A US appeals court ruled in favor of resort operator EPR Resorts, formerly known as EPT Concord. The company is in charge of the construction and operation of the Montreign Resort in the Adelaar area in New York that would host the Montreign Casino. The court ruling was against real estate developer Louis Cappelli and Concord Associates.
Back in 1999, the developer’s Concord Associates purchased a 1,600-acre site aiming to build a casino resort. In 2007, the entity needed capital of $162 million, which it borrowed from the former EPT. In order to secure its loan, it used the greater part of its property as collateral.
Although Concord Associates failed to repay its loan, it could proceed with its plan for the launch of a casino but on a smaller slice of the previously purchased site. Yet, it had to fund its development by means of a master credit agreement, under which any construction loan should have been guaranteed by Mr. Cappelli himself.
Concord Associates failed in this, too, and in 2011 proposed to issue a high-yield bond totaling $395 million. EPT refused and Concord Associates brought the matter to court arguing that their proposal complied with the agreement between the two entities.
EPT, on the other hand, introduced its own plans for the establishment of a casino resort. The gambling facility is to be run by gambling operator Empire Resorts.
Apart from its ruling on the legal dispute between the two entities, the appeals court also ruled that Acting Supreme Court Justice Frank LaBuda should have withdrawn from the case as his wife – county Legislator Kathy LaBuda, had made public statements on the matter.
Mrs. LaBuda had openly supported EPT and its project. Judge LaBuda was asked to recuse himself but he refused and eventually ruled in favor of the afore-mentioned operator. He wrote that any decision in favor of Concord Associates would not have been in public interest and would have been considered violation of the state gambling law.
Quite expectedly, his ruling was questioned by people and this is why the appeals court decided that he should have withdrawn from the case. Yet, that same court also backed EPT, claiming that Concord Associates had failed to meet the terms of the contract, which were unambiguous and clear enough.
