Stifel v. Lac DU Flambeau Band of Lake Superior Chippewa Indians

Stifel v. Lac DU Flambeau Band of Lake Superior Chippewa Indians

Opinion

 [*188]  RIPPLE, Circuit Judge. The current appeal is the most recent in a series of lawsuits that have arisen over the sale of bonds by the Lake of the Torches Economic Development Corporation ("the Corporation"), a corporation wholly owned by the Lac du Flambeau Band of Lake Superior Chippewa Indians ("the Tribe") (collectively "the Tribal Entities"). In a prior action in this court, Wells Fargo Bank ("Wells Fargo") had alleged [**3]  that the Corporation had breached a bond indenture and, as trustee for the bondholders, had sought "the appointment of a receiver to manage the trust security on behalf of the bondholder." Wells Fargo Bank v. Lake of the Torches Econ. Dev. Corp., 658 F.3d 684, 686 (7th Cir. 2011). We held that the bond indenture constituted an unapproved management contract under the Indian Gaming Regulatory Act ("the IGRA"), 25 U.S.C. §§ 2701-2721, and was therefore void. Following our decision, the validity of other bond-related documents continued to be litigated in other courts.

After more than three years of litigating in federal and state court, the Tribal Entities instituted a tribal court action in April 2013 seeking a declaration that the bonds are invalid under the IGRA as well as tribal law. The action currently before the court represents the efforts of the non-tribal parties to put an end to the tribal court action. Those non-tribal parties are: Stifel, Nicolaus & Company, Inc., the initial purchaser of the bonds; Stifel, Nicolaus & Company's parent corporation, Stifel Financial Corporation (collectively "Stifel"); LDF Acquisition, LLC ("LDF"), a special purpose vehicle created by the predecessor of Saybrook Fund Investors, LLC (collectively "Saybrook") for the purpose of purchasing the bonds; Wells [**4]  Fargo;¹ and Godfrey & Kahn S.C. ("Godfrey"), counsel to the Corporation and bond counsel to the transaction. Specifically, the Financial Entities and Godfrey sought an injunction in the Western District of Wisconsin to preclude the Tribal Entities from pursuing their tribal court action.

Following the submission of evidence and a hearing, the district court preliminarily enjoined the Tribal Entities from proceeding against the Financial Entities, but allowed the tribal action to proceed against Godfrey. The Tribal Entities appealed the district court's grant of the injunction, and Godfrey cross-appealed the district court's denial of the same.

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