A federal judge in Philadelphia upheld a 2016 bankruptcy-court ruling blocking a trustee for the defunct Foxwoods casino project in South Philadelphia from recouping the group's $50 million license fee from the state.
U.S. District Court Judge Joseph F. Leeson Jr. said in his opinion entered Wednesday that the lower-court ruling properly applied standards for the fraudulent transfer claims. The lawyers for Foxwoods had made the claim against the Pennsylvania Department of Revenue, which refused to refund the $50 million fee after Foxwoods was stripped of its license in December 2010.
Before filing for bankruptcy three years ago as part of legal strategy to win back the $50 million, the Foxwoods group, formally known as Philadelphia Entertainment & Development Partners L.P., fought for the money in Commonwealth Court.
Under the bankruptcy plan, the first in line to be paid — up to a certain point — would be the law firms owed $10 million from years of work on Foxwoods. The law firm creditors were led by Cozen O'Connor, owed $6.46 million.
The lead attorney for the Foxwoods group, Fred Jacoby, Cozen's vice chairman, said the group was disapointed by the decision and still believe a certain legal doctrine on fraudulent transfers was not applied correctly.
"We have recommended to our clients that they pursue appellate review in the Third Circuit Court of Appeals," Jacoby said.