A federal judge in Pennsylvania Tuesday agreed with a bankruptcy judge’s ruling to nix a bid by the developer of a Foxwoods casino project in Philadelphia that failed. The bankrupt developer was seeking to recoup $50 million from a casino licensing fee it paid to the state.
U.S. District Judge Joseph Leeson Jr. agreed that U.S. Bankruptcy Judge Magdeline D. Coleman had come to the correct conclusion that the Pennsylvania Gaming Control Board’s action did not qualify as a fraudulent transfer, according to an article posted on the Law360 website.
Read more: Bankruptcy Lawyer, Philadelphia PA
“In its appeal of Judge Coleman’s April 2016 ruling, Philadelphia Entertainment & Development Partners LP, which had its casino license revoked by the state in 2010, said the judge misconstrued its fraudulent transfer claims as a challenge to the revocation of the license itself.”
Leeson on Tuesday cited the transcript from the bankruptcy court hearing that it was a fraudulent transfer because it was revoked, and nothing was received in return. He goes on to explain that the bankruptcy court did not misunderstand the claims.
“PEDP in 2006 landed one of two casino licenses earmarked for the city of Philadelphia, for a proposed Foxwoods casino along the Delaware River. But the license was revoked in 2010, after the Gaming Control Board found that it had halted construction and failed to maintain financial suitability,” the article reads.
It was after the company lost an appeal of the decision that it filed for bankruptcy and launched an adversary proceeding against the state in May 2014.
The claims dealing with the revocation of the license cannot go before a federal court due to the Rooker-Feldman doctrine, which bars federal courts from reviewing state court rulings. Tuesday’s affirmation confirmed this.
“We have reviewed and were disappointed re: the opinion; we think it is wrong in its application of the Rooker-Feldman doctrine,” Fred Jacoby of Cozen O’Connor, who represents PEDP, said in an email. “We have recommended to our clients that they pursue appellate review in the Third Circuit Court of Appeals.”
The post Federal judge: No fraudulent transfer in Foxwoods casino project appeared first on Young, Marr & Associates.
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