Appeals court sides with Lauth in casino suit

Indianapolis developer Lauth Property Group didn’t breach a joint venture contract with a Chicago company when Lauth abandoned the joint venture and formed a partnership with a different company to build a hotel and casino in the southern Indiana town of French Lick, the Indiana Court of Appeals ruled today.

The state’s second-highest appeals court unanimously overturned a ruling from a Hamilton County judge that determined Lauth had violated the agreement to build the $382 million project. The appeals court sent the case back to Hamilton Superior Judge Steven Nation for further proceedings.

It’s the first time the appellate court has ruled on the issue, spelling out exactly when joint ventures end if the agreements don’t have a specific termination date.

Chicago-based Merit Management claimed Lauth broke their joint venture when Lauth formed Orange County Holdings LLC with Bloomington billionaire Bill Cook. Merit sought $100 million in damages.

Lauth turned to Cook after its proposal with Merit was rejected by the Indiana Gaming Commission in favor of another proposal submitted by Trump Indiana Casino Management, which was backed by real estate developer Donald Trump.

However, the Trump project fell through, opening the door for Orange County Holdings. The casino opened in November 2006.

Lauth’s partnership with Merit ended when the commission chose the Trump proposal, the appeals court ruled. Thus, Lauth was free to form a new partnership.

Lauth’s relationship with Cook turned frosty, too.

In June last year, Cook’s team bought out Lauth’s share of Orange County Holdings after Lauth accused Cook’s project managers of incompetence and driving up costs of the project.

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