Archives for April 11, 2019

Funds returned to bankrupt horse betting firm should go to charity

The case involves Racing Services Inc., a company owned by Susan Bala that filed for bankruptcy in 2004, shortly after the company came under scrutiny by federal authorities.

A case was eventually brought in federal court and Bala was ultimately sentenced to prison on illegal gambling charges. She was released early after her convictions were overturned on appeal.

A federal judge ruled in 2014 that the state of North Dakota wasn’t authorized to collect taxes on account wagering, a form of gambling that utilized services like RSI, during the time period involved and North Dakota agreed to pay RSI’s bankruptcy estate about $15.9 million.

Early on in the bankruptcy case a large creditor — PW Enterprises — filed an initial claim of about $2.2 million.

After the state agreed to pay the bankruptcy estate nearly $16 million, PWE amended its claim, boosting what it sought from the estate by about $10.8 million.

PWE owner Peter Wagner was described in court documents as a high-volume computer player who had agreements with RSI regarding things like gambling rebates.

In late 2018, a bankruptcy court judge denied PWE’s amended claim, but approved the initial claim of about $2.2 million.

PWE appealed the decision, maintaining that under state law it was entitled to money North Dakota paid …