Companies in severe financial distress often seek refuge in bankruptcy. However, while bankruptcy may offer the company-debtor protection against claims of unpaid wages, it does not insulate individual officers, directors and managers from personal liability under the Fair Labor Standards Act ("FLSA") for such claims. InBoucher v.

Insiders who loot their corporate entities often dispose of the cash proceeds in transactions with third parties. A recent Seventh Circuit opinion, In re Equipment Acquisition Resources, Inc., 14-2174 (7th Cir. October 13, 2015) (the “EAR Opinion”)addresses a common risk faced by a third party who receives cash from the defrauding insider.

Since the passage of the Indian Gaming Regulatory Act in 1988, casinos owned by Native American tribes have proliferated across tribal lands and have generated billions of dollars in revenue annually.  While casinos such as Mohegan Sun and Foxwoods are among the largest and well-known tribal casinos, over 60 exist in the State of California, where many dozen small properties have sprung up throughout the state in recent years, in some cases built in part with the proceeds of high-yield bond debt.  This recent growth spurt juxtaposed with the prolonged downturn in consumer spending

Introduction

The current economic recession has, not surprisingly, led to a significant downturn in the domestic gaming industry. During 2008, revenue growth in the U.S. gaming industry turned negative for the first time in four years. Data for the first quarter of 2009 indicate that the monthly gaming revenues of casinos in Las Vegas and Atlantic City declined more than 15% as compared to the first quarter of last year.1 Public gaming company stock prices are down more than 80% on average, and many gaming companies have postponed or canceled development projects.

A divided panel of the U.S. Court of Appeals for the Third Circuit stayed the part of a bankruptcy court’s sale order that would have “stripped” a commercial tenant’s lease from the casino property being sold to a third party. In re Revel AC, Inc., 2015 WL 5711358 (3d Cir. Sept. 30, 2015) (2-1).

On February 28, 2017, Judge Sontchi of the Delaware Bankruptcy Court issued an opinion (the “Opinion”) in the Money Center of America bankruptcy – Bankr. D. Del., Case 14-10603. The Opinion is available here. This Opinion decided two separate, but similar, motions to dismiss filed by 2 entities owned by federally recognized Indian Tribes and sovereign nations (the “Tribes”).