Judge approves plan to sell casino license

Maura Kelly

Thursday, May 20, 2004 | 9:04 a.m.

CHICAGO -- A bankruptcy court judge on Wednesday approved a plan that outlines how the bankrupt Emerald Casino Inc. can sell its license, even though Attorney General Lisa Madigan plans to try to revoke the license.

Now that U.S. Bankruptcy Judge Eugene Wedoff has approved Emerald's plan of reorganization, the next step is for the preferred buyer, Mississippi-based Isle of Capri Casinos Inc., to apply to the Illinois Gaming Board for a casino license. Once it applies, the Gaming Board will conduct a suitability review, which could take 90 days.

"I think that the proper goal for all constituencies is to try and do something constructive to move this forward to a positive resolution rather than engaging in destructive litigation or litigation strategies that doesn't advance the goal for anyone," Joseph Schorer, attorney for Emerald, said.

The Gaming Board selected Isle of Capri, which wants to build a casino in Rosemont, as the winning bidder for the Emerald license in March.

While Isle of Capri's suitability review goes on, Madigan intends to resume revocation hearings for the license held by Emerald. Madigan has said the Gaming Board ignored safeguards to ensure a fair bidding process, disregarded the recommendation of its professional staff and failed to explain how it was comfortable with Isle of Capri and Rosemont, where Mayor Donald Stephens has been accused of having mob connections -- allegations he denies -- and where the board opposed Emerald's plans for a casino.

Earlier this week, Wedoff said he did not have to consider whether Madigan will be successful in revoking the license as long as Isle of Capri is willing to accept the risk that the license could be revoked and end up back in the state's possession.

"This plan clearly avoids dealing with the most significant issue and that is whether they will have a license," Madigan spokeswoman Melissa Merz said. "Our only concern is going forward with the revocation and nothing has changed with that."

Madigan's office has given Emerald 60 days notice that it plans to resume the revocation hearing, but no date has been set.

After the revocation hearing is held, an administrative law judge then will make a recommendation to the Gaming Board on whether Emerald's license should be revoked. The Gaming Board must accept or reject the recommendation, and Madigan can appeal the decision to the Illinois Appellate Court if she disagrees.

Gaming Board Chairman Elzie Higginbottom has said the board disagrees with Madigan's decision to resume the revocation hearing. Higginbottom has said the board wants to proceed with the license sale process that Madigan negotiated last fall to resolve a dispute over the license.

The Gaming Board had been trying since 2001 to strip the license from Emerald because it said top company officials lied to regulators and some investors allegedly had ties to organized crime.