So Kevin Flynn, head of the investor group pushing an Emerald Casino proposal now on life support, says he wants a “fair return” for his family’s investment in the project.
That raises an interesting question: What, exactly, would be a fair return for investors who are accused of repeatedly lying to the Illinois Gaming Board and selling shares in their project to people with mob connections?
Here’s the fairest return: Zero. Nada. Zip.
These are investors whose alleged misdeeds are wrecking their own astonishingly good opportunity to make gazillions of dollars on the casino proposed for suburban Rosemont. The Illinois legislature even wrote a 1999 law to help these investors get a casino up and running–despite the fact that some of the principals had already run one Illinois casino into the ground.
In America when you invest wisely, you win big. But when you invest in companies that flop like dying catfish–especially when your actions allegedly cause your company’s demise–you lose your investment. You get no return.
Kevin Flynn said last week in an interview with the Tribune that his family has sunk roughly $40 million into the Emerald debacle and expects something substantial in return. “We’ve had significant risk capital invested for many years, and a fair return is what we’re looking for,” he said. If it doesn’t get it, the Flynns “will have to work to vindicate ourselves and our reputations in a court of law.”
Translation: If somebody won’t pay what we’re asking to get rid of us, then we’ll head to court to block anyone else from getting a license to open a casino.
What’s really going on here? Kevin & Co. only invested $10 million in Emerald. The rest of what they now claim is money they loaned to Emerald, plus interest. If the investors reach a settlement that lets, say, MGM Mirage buy out Emerald and open a casino, the Flynns’ loan no doubt would be paid off just like any other Emerald liability.
Maybe the Flynns are trying to redefine their investment from $10 million to $40 million because they’ve figured out the obvious: If they don’t reach a settlement to let someone buy them out, and if they can’t convince the courts to override an Illinois Gaming Board that last year said they are not fit to operate a casino, then they seriously risk getting zero return on their investment. Emerald will be virtually worthless–unable to open a casino, hopelessly mired in lawsuits, and probably unable to pay its debts, including the millions it owes . . . the Flynns.
The Flynns would be smart to make a deal with the Gaming Board to let a company such as MGM Mirage buy them out. That deal could be structured to give the state the $500 million or so that taxpayers–not Emerald investors–deserve. It would help if the Gaming Board would come out of hiding and state what deal it would accept.
Here’s the bottom line on any settlement of this mess: Investors still hoping to profit from Emerald’s alleged lies and mob ties are playing taxpayers, and the Gaming Board, for fools. In return for dropping their legal challenges, the Emerald investors should get not one penny more than they actually invested in Emerald.
If the investors want to hold out for more money, then let the courts decide what “fair return” Emerald really deserves. And Emerald’s officials and investors can try to argue that the Gaming Board’s evidence against them is all wrong.
A change of law could let Illinois auction off the license now in dispute if Emerald eventually does lose in court. Then the state would get all the proceeds. The Flynns and their fellow investors would get . . . zero, nada, zip.
