- »Ottawa Senators Owner Files Defense in Casino Case
Ottawa Senators Owner Files Defense in Casino Case
When the Mohegan Sun Casino in Connecticut sued Ottawa Senators owner Eugene Melnyk for outstanding casino debts, the allegations were fairly simple.
As Melnyk begins to mount his defense in the case, however, it gets much more complicated.
Lawsuit Filed in July
On July 9, Mohegan Sun Casino, located in Connecticut in the United States, filed a lawsuit in the New London Superior Court in Connecticut. The defendant was Eugene Melnyk.
The owner of the National Hockey League’s Ottawa Senators team since 2003 also bought the stadium in 2003, Melnyk has owned other companies in the past as well. He founded and owned a medical publishing company and a specialty pharmaceutical company, the latter of which ran into quite a bit of legal trouble with trading and reporting issues.
The billionaire is still a Canadian citizen but currently resides in Barbados.
And sometimes, Melnyk likes to gamble with that money. It appeared that he had filed an application back in 2004 for $1 million in casino credit, which had been granted.
He was at Mohegan Sun on St. Patrick’s Day weekend in March 2017 when he cashed five bank drafts for a total of $900,000. When the casino tried to cash those checks, the Toronto-based bank would not honor them.
Melnyk has since refused to pay the money owed.
So, Mohegan Sun sued him for $900,000 plus damages and fees associated with the lawsuit and delayed payments.
Attorneys for Melnyk released a statement to the court in defense of their client.
According to CBC, his claim was that the casino “failed and refused defendant’s instruction to cash out defendant’s chips during a gambling session at a time when defendant was winning significant amounts of money, but induced defendant to continue to gamble , during which time plaintiff’s conduct caused defendant to incur substantial losses.”
In addition to the allegation that Mohegan Sun employees goaded him into playing more and not cashing out his winning chips, Melnyk claimed that the casino didn’t try to cash his bank drafts for more than five months. He said the delay was “unreasonable and prejudicial to the defendant and caused the drafts to become stale.”
Breaking It Down
Melnyk’s defense team was then asked to challenge the plaintiff to change its complaint, per CBC.
Instead of one single $900,000 debt, he wanted each draft to be treated separately. That meant Melnyk wanted a complaint for each of the $200,000 bank drafts and then the $100,000 bank draft.
His attorneys stated that each draft may have been made under different circumstances. The time of each of the five drafts and reasons for them might be different. Therefore, Melnyk wants the chance to plead differently to some of the drafts if he chooses to do so.
The court agreed, and the complaints were separated.
Melnyk is no stranger to the legal system.
He is famous in some circles for his battle with the United States Securities and Exchange Commission (SEC) in 2007. The US government agency sued Malnyk for accounting fraud, alleging that he overstated earnings and hid losses in his Biovail company to deceive investors.
Melnyk left the company, which settled with the SEC for $10 million.
Just last month, Flightpath Charter Airways sued Melnyk for nearly $700,000 in unpaid fees for operating, maintaining, and storing his business jet. Technically, the plane belongs to his Clean Beauty Collective company.
That company did authorize payment after the lawsuit was filed, but the judge ordered that the money be held until the case is heard and settled.
Melnyk Sues, Too
Some might remember the lawsuit filed nearly one year ago in Ottawa.
Melnyk sued his partners in the LeBreton Flats redevelopment project. It was a part of the larger plan to move the Ottawa Senators to the downtown area.
However, Melnyk claimed that Trinity Development Group and founder John Ruddy, along with several others, began developing a property directly next to the LeBreton Flats location. It created an “egregious conflict of interest.”
Capital Sports Management Inc. (CSMI), Melnyk’s company for the project, sought $700 million.
Ultimately, the parties failed to reach any sort of agreement in mediation, and all parties pulled out of the project, eventually leaving it to be reassigned.
Look for Settlement in Casino Case
There are several key points in the lawsuit brought by Mohegan Sun.
First, Melnyk did not countersue; he merely mounted a defense.
Second, he asked for the bank drafts to be separated, hinting that he might plead guilty to one or more and fight the others.
Third, the best-case scenario for Melnyk is a settlement in this case. The case would go away, and the negative publicity surrounding it might disappear over time.