Harrah's Entertainment, one of the world's biggest casino operators, may be in trouble as a lawsuit by the Mohawk Tribe could add another $2.8 billion to its pre-existing $13.9 billion that the company's buyers agreed to take on as part of their buy-out deal.
Private equity firms Apollo Management and Texas Pacific Group originally agreed to purchase Harrah's for the amount of $17.1 billion, which includes the $13.9 billion debt.
The tribe sued the gaming company back in 2000 over a deal the two had signed for a joint development of a new casino in Upstate New York's Catskills. According to the tribe, the deal was only made to keep tribal competition away from the four Atlantic City casinos of Park Place's successor company, Harrah's Entertainment Inc.
The tribe was awarded by a tribal court $1.8 billion and later - an extra $1 billion in interest. Harrah's is fighting the court decision and is claiming that the tribal court is not legitimate.
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