In this Emerging Issues commentary, Robert W. Stocker II and Peter J. Kulick, members of Dickinson Wright PLLC, attempt to assist practitioners encountering gambling casino chapter 11 cases. Their analysis focuses upon the applicability of the automatic stay and jurisdictional considerations of the bankruptcy court that may arise as a result of the interaction between state gaming regulations and bankruptcy law. They write:
"In a chapter 11 case involving gambling casinos, the interaction of state gaming regulation and federal bankruptcy law may introduce competing interests and goals. The fundamental goal of state gaming regulators is to protect the public integrity of commercial casinos, while bankruptcy law is designed to ensure creditors are paid and an ongoing business can successfully emerge from bankruptcy. Balancing these two goals can present immense challenges to the attorneys and other professionals involved in a chapter 11 bankruptcy case involving a casino operator."
"There is an inherent tension between the original jurisdiction of a bankruptcy court over a chapter 11 case, including jurisdiction over the property of the debtor, and state regulatory oversight of casinos. The tension can serve as a means of deflecting attention from a troubled casino to a jurisdictional battle of control over the oversight of a casino."
"The automatic stay under Bankruptcy Code section 362 limits the use of judicial or administrative tribunals once a bankruptcy petition has been filed. The automatic stay further prohibits any entity from taking any act to gain possession of property of the debtor's estate. There is an important exception to the automatic stay for the exercise of police powers by a governmental unit."
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Robert W. Stocker II is a member of Dickinson Wright PLLC, which has offices in several states, the District of Columbia and Toronto, Canada. He has an international practice in the areas of gaming, regulatory, corporate, and alternative insurance programs (captives and insurance pools) law. Mr. Stocker has represented the successful plan proponents in the Chapter 11 bankruptcy reorganization of a commercial casino with respect to gaming law, institutional investor and qualification matters. Mr. Stocker chairs the firm's Gaming Practice Group. He is an adjunct professor at Cooley Law School, where he teaches gaming law, business planning, and business organizations and is recipient of the Frederick J. Griffith III Adjunct Faculty Award for excellence in teaching.
Peter J. Kulick is a member of Dickinson Wright PLLC, which has offices in Detroit and throughout Michigan, Nashville, Phoenix, the District of Columbia and Toronto, Canada. Peter's practice focuses on tax and gaming law. Peter's practice specifically centers on partnership taxation, tax exempt entities, public finance, tax credit financings, tax matters specifically applicable to gaming industry businesses and representing casinos and gaming suppliers in regulatory matters. Peter has represented the successful plan proponents in the Chapter 11 bankruptcy reorganization of a commercial casino with respect to gaming and tax law matters. He has also successfully represented corporate taxpayers before the U.S. Tax Court. Peter is active in the American Bar Association Tax Section and Michigan Bar Association Tax Section, including holding a leadership position as Chair of the Tax Section's Practice and Procedure Committee.