DANVILLE — The corporation that owns the property where the Danville casino was going to be located is being sued by one of its shareholders.
Ellen Mervis Tully alleges in her state lawsuit that Vermilion Development Inc. is illegally withholding records about the potential sale of the property.
Tully’s suit argues that since her trust has a one-third ownership stake in Vermilion Development, she has a right to view its records.
Haven Gaming LLC had been planning to build a casino south of Interstate 74 near the Lynch Road exit but withdrew its application last month after the Illinois Gaming Board deemed it incomplete.
Haven’s lawyer told the gaming board in January that the partners in the project changed in the week before the application was submitted, so the required disclosures for the new people involved weren’t complete.
The Danville City Council earlier this month approved a new bid from a reconfigured entity called Danville Development LLC, which is planning a casino about a mile northwest of the original site at 204 Eastgate Drive.
Since March, Tully has been seeking “option agreements, real-estate contracts, letters of intent and any other agreements” related to the proposed casino.
“As you know, Ellen has expressed concern that real-estate transactions are not being pursued in ways that are most financially advantageous to the Company,” Meyer Capel attorney David Sholem wrote in an email to Jerry Davis, the registered agent for Vermilion Development.
In response to the request for documents, Davis asked Tully to sign a confidentiality agreement to see certain documents.
While they negotiated over the terms of the agreement, Davis turned over some documents but withheld others until a confidentiality agreement was signed.
“We have previously provided the transactional documents requested for all the referenced real estate transactions, except documentation as to the pending matter of a possible transaction for the casino site,” Davis wrote June 12. “Due to the very sensitive nature of the matter, the Company is not willing to disclose any documentation regarding the matter without (an) adequate confidentiality agreement.”’
The proposed confidentiality agreement would’ve required Tully to sell her shares in Vermilion Development for $100,000 if she breached it.
In her state lawsuit filed less than two weeks later, Tully called the confidentiality agreement “overly broad” and the required damages “highly irregular, draconian and arbitrary.”
In Vermilion Development’s response filed this past week by Chicago attorney Zachary T. Fardon, he argued that state law doesn’t forbid confidentiality agreements and denied that the proposed agreement was overly broad and that the damages provision was irregular, draconian and arbitrary.
“A breach of this confidence could result in substantial damage to the Company, amounting to millions of dollars,” Davis wrote.
Fardon also denied that Tully wants to examine the records “for a proper purpose.”
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August 30, 2020
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Owner of original Danville casino site sued by shareholder - Champaign/Urbana News-Gazette
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