The default by the Lac du Flambeau tribe and its gaming operations on a $50 million bond offering continues to make headlines. In December 2011, Saybrook Capital, a Santa Monica-based investment group and sole bondholder, filed a Wisconsin state court lawsuit against the Milwaukee-based law firm of Godfrey & Kahn. Godfrey & Kahn served as bond counsel to the deal.
The suit against the law firm seeks money damages for alleged legal malpractice and misrepresentation. Other charges include securities fraud.
Also named in the litigation is Stifel Financial Corp., parent company of Stifel, Nicolaus & Co., the St. Louis securities firm that marketed the bonds, and the Lake of the Torches Economic Development Corporation, the tribe's corporate entity directly involved in the transaction.