Chicago Sun-Times: A lot of green is at stake in the Emerald Casino license battle

There's an old saying in gambling: Don't chase your losses.

Langdon Neal of Neal & Leroy last week argued that Emerald Casino Inc.'s lawyer Robert Clifford is doing just that. Neal wants Clifford to cease fighting to allow Emerald to sell its license to Isle of Capri Casinos Inc. Instead, Neal thinks it's time to move on, and Emerald should sell to the backup bidder: Midwest Gaming.

"It appears to be the most logical conclusion -- that the backup bidder would be the simplest way," Neal said.

Neal represents 18 minority and female investors in Emerald, who collectively own 18.5 percent of the company. Last week, Neal asked federal Bankruptcy Judge Eugene Wedoff to put Emerald's license in the hands of a trustee. According to Neal, Emerald's and Clifford's strategy of endlessly litigating ensures the license will be revoked before the company has the chance to sell it. The investors will be left with nothing, he argues.

The Emerald Casino saga is a complicated tale, the legal equivalent of a Rubik's cube. It has also become a sort of Lawyers' Full Employment Act, with more than 20 law firms involved, and nine separate lawsuits pending.

In brief, state officials in 2001 blocked Emerald's bid to locate its casino in Rosemont, alleging the casino owners misled the Illinois Gaming Board and that some investors had ties to organized crime. That set off a chain of events that sent Emerald into bankruptcy. Last year, the IGB picked Isle of Capri as the winning bidder for Emerald's tentatively revoked license. But Attorney General Lisa Madigan cried foul because Isle, too, planned to build its casino in Rosemont, a town she alleged is tainted by mob ties.

Clifford, a renowned trial lawyer and friend of Gov. Blagojevich, took command of Emerald's legal strategy in May. He is fighting a multifront battle, trying to keep the Illinois Gaming Board from taking away Emerald's license so that it can sell the license to Isle of Capri.

Clifford represents the bulk of Emerald's investors, who include former Waste Management executive Donald Flynn. State law required that minority and women investors make up 20 percent of the casino's ownership. Those stakeholders, who include Walter Payton's widow, Connie, are Neal's clients. (Chaz Ebert, wife of Chicago Sun-Times film critic Roger Ebert, is also among the minority investors, but she did not join in Neal's motion.)

Clifford is determined to keep fighting the IGB, even though he has concluded its current license revocation proceeding is "an inherently unfair process."

He dismissed the idea of selling the license to Midwest Gaming, which wants to put the casino in Des Plaines.

"It will spawn another endless parade of litigation," he said. "Because Rosemont, whether or not anyone likes it, has some rights here."

Midwest Gaming is mostly owned by Chicago real estate mogul Neil Bluhm. The company bid $476 million for the license, compared with Isle of Capri's $518 million.

Clifford's fee could exceed $100 million. He declined to comment on the specifics of the deal. "That is a red herring," he said. "If we could settle this thing tomorrow, and deal with the Rosemont claim, I would forego all aspects of the contingency agreement that seems to be of such interest to people."

At a bankruptcy court hearing Thursday, Wedoff said it was too early to consider whether the plan to sell the license to Isle of Capri ought to be abandoned. The outcome of the license revocation, being supervised by Judge Abner Mikva, was still uncertain. But when Mikva makes his decision, Emerald might not have a license to sell.