DuPage County Board Chairman Sues Riverboat Partners

Tuesday, Nov. 26, 1996 | 11:59 a.m.

The lawsuit comes at a time when the Empress investors are already involved in another legal battle, and the Joliet boat, one of the state's most profitable, is feeling competition from rivals in Illinois and Indiana.

Franzen's lawsuit, filed Friday in DuPage County Circuit Court, seeks to force the investors to live up to terms he claims they agreed to in June 1995: to pay him $266,666 for each of his 25 shares of the Empress Casino Joliet Corp. That amounts to 2.2 percent of the company.

Franzen also claims fellow investors owe him about $500,000 for his share of an earlier investor buyout.

Franzen's attorney, Myron N. Cherry, said Monday that Franzen and fellow investors reached the deal before the boat started to lose value as a result of competition from riverboats that have opened in Elgin and in Indiana.

"One hopes that the prospect of litigation will make people be more forthcoming," Cherry said. He said the investors already have reaped millions from operations of the boats and could easily afford to make good on the deal.

"This is peanuts for them," he said.

But Joel D. Rubin, an outside lawyer for the Joliet riverboat, said that "no final agreement was ever reached between the parties, be it oral or written."

Rubin said he couldn't comment about details of the suit because he had just received it and the boat owners were still deciding how to handle it.

The following Empress owners were named in the lawsuit: Charles P. Hammersmith Jr., chief executive officer of Elmhurst/Chicago Stone Co. in Elmhurst; Robert W. Kegley Sr., president of the Columbian Agency insurance firm in New Lenox; William J. Sabo, CEO of Empress; Thomas J. Lambrecht, president of T.J. Lambrecht Construction Co. in Joliet., and; Peter A. Ferro Jr., CEO of P.T. Ferro Construction Co. in Joliet.

The lawsuit also names the Empress Casino Joliet Corp., of which the defendants are directors and major shareholders.

The Illinois Gaming Board has to approve any shareholders in a gambling boat, so Franzen attempted to sell his shares "in-house."

The lawsuit alleges that Hammersmith negotiated a deal with Franzen on behalf of the other investors over the summer of 1995. But in early November, according to the lawsuit, Hammersmith called Franzen and said the investors had reneged on the agreement.

"I don't know what happened," the lawsuit quoted Hammersmith as saying. "They knew we had a deal but they just changed their minds."

Two other Empress Joliet investors, William J. McEnery and Edward T. McGowan, are not defendants. But they have sued in Indiana court to force their partners in the Empress Hammond Casino, a separate entity with largely the same investors, to give them board seats on the corporation operating the Indiana boat.

Franzen got a refund for his investment in the Indiana venture as part of the Illinois buy-out deal, his lawsuit says.

Julie Copeland, a spokeswoman for Franzen, referred a call for comment to his attorney, Cherry.