Sault Tribe Given Two Weeks To Settle $89M Fine With Investors Of Failed Michigan Casinos

On February 1, a judge in Ingham County in Michigan granted Saul Ste. Marie Tribe of Chippewa Indians two weeks to plan the details of how the $89 million fine will be solved with two Michigan development firms and also prohibited the tribe from getting rid of the properties.

Debts of the tribe:

The Sault Tribe is to pay $9 million in loan debt, $60 million for unfinished casino construction in Huron Township close to the Metro Airport and $28.8 million for unfinished casino construction in Lansing to development firms New Boston and Lansing.

Referring to the total debt, Ingham County Circuit Court Chief Judge Joyce Draganchuck said: “The tribe’s gaming hand, Kewadin Casinos Gaming Authority, has to pay $88.8 million to the New Boston and Lansing development companies.”

The judge also issued again a two-week provisional restraining order and added: “The tribe cannot be trusted to not violate court orders.”

Before her, former judge, James Jamo, issued the first restraining order in Judge Draganchuck’s absence.

In this regard, she said: “I did not sign the TRL, I wasn’t here, another judge signed it in my absence, (but) I fully endorsed it. I would have signed it absolutely had I been here. The resolution was jaw-dropping and fully justifies the ex parte TRL.”

Challenging the verdict:

However, the Michigan tribe is challenging the verdict because of “a non-recourse provision that only allowed for recovery if there were profits from the casino that never came to be,” according to the tribe’s attorneys and their report in a court filling.

The tribe benefits from the fact that in September of last year they passed a resolution to protect their properties from judgement. That fact was revealed by lawyers of JLLJ Development LLC and Lansing Future.

Commenting on the resolution, Judge Draganchuck said: “The resolution is jaw-dropping.”

Court decision:

Commenting on the court decision regarding the Saul Tribe, Judge Draganchuck said: “Attorneys for the tribe and the developers have until 2:30 p.m. on Feb. 15 to create a preliminary injunction that both satisfies federal tribal laws and the developers’ judgment. Absent an agreement, I will hold another hearing and issue on my own.

“If during that time period, counsel are able to come up with a mutually-agreeable injunction that will protect the tribe’s ability to function as a tribe and will also protect the plaintiffs to allow them to be able, at some point, to collect a judgment, then you, of course, will do that and I won’t see you on the 15th.”

One of the attorneys who initiated the action against the Sault tribe after the failure of the casino projects, Andrew Broder of Payne, Broder and Fossee, PC, claimed that “the tribe cannot be trusted without a restraining order.”

He added: “I am aware of a tribal board of directors’ meeting coming up on Feb. 7 but even if a resolution is passed to reverse the September 2022 document, it doesn’t stop the tribe from passing another down the line to insulate their assets.”

Ongoing legal battles:

The latest restraining order is part of ongoing legal battles between the tribe and two developers since 2021. Basically, the two developers filed a lawsuit against the tribe for not paying them for the loss of the money they invested and how much. Their main goal was to recover a total of $124 million in investments and profits.

Not a single casino project came to fruition after a five-year state lawsuit. The U.S. Department of the Interior denied the tribe’s request to own the land, which is required for all off-reservation ventures.

After the Sault Tribe appealed the denial, U.S. District Court then-Chief Judge Robert Jonker decided in favor of the Department of the Interior.

However, Barnett became the tribe’s attorney on January 13.

In this regard, Judge Draganchuck said: “I don’t know if the tribe’s previous lawyers told them to disobey court orders, or if tribal officials made those decisions.

“When people tell you who they are, believe them; and we have a long history here. I laid it out in my findings and conclusion of law about the tribe’s deliberate disobedience of court orders and defiance of court orders. I don’t know if we blame it on the tribe, the client or the attorney.”