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Seminoles want financing deal nullified
By ASSOCIATED PRESS
Published May 24, 2006
WEST PALM BEACH - The Seminole Tribe of Florida is suing to nullify a contract covering the financing of two Hard Rock Hotel & Casinos, claiming the agreement is "illegal and unconscionable" and could cost the tribe billions. The tribe filed the complaint Monday in Broward County Circuit Court against Power Plant Entertainment, which developed and arranged financing for the popular casino complexes in Hollywood and Tampa. They opened in 2004. Power Plant, a subsidiary of Baltimore-based Cordish Co., said Tuesday the suit was a "less than honorable tactic" to gain leverage in a proposed buyout. The tribe has paid Power Plant more than $310-million in advisory fees through April and continues to make monthly payments of more than $18-million under the 10-year contract, according to the filing. "Power Plant's $2-billion advisory fee (over 10 years) bears no rational relationship to the services provided," the complaint states. Since the casinos opened, Power Plant has "provided no services to the tribe," according to the complaint. The Seminoles claim the payments amount to nearly 30 percent of the casinos' net profits. The tribe, which has about 3,000 members in Florida, also claims the contract is illegal because under tribal laws and the Indian Gaming Regulatory Act, gaming revenue cannot be paid to a third party. "Such abuse against a protected people cannot be tolerated, and the illegal contract must be declared invalid," the filing states. Power Plant spokeswoman Kimber Goodwin said in a Tuesday statement that "the Seminole Tribe has the most successful gaming enterprise in the United States." "The tribe is attempting to renege on its obligation to compensate PPE for taking all the financial risk that made the tribe's gaming success possible." The tribe's attorney, Alan J. Kluger, did not return calls seeking comment. Telephone messages left with the tribe also were not returned. Former tribal chairman James Billie negotiated the deal with Cordish in 2000. He was later removed from office, in part because of internal discord over the contract.
[Last modified May 24, 2006, 06:04:02]
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