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The Band has inhabited the Lac du Flambeau area since 1745 when Chief Keeshkemun led the Band to the area. The Band acquired the name Lac du Flambeau from its gathering practice of harvesting fish at night by torchlight. The name Lac du Flambeau, or Lake of the Torches, refers to this practice and was given to the Band by the French traders and trappers who visited the area.

The Lac du Flambeau Reservation was officially established by the Treaty of 1854. The area was continually logged in the following years and became a tourist destination for families from southern Wisconsin and Illinois around the turn of the century. Read More....


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News
Update on LOTEDC Bond Litigation
  
05/27/2016

Trial Dates Finally Set
Trial dates have been set in the longstanding litigation involving the 2008 bond financing obtained by the Lake of the Torches Economic Development Corporation (LOTEDC). The Waukesha Circuit Court trial judge has ordered that this complex case will be tried in two stages - the 1st stage trial before Judge Lazar is set for October 17, 2016, and the 2nd stage jury trial is set to start January 30, 2017. The trial judge has also ordered mediation in an effort to encourage the parties to reach a settlement before trial. The mediation is scheduled for August 23, 2016.

The plaintiff in the lawsuit is the bondholder, LDF Acquisition LLC, owned by Saybrook Tax Exempt Investors LLC (Saybrook), which is seeking to recover the balance due on the $50 million bond issue from 2008. Although the LOTEDC has paid over $20 million, Saybrook is claiming in excess of $73 million when taking into account the 12% interest claimed. Saybrook also seeks to recover its costs and attorney fees. The defendants in the case include the LOTEDC, the Lac du Flambeau Band of Chippewa Indians (Tribe) as guarantor of the bonds, the LOTEDC investment advisor, Stifel, Nicolaus & Co. and Stifel Financial Corporation (Stifel), as well as Saybrook's own attorneys, the Dentons law firm (Dentons), and the attorneys that represented the LOTEDC, Godfrey & Kahn SC (Godfrey Kahn).

Litigation regarding the Invalidity of the Bonds
The LOTEDC and the Tribe have maintained that the bond transaction is invalid and that Saybrook has no right to recover anything from the LOTEDC or the Tribe. In 2010 a federal court judge agreed and invalidated the trust indenture of the bond transaction and other documents related to the transaction, but the 7th Circuit Court of Appeals later reversed in part and sent the case back to the federal trial court to determine whether some of the bond documents were valid and whether Saybrook was entitled to recover on other legal theories. 

In one of the most complex legal and procedural cases imaginable, issues of sovereign immunity and the validity of the bonds were the exclusive focus of litigation for over 6 years with cases pending in federal, state and Tribal courts. In late 2015, the federal court litigation was finally completed and the parties agreed that all remaining matters would be litigated in the pending Waukesha state court case. 

The validity of the bonds and Saybrook's right to any recovery is still in question, but with the resolution of many of the procedural issues, the merits of the case have become the focus of the litigation for the first time. As a result, the LOTEDC/Tribe was finally able to advance their claims against Stifel and Godfrey Kahn and tell the story of what went on in the 2008 bond transaction. 

The LOTEDC Board and staff, the Tribe Council, as well as their attorneys, have been and continue to be under strict confidentiality requirements given pending discovery and upcoming litigation. Recent court filings have made public many of the facts, circumstances and claims in this case - background that has not been generally available. The background coming to light has resulted in significant changes in the pending case.

As the story of the events of late 2007 and early 2008 came to light, Saybrook dramatically changed its position in the case. Saybrook amended its claims to target recovery from Stifel, primarily, and then secondarily from the LOTEDC/Tribe, Dentons, and Godfrey & Kahn SC. Saybrook now asks for recovery against the LOTEDC and the Tribe only if Saybrook does not obtain recovery from Stifel. With recent discovery in the case, Saybrook now sees itself as a co-victim of the fraud perpetrated by Stifel and the professional negligence by the attorneys, Dentons and Godfrey Kahn.

Extensive Discovery Continues - a Long Road Ahead
There is still a long road ahead. The state court case now involves complex claims back and forth between 5 different parties. Discovery has been underway on the claims and hundreds of thousands of documents have been produced and reviewed and over 30 depositions taken of individuals involved, including many members of the LOTEDC Board and Tribal Council as well as LOTEDC staff. It is expected that an additional 30 depositions or more will be taken before the 1st stage trial in October.

The 1st stage trial will focus on the invalidity issues and a warranty claim by Saybrook against Stifel. If the bond transaction is determined to be invalid, the LOTEDC/Tribe will not owe anything to Saybrook under the bond transaction documents. Saybrook, however, will then look to Stifel for payment under the alleged warranty of the bond transaction by Stifel (who will then look to the LOTEDC and possibly the Tribe for payment). Regardless of the result in the 1st stage trial, the LOTEDC and the Tribe, as well as Stifel, Godfrey Kahn, Dentons, will have to defend claims for bond liability at the 2nd Stage trial.

Upcoming Mediation
The court has ordered a mediation in the case in the hope the parties can reach a mutually agreeable settlement. The mediation is schedule for August 23, 2016. We will provide further updates on proceedings in our monthly report.

Additional Background on the Claims in the Case
At the heart of this case are the events related to the bond transaction that was completed in January of 2008. The LOTEDC/Tribe's first amended conditional cross-claims outline in detail the events leading up to the January 2, 2008, Board/Council meeting - as well as what took place at this pivotal meeting. We suggest anyone interested in understanding this case should read this filing.  A copy of the 60 page filing may viewed here.

Update on LOTEDC Bond Litigation
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Lac du Flambeau Tribe
P.O. Box 67
Lac du Flambeau, WI 54538

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