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Casino Caribbean, LLC v. Money Ctrs. of Am., Inc. (In re Money Ctr. of Am., Inc.)

Casino Caribbean, LLC v. Money Ctrs. of Am., Inc. (In re Money Ctr. of Am., Inc.)

United States Bankruptcy Court for the District of Delaware

February 28, 2017, Decided

Chapter 11, Case No. 14-10603(CSS), Adv. Proc. Case No.: 14-50437 (CSS), Adv. Proc. Case No.: 16-50410 (CSS)

Opinion

 [*90]  OPINION1

Sontchi, J.

INTRODUCTION

Before the Court are two motions to dismiss preferential actions brought by the Chapter 11 Trustee of the above-captioned estates. The two movants are casinos that were formerly in a contractual relationship with the Debtors.2 The two moving casinos are both associated with and are run by their respective Indian tribes. The motions are based the tribes' sovereign immunity from lawsuits. Therein, the Court is asked whether the casinos have a sufficient relationship [**2]  with their respective Indian tribes  [*91]  to enjoy the tribes' sovereign immunity, whether Section 106(a) of the Bankruptcy Code abrogates their sovereign immunity, if any, and whether one of the casinos waived its sovereign immunity, if any, by filings a complaint and/or proof of claim against one of the Debtors' estates.

As set forth infra, the Court finds that (i) this is a facial attack on the Court's subject matter jurisdiction allowing the Court to review various documents attached to the pleadings; (ii) both QCA and Thunderbird are sufficiently related to their respective Indian tribes to enjoy the tribes' sovereign immunity; and (iii) neither Section 106(a) nor Section 101(27) abrogates QCA's and Thunderbird's sovereign immunity.

Thus, the Court lacks subject matter jurisdiction over the claims against QCA and Thunderbird, provided, however, the Court further finds that QCA may have waived its sovereign immunity solely to the extent of recoupment, but only to the extent of QCA's claims against the estates (i.e. the Trustee will not be able to recover any amounts in excess of QCA's claims from QCA).

JURISDICTION

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565 B.R. 87 *; 2017 Bankr. LEXIS 548 **; 63 Bankr. Ct. Dec. 224

In re MONEY CENTER OF AMERICA, INC., et al., Debtors. CASINO CARIBBEAN, LLC, MACAU CASINO, LLC, MACAU SOUTHCENTER, LLC, and Yakima CARDROOM, LLC, Plaintiffs, v. MONEY CENTERS OF AMERICA, INC. CHECK HOLDINGS, LLC, Defendants.MICHAEL ST. PATRICK BAXTER, Solely in his capacity as Chapter 11 Trustee of Money Centers of America, Inc., et al., Plaintiff, v. THUNDERBIRD ENTERTAINMENT CENTER, INC., a wholly owned entity Of the sovereign Absentee Shawnee Tribe of Oklahoma, Defendant.

Subsequent History: Affirmed by, Sub nomine at Sawczuk v. Thunderbird Entm't Ctr., Inc. (In re Money Ctrs. of Am., Inc.), 2018 U.S. Dist. LEXIS 52929 (D. Del., Mar. 29, 2018)

Prior History: Casino Caribbean, LLC v. Money Ctrs. of Am., Inc. (In re Money Ctr. of Am., Inc.), 544 B.R. 107, 2016 Bankr. LEXIS 260 (Bankr. D. Del., Jan. 28, 2016)

CORE TERMS

tribes, sovereign immunity, recoupment, casinos, abrogated, immunity, tribal, Counterclaims, Holdings, waived, subject matter jurisdiction, motion to dismiss, asserts, domestic, sovereign, adverse action, entity, documents, governmental unit, parties, filing proof, alleges, patron, unequivocally, transactions, pleadings, adversary proceedings, preferential transfer, enjoys, cases

Bankruptcy Law, Procedural Matters, Adversary Proceedings, Defenses & Objections, Civil Procedure, Responses, Defenses, Demurrers & Objections, Motions to Dismiss, Judgments, Jurisdiction, Jurisdiction, Subject Matter Jurisdiction, Jurisdiction Over Actions, Evidence, Burdens of Proof, Allocation, Federal & State Interrelationships, State Sovereign Immunity, Federal Judicial Limitations, Constitutional Law, State Sovereign Immunity, Affirmative Defenses, Immunity, Governments, Native Americans, Tribal Sovereign Immunity, Business & Corporate Compliance, Governments, Indian Gaming Regulatory Act, Sovereign Immunity, Legislation, Interpretation, Waiver of Immunity, Contracts Law, Negotiable Instruments, Enforcement, Setoffs, Types of Commercial Transactions, Recoupment, Automatic Stay, Scope of Stay, Bankruptcy, Claims