Lauth Property Group may have ended its contentious battle with Bloomington billionaire Bill Cook this week to develop the $382 million French Lick casino and hotel project, but its real battle involving the Orange County resort may have just begun.
The Indianapolis-based developer still faces a breach-of-contract claim seeking $100 million by Chicago-based Merit Management, a hotel and casino developer. Merit and Lauth initially teamed up to develop the French Lick project but failed to obtain a gaming license. Lauth later paired with Cook.
Last month, Hamilton County Superior Judge Stephen Nation ruled that a contract existed between Lauth and Merit, clearing the way for a trial in Merit's pursuit of $100 million in damages against Lauth.
On Wednesday, Cook's team bought out Lauth's share in Orange County Holdings LLC, ending their contentious relationship that included accusations from Lauth that Cook's project managers were incompetent and drove up costs of the casino and hotel project.
Last year, Lauth offered to buy out Cook's share in the project for nearly $200 million. Cook countered with a mere $5 million.
Whatever the amount, Merit may well have its eyes on claiming it under its litigation, said Ed Feigenbaum, publisher of Indiana Gaming Insight and Indiana Legislative Insight. "Lauth has added problems in that it's not resolved the Merit [litigation]," he said.
Some observers say Lauth likely walked away with a share of Orange County Holdings closer to the figure for which Cook offered to buy out Lauth. If so, that could be useful in limiting damages that could be collected by Merit if it were to prevail-so long as Lauth cut a deal with Cook that could provide the developer with future revenues, said one source who asked to not be identified.
Lauth officials aren't talking, other than to say the developer's goal "to develop and construct the Midwest's premier resort destination" was achieved, said spokesman Marc Lotter.
Edwin Broecker, a Sommer & Barnard attorney who represents Cook's Orange County group, said the Lauth settlement is a plus for the project.
"This was a great opportunity to have a single focus and vision for the project and how to build on the early momentum that's been there," Broecker said.
Remaining to be completed, Broecker said, is the resort's Pete Dye-designed golf course, which should be ready for play as early as next spring.
The Lauth-Cook partnership appeared problematic from the start, said Feigenbaum, noting the good will Cook has in Southern Indiana.
"It seems like Lauth essentially wanted out since Day One, when they realized they really weren't being treated as a 50-percent partner."