EAST ST. LOUIS – Former Casino Queen part owner James Koman hasn’t produced a single document to plaintiffs suing him over the sale of the property to employees as a pension plan, according to lawyer Michaell Yau of Washington.
She asked District Judge David Dugan for a production order on May 12, on behalf of Tom Hensiek and Jason Gill.
They propose to lead a class action claiming that little remains of $170 million that the pension plan spent to buy the casino.
Yau claims the stock price dropped 95 percent in 2019.
“Plaintiffs lost tens of millions in retirement savings when defendants breached their fiduciary duties and enriched themselves,” she wrote.
According to Yau’s motion, defendants Timothy Rand and Charles Bidwill agreed to produce information for tracing of the proceeds but Koman did not.
She wrote that if Rand and Bidwill don’t provide the information, the motion would apply to them.
Half her brief sought production from all three and half focused on Koman.
She claims he stated he destroyed all his paper documents.
“To date his representations about electronically stored information and his ability to access it has been unreliable and untrue,” she wrote.
“Plaintiffs have no way of knowing what documents are in his possession, custody, or control, the volume of production plaintiffs can expect, or the file types of key documents.”
She claims he has refused to search text messages for relevant information.
She claims he communicated with his lawyers in 2019 and 2020, using an email address he told plaintiffs he stopped using in 2014.
She claims he argued that he had limited resources.
“Mr. Koman is a very wealthy money manager who has founded three separate investment companies,” she wrote.
“His website bio boasts that Mr. Koman has transacted over $12 billion of net lease and other real estate assets.”
She claims that if he is found not to have acted in a fiduciary capacity, plaintiffs could recover but they must trace the ill gotten assets.
Addressing all three former owners, she claims they sold Casino Queen at an inflated price to a plan they effectively controlled.
She claims they walked away with $102 million and plaintiffs were left with their savings invested in a deeply indebted company.
She is requesting production of communications relating to indemnification that Koman, Rand, and Bidwill seek from Casino Queen.
She claims they adopted bylaws requiring the Casino Queen to indemnify them for any legal judgment.
“The circumstances surrounding the indemnification they seek from Casino Queen are highly probative of defendants’ conflicts of interest during the planning and execution of the employee stock ownership plan,” she wrote.
She claims Hensiek and Gill were entitled to determine if the owners had concerns about the transaction.
She claims Rand and Bidwill stated they severed ties with Casino Queen in 2014.
She wrote that in 2020, “Rand requested and presumably received a large set of documents from Casino Queen which he sought to aid in his defense.”
Hensiek and Gill also seek damages from former Casino Queen executives Jeffrey Watson and Robert Barrows.
Judges of the 20Th Circuit appointed Watson as an associate judge in 2019.
District Judge David Dugan presides.