Failed developer of French Lick casino sues Cook exec

April 15, 2010

A partner of one of the original bidders to develop the French Lick casino and hotel project is suing the chairman of Bloomington-based Cook Group Inc., charging he violated federal racketeering laws by serving on an entity that recommended a team that included Bill Cook to develop the project.

Cook, the Bloomington billionaire who founded the medical device manufacturer Cook Group, formed Orange County Holdings LLC to develop the $382 million hotel and casino that opened in late 2006.

The lawsuit brought by Craig Adolph, a partner in Lost River Development LLC, which failed to receive the bid, represents the latest court battle involving a project plagued by messy legal disputes.

Adolph’s complaint charges that Cook Group Chairman Steve Ferguson and other members of the now-defunct Historic Hotel Preservation Commission violated the Racketeer Influenced and Corrupt Organization Act, or RICO, as well as the Indiana False Claim Act.

As chairman of Cook Group, Ferguson was personally involved in the negotiations to develop the casino and hotel while continuing to serve as a member of the HHPC, which had a role in naming a developer, the suit alleges.

“Ferguson and the other members of the HHPC … committed acts of official misconduct, conflict of interest, profiteering, and corrupt business influence—all offenses against the citizens of Indiana and against the public administration of the State in violation of Indiana criminal statutes,” the suit claims.

In a written statement issued Wednesday, Ferguson denied the allegations, saying “we intend to vehemently defend against these baseless attacks for events that occurred years ago.”

Ferguson said in the statement that Adolph has brought previous actions against him and others involving his failed attempt to develop the hotel and casino. The first suit was dismissed in 2005 and the second was settled in 2008 for $3,000.

Adolph filed his latest suit in January, but the complaint was not served on Ferguson and the others until April 9, after the state attorney general and the inspector general indicated they would not intervene until a court orders it.

Adolph is suing on behalf of the state, although it is not involved, and also names Ernest Yelton, executive director of the Indiana Gaming Commission, as a defendant.

Adolph charges that Yelton knew of the legal and ethical violations committed by Ferguson and the other members of the HHPC.

Yelton declined to comment Thursday morning on the allegations.

Adolph requests a jury trial and is asking for 25 percent of the amount the state might recover, if he is successful. Adolph, suing on behalf of the state, claims it is entitled to a civil penalty of up to three times the amount of damages sustained as a result of the defendants’ alleged violations.

In June 2007, Cook’s team bought out Indianapolis-based developer Lauth Property Group’s share in Orange County Holdings. That ended a contentious relationship that included accusations from Lauth that Cook’s project managers were incompetent and drove up costs on the casino and hotel project.

Lauth had aligned with Chicago-based Merit Management and Adolph under the Lost River group before partnering with Cook.


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