Cordish sues Indiana partners, Jockey Club for $600 million

Suit focuses on disputed fees from Indiana casino

February 15, 2011|By Nicole Fuller, The Baltimore Sun

The Cordish Cos. is suing its former casino business partners in Indiana and the Maryland Jockey Club for $600 million, claiming they conspired to defame Cordish in an effort to prevent it from developing what could be the state's most lucrative slots parlor at Arundel Mills mall.

The wide-ranging suit claims defamation, business interference and invasion of privacy and alleges a conspiracy to "deliberately and maliciously" publish false information about Cordish. The Baltimore-based development company claims its reputation was sullied in the real estate and gaming industries and it was forced to "expend considerable sums" to counter the "false and defamatory" claims.

The suit, which names as defendants the Maryland Jockey Club, Penn National Gaming, MI Developments, the owners and trustees of Indiana Downs and MID Chairman Frank Stronach, focuses on a business dispute between Cordish and the chairman of the Indiana Live! casino it built and managed.

The suit also claims that the Jockey Club and its owners made false claims about the Indiana dispute as political fodder in the runup to a ballot referendum on slots in Anne Arundel County.

"This lawsuit is aimed at righting a terrible wrong perpetrated against the Cordish Cos. in their legitimate efforts to not only put a casino in Anne Arundel County in accordance with the law but their efforts around the county to operate spectacularly run gaming facilities," said Cordish attorney William H. "Billy" Murphy, Jr. "We don't do business like this in Maryland."

In a statement, Maryland Jockey Club President Tom Chuckas called the suit "baseless and full of unsupported speculation and innuendo."

Its parent company, MID, also released a statement, calling the suit "meritless."

"MJC has previously successfully defended other litigation brought by Cordish and MID believes this Complaint to be similarly meritless. In the Complaint, Cordish additionally alleges certain claims respecting Indiana business matters, of which MID has no knowledge or information."

Among the chief claims in the suit is the allegation that Ross J. Mangano, chairman of Indiana Downs, used Cordish's fight last year to bring slots to Arundel Mills mall as leverage to prevent Cordish from collecting a disputed fee for managing the Indiana casino. The management agreement between Cordish and Indiana Downs was terminated last year, though the two companies remain in arbitration over unresolved issues.

In an e-mail contained within the suit, sent from Mangano to David Cordish and his son and business associate Jonathan Cordish last June, Mangano suggests that business issues between the two could have an effect on Cordish's efforts to bring gaming to Arundel Mills.

In the e-mail, he said he would "immediately terminate your management contract" if Cordish moved to recoup disputed fees.

"I'm sure it would be [a] positive event to the people of Anne Arundel, Maryland who oppose your casino, stating your management company is very inept and not good for the city from a gaming standpoint."

Efforts to reach Mangano by e-mail and phone were unsuccessful Tuesday. Douglas R. Brown, an attorney listed as Indiana Downs' registered agent, said in an e-mail that "we are not able to comment on this at this time."

When Cordish wouldn't relinquish its right to payment of its management fee, the suit claims, Mangano terminated the management agreement with Cordish. Subsequently, Cordish claims, Mangano and the trustees, with the "assistance" and "encouragement" of the Jockey Club, Penn National and MID, sought to publicize the termination. The suit cites an announcement in the company's second-quarter 2010 financial report and a conference call with Indiana Downs and bondholders and gaming analysts last August.

"Mangano's sole purpose was to create false and unfavorable publicity for Cordish in connection with the referendum vote pending in Maryland," the suit says about the conference call.

It also points to television commercials and mailers during last year's ballot question on slots that alleged mismanagement on the part of the Indiana casino.

The suit further claims that the Maryland Jockey Club, and its owners — Penn National and MID, with Stronach as its chairman — "encouraged, aided abetted and participated" with Mangano and the trusts "in their effort to make good on their threats" of alleged false statements of incompetence and mismanagement by Cordish.

The suit comes just days after the Cordish Cos. was forced to put the brakes on construction of its planned 4,750-machine slots parlor at Arundel Mills. The company previously fought a long legal battle against the Maryland Jockey Club, which sought to steer Anne Arundel's single slots license to its Laurel Park race course.

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