PAOLI, Ind. - Partners developing an Orange County casino resort are at bitter odds over ownership, oversight and other issues involving the $382 million project in southern Indiana, according to lawsuits and arbitration documents unsealed Monday.\nOrange County Holdings LLC, run by the son of Bloomington billionaire William Cook, and Indianapolis-based Lauth Property Group formed Blue Sky Casino LLC last November and signed a long-term contract with the Indiana Gaming Commission to open a 1,200-slot riverboat casino by late this year.\nThe project also includes construction of a golf course, event center and renovation of two century-old hotels in French Lick and adjacent West Baden.\nBut the lawsuits and arbitration documents ordered unsealed by Orange Circuit Court Judge Larry Blanton include numerous accusations between the companies about spending, ownership interests and William Cook's role in the project.\nLauth claims that Cook, the CEO of The Cook Group, has spent lavishly on the hotel renovations, including gold and silver leaf gilding in a hotel lobby despite its absence from the budget. The Cook Group formed Orange County Holdings but did not retain any ownership interest in it.\nBut Lauth says William Cook has been directly involved in decisions about the project even though he has no ownership in the partnership.\nCook's son, Carl, is president of Orange County Holdings, but Lauth alleges William Cook dominates and controls his son, and cost overruns at the French Lick hotel alone already exceed $20 million and are "continuing with no foreseeable end."\nWilliam Cook claims that as an owner of a construction company performing work on the hotels, he has contractual rights to monitor restoration of the hotels. But he denies having de facto influence over the project or exercising improper management.\nCook and Orange County Holdings claim in an arbitration document that Lauth's business model is to spend as little of its own money as possible on any project, and once construction is complete, sell it to the highest bidder. It said Lauth and his companies have treated "this massive, historic renovation and economic development project as if they were building a Best Buy or a Home Depot."\n"This dispute is the culmination of a clash between two competing -- and perhaps irreconcilable -- philosophies," the document said.
Orange County Holdings also claims that Lauth did not have some of its financing in place by an April 15 deadline as called for in an agreement between the ventures, and because of that must forfeit 25 percent of its 50 percent interest. Lauth claims that there was a mutual agreement to extend that deadline, and it still owns 50 percent of the project.\nSome of the claims are in arbitration, and some in lawsuits before Blanton's court.\nThe lawsuits were filed in June. The first was by Orange County Holdings, claiming that Lauth had no unilateral authority to try to fire an architect firm and a separate group to operate the two hotels. Lauth claimed the two entities were not meeting budget requirements, among other things.\nLauth's lawsuit was filed against William Cook, claiming that he was making decisions without ownership interest in Blue Sky. It seeks to enjoin him from exercising any control over the project or even being on the property.\nSteve Ferguson, president of The Cook Group, said the company was committed to the project and that William Cook had invested $100 million in it. He said the Lauth suit was primarily a harassment action.\nLauth issued a statement saying it also remained committed to the project and was confident it would prevail in the litigation.\nErnie Yelton, executive director of the Indiana Gaming Commission, said his agency was conducting an ongoing investigation into the dispute, and for now considered Orange County Holdings and Lauth to have 50-50 ownership. Any change in that ownership would have to be approved by the commission, he said.\n"I am extremely optimistic that the casino will open as scheduled and am very hopeful the dispute between the parties will be resolved amicably," he said. The casino is set to open Nov. 1.\nDemocratic state Rep. Jerry Denbo of French Lick, who led a yearslong legislative effort to get authorization for what will be Indiana's 11th casino, said any legal delays would only hurt the people of Orange County, which has a long history of high unemployment.\n"I'm just hopeful that things will move forward," he said.\nThe partners had sought to keep the court documents confidential, but several newspapers asked Judge Blanton to make the lawsuits and records pertaining to them public. Although some information was redacted, most was not.\nBlanton set an Aug. 14 hearing to determine whether he will decide ownership interest or leave it to arbitration.
