Williams Montgomery & John Successfully Defends Client Against Bankruptcy Trustee's Half Billion Dollar Claim

Posted: 10/02/2014 | Share This Post

Six Other Defendants Ordered To Pay $272,000,000 In Case Alleging Breach of Fiduciary Duty and Breach of Contract

Williams Montgomery & John represented one of seven former officers and directors in a case brought by the Trustee in bankruptcy for Emerald Casino, Inc. The Trustee alleged in a case brought in federal court in Chicago that the former officers and directors breached their fiduciary and contractual duties to Emerald, causing Emerald to lose its extremely valuable license to operate a casino in Rosemont, Illinois. The Trustee sought damages of $519 million dollars, plus punitive damages, against all of the defendants.

On September 30, 2014, after lengthy proceedings and the presentation of voluminous evidence, Judge Rebecca Pallmayer ruled that WMJ's client, now deceased Chicago attorney Peer Pedersen, was not liable to the bankruptcy estate. Judge Pallmayer further ruled that the other six defendants had breached their contractual duties to Emerald and ordered them to pay a total of $272,000,000 for causing Emerald to lose its license.

The Emerald Casino matter has been in the public eye for more than a dozen years following the 2001 decision of the Illinois Gaming Board to revoke Emerald's license amidst charges of misconduct leveled at Emerald's officers and directors. The Illinois Attorney General took an active and very public role in preventing Emerald from selling its license to a third party as part of a plan to pay off Emerald's debts. As a result, Emerald went into bankruptcy and the Trustee filed suit seeking to recover the value of the license from the individual defendants, who were without directors and officers insurance coverage.

C. Barry Montgomery, who led the team of WMJ lawyers representing Pedersen in this matter, said after the decision "This ruling demonstrates that justice can be achieved if one persists and aggressively pursues the law to do what is right. We obviously are very gratified for the decision, as well as the faith that our client demonstrated in choosing us to defend this very substantial claim."

In re Emerald Casino Inc.; Frances Gecker v. Donald F. Flynn, et al., No. 11 C 4714.