BELLEVILLE – A former Casino Queen officer is suing the casino and its insurer for allegedly failing to reimburse him for legal defense costs incurred in a class action accusing him of participating in pension fraud.
Belleville attorney Thomas Q. Keefe Jr. filed the lawsuit on behalf of James G. Koman in the St. Clair County Circuit Court. The suit was filed against The Queen Casino & Entertainment, Inc f/k/a Casino Queen Holding Company, Inc., Standard General, LP, SG CQ Gaming, LLC, Standard General Master Fund, L.P., Standard General Master Fund, LP, Vcorp Services and P Standard General Ltd., citing breach of contract.
According to the lawsuit, Koman served as a member of the Casino Queen Board of Directors. On April 27, 2020, a federal class action lawsuit alleging pension fraud was filed against Koman and other officers of the Casino Queen, including St. Clair County Associate Judge and former casino president Jeff Watson, former manager Robert Barrows, and sellers Charles Bidwill III and Timothy Rand.
Koman states that as a board member, Casino Queen is required to provide him with a full legal defense and indemnity. Since then, he has incurred more than $683,000 in legal defense fees which he claims Casino Queen refuses to reimburse him for.
Koman claims Casino Queen previously explained to him that it would provide indemnification only if Koman hired panel counsel from Casino Queen's insurance carrier, RSUI Group, Inc. Koman claims he responded that the company's bylaws do not prevent him from choosing his own counsel, and he hired an attorney of his own choice.
Casino Queen and RSUI allegedly refused to allow Koman and other casino officers to select their own counsel and refused to reimburse them for the cost of their legal defense.
On May 21, 2021, Koman and other Casino Queen officers allegedly filed a lawsuit against the casino and RSUI concerning their refusal to honor indemnification. On Sept. 13, the plaintiffs filed a motion for judgement against RSUI separately.
On Dec. 16, 2021, the court entered a judgement finding that RSUI could not dictate Koman's and other Casino Queen officers' choice of counsel in the class action lawsuit and ordered RSUI to pay reasonable rates for their counsel. RSUI was also ordered to pay for fees already incurred and fees that will be incurred in connection with the class action lawsuit.
Following the judgement, the plaintiffs withdrew their lawsuit against Casino Queen hoping that the issue could be resolved outside the court, Koman claims.
Since then, Casino Queen allegedly told Koman and other casino officers that its financial struggles prevent it from advancing defense costs while the class action lawsuit continues to incur costs.
The underlying class action alleges the defendants sold the casino to an employee stock ownership corporation in 2012, as a pension provider under federal retirement law. Then in 2019, participants and beneficiaries learned that the stock's value dropped 95 percent.
Koman is seeking damages in his suit in the amount of $683,000 plus interest, restitution and any other relief the court deems proper.
St. Clair County Circuit Court case number 23LA0243