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Florida-based company sues tribe for $21 million

On Behalf of | Apr 5, 2017 | Business Torts |

When two parties disagree about the terms of their contract, their once seemingly perfect business transaction can turn into a full-on contract dispute. Contract disputes can be messy and cause all parties to lose time and money. According to a recent report, Osceola Blackwood Ivory Gaming Group, a Florida-based company responsible for managing Chukchansi Gold Resort & Casino, is filing a lawsuit against the Chukchansi tribe and the Chukchansi Economic Development Authority for the $21 million they allegedly owe.

The casino in question was shut down almost three years ago after a raid and disputes between Chukchansi factions. The tribe attempted to re-open the casino in 2015 and reached an agreement with Osceola regarding the management of the hotel and casino. Osceola helped negotiate a settlement with the National Indian Gaming Commission and secured funding for the re-opening. Chukchansi agreed to pay a percentage of net revenues for seven years. The agreement was later changed to reduce the percentage of net revenues for five years after Chukchansi secured financing without Osceola’s assistance.

Osceola claims that once the tribe approved the agreement, they waived its sovereign immunity, thereby allowing Osceola to sue for breach of contract, negligence and business code violations. The lawsuit claims that Osceola took a financial risk when they worked for Chukchansi for 13 months with the understanding that the tribe would submit the Osceola agreement to the gaming commission for approval. However, the tribe allegedly failed to properly submit the agreement thereby preventing Osceola from earning money according to the terms of the agreement. The lawsuit also states that the Resort and Casino is now successful thanks to the operation model set in place by Osceola. The $21 million requested is the money Osceola was set to earn according to the agreement and based on revenues earned. On the other hand, Chukchansi finds that Osceola was a vendor who was paid fairly for the services provided and that no further money is owed.

Once a contract is finalized, all parties are legally required to adhere to the terms of the agreement. Disputes like these can be complicated, but the courts will carefully consider all sides and determine how much money, if any, is owed to the parties.

Source: Sierra Star, “Resort management firm says Chukchansi tribe owes it $21 million for helping reopen casino,” Marc Benjamin, March 23, 2017