{"id":263387,"date":"2023-03-08T14:03:05","date_gmt":"2023-03-08T20:03:05","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=263387"},"modified":"2023-03-10T14:21:57","modified_gmt":"2023-03-10T20:21:57","slug":"casino-queen-former-staffers-win-round-in-illinois-court","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/casino-queen-former-staffers-win-round-in-illinois-court\/","title":{"rendered":"Former Casino Queen Employees Score Legal Win in Director Stock Suit"},"content":{"rendered":"

Former workers of Casino Queen Inc. notched a legal victory earlier this week. That’s when the US District Court for the Southern District of Illinois rejected a motion to dismiss a suit brought by ex-staffers. They claim former board members dumped shares of the gaming company\u2019s equity into an employee retirement plan at artificially high prices.<\/p>\n

\"Casino
The Casino Queen riverboat casino in East St. Louis, Ill. Former employees scored a legal win in a stock suit against ex-board members. (Image: Belleville News-Democrat<\/em>)<\/figcaption><\/figure>\n

Defendants Charles Bidwell III and Timothy Rand believed the suit exhausted the six-year statute of limitations set forth by the Employee Retirement Income Security Act (ERISA). The court didn\u2019t concur, noting it rejected that claim in a prior decision. James Koman — the other defendant — also saw his motion for judgment on the pleadings dismissed. Bidwell, Koman, and Rand are named as \u201calleged founders\u201d of Illinois-based Casino Queen<\/a>.<\/p>\n

In October 2012, the aforementioned defendants and others created Casino Queen Holding Company (CQHC) for Casino Queen Inc. Two months later, they established an employee stock ownership plan designed to purchase the outstanding shares in the holding entity. Later in December 2012, the employee stock plan borrowed $170 million to purchase shares from CQH.<\/p>\n

Plaintiffs allege that the 2012 Stock Purchase and 2013 Asset Sale were conducted in violation of the Defendant’s fiduciary duties under ERISA. Specifically, as to the 2012 Stock Purchase, Plaintiffs allege that the ESOP paid significantly more than fair market value for the stock, which was the ESOP’s only asset,\u201d<\/strong> according to a court filing.<\/p><\/blockquote>\n

The plaintiffs assert the price the workers\u2019 stock plan paid for the equity was too high, based on the gaming company\u2019s future financial forecasts.<\/p>\n

Illinois Competition Hurt Casino Queen<\/h2>\n

The legal complaint notes that while Casino Queen was initially a successful company, it was hindered by the rapid expansion of the Illinois casino-gaming market, which is now one of the largest in the country outside of Las Vegas<\/a>.<\/p>\n

\n

The plaintiffs claim 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 break up the company, including the sale of the Illinois riverboat casino to Gaming and Leisure Properties (GLPI)<\/a> for $140 million. Casino Queen agreed to lease the venue back from GLPI for $210 million over 15 years though the estate had an assessed value of just $12.1 million at the time.<\/p>\n<\/div>\n

\u201cThis transaction was made on behalf of the Board of Directors and CQH without regard to how any of the employees would vote because at that time, the majority of CHQ’s stock (which was now owned by the ESOP) was unallocated, and thus voted on by the Co-Trustees who had the power to vote unallocated shares under the Plan,\u201d according to the filing.<\/p>\n

GLPI typically owns gaming real estate and leases those properties to operator clients. However, it also owns a small number of casinos, including Casino Queen, which today is operated by an employee management group.<\/p>\n

Casino Queen Defendants’ Argument<\/h2>\n

The US District Court for the Southern District of Illinois takes issue with Bidwell\u2019s and Rand\u2019s claims the employee ownership plan exhausted its ERISA entitlements because six years lapsed. The court points out that there are exemptions for the time limit in instances of fraud and concealment.<\/p>\n

Additionally, counsel for the defendants attempted to argue that the statute of repose is a jurisdictional matter. But other courts previously ruled that \u201cstatutes of limitations and repose are both non-jurisdictional claims-processing rules.\u201d<\/strong><\/p>\n

The Illinois court also noted that while the plaintiffs didn\u2019t expressly address the defendants’ dismissal claims, they are entitled to more discovery before the court rules on the motion to dismiss. The plaintiffs do argue that fraud and\/or concealment are at play in this case.<\/p>\n","protected":false},"excerpt":{"rendered":"

Former workers of Casino Queen Inc. notched a legal victory earlier this week. That’s when the US District Court for the Southern District of Illinois rejected a motion to dismiss a suit brought by ex-staffers. They claim former board members dumped shares of the gaming company\u2019s equity into an employee retirement plan at artificially high […]<\/p>\n","protected":false},"author":46,"featured_media":263388,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[10,33810,60],"tags":[81903,81898,81928],"acf":[],"yoast_head":"\nCasino Queen Former Staffers Win Round In Illinois Court<\/title>\n<meta name=\"description\" content=\"Former Casino Queen staffers win legal victory as court refuses defendants' motion to dismiss.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.casino.org\/news\/casino-queen-former-staffers-win-round-in-illinois-court\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Casino Queen Former Staffers Win Round In Illinois Court\" \/>\n<meta property=\"og:description\" content=\"Former Casino Queen staffers win legal victory as court refuses defendants' motion to dismiss.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/casino-queen-former-staffers-win-round-in-illinois-court\/\" \/>\n<meta property=\"og:site_name\" content=\"Casino.org\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Casino.OrgNews\" \/>\n<meta property=\"article:published_time\" content=\"2023-03-08T20:03:05+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-03-10T20:21:57+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/03\/cq2.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1140\" \/>\n\t<meta property=\"og:image:height\" content=\"736\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Todd Shriber\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@etfgodfather\" \/>\n<meta name=\"twitter:site\" content=\"@Casino_Org\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Todd Shriber\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.casino.org\/news\/casino-queen-former-staffers-win-round-in-illinois-court\/\",\"url\":\"https:\/\/www.casino.org\/news\/casino-queen-former-staffers-win-round-in-illinois-court\/\",\"name\":\"Casino Queen Former Staffers Win Round In Illinois Court\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/casino-queen-former-staffers-win-round-in-illinois-court\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/casino-queen-former-staffers-win-round-in-illinois-court\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/03\/cq2.jpg\",\"datePublished\":\"2023-03-08T20:03:05+00:00\",\"dateModified\":\"2023-03-10T20:21:57+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85\"},\"description\":\"Former Casino Queen staffers win legal victory as court refuses defendants' motion to dismiss.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/casino-queen-former-staffers-win-round-in-illinois-court\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/casino-queen-former-staffers-win-round-in-illinois-court\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/casino-queen-former-staffers-win-round-in-illinois-court\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/03\/cq2.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/03\/cq2.jpg\",\"width\":1140,\"height\":736,\"caption\":\"The Casino Queen riverboat casino in East St. Louis, Ill. 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