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.

The main local investors in the Foxwoods deal included the late Comcast-Spectacor chairman Ed Snider, and family charitable trusts for developer Ron Rubin and the daughter of the late Lewis Katz. Katz was one of the owners of Philadelphia Media Network, which publishes the Inquirer, the Philadelphia Daily News, and Philly.com.