLPI typically owns gaming tangible acres and leases those properties to operator clients. However, it also owns a small number of casinos, including Casino Queen, which today is operated past an employee direction group.

Casino Queen Defendants’ Flimsy Argument

The US District Court for the Southern District of Land of Lincoln takes issue with Bidwell’s and Rand’s claims the employee ownership project spent its ERISA entitlements because sise years lapsed. The court of justice points come out that at that place are exemptions for the time boundary inwards instances of dupery and concealment.

Additionally, counsel for the defendants attempted to debate that the statute of placidity is a jurisdictional matter, but other courts previously ruled that “statutes of limitations and serenity are both non-jurisdictional claims-processing rules.”

The IL royal court also noted that spell the plaintiffs didn’t expressly computer address the defendants’ release claims, they are entitled to to a greater extent breakthrough before the lawcourt rules on the question to dismiss. The plaintiffs make reason that hoax and/or hiding are at spiel in this case.

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