More on Delaware Deciding Significant Issues of Indiana Tax Law: Bankruptcy Court Lowers Assessed Value of Majestic Star Casino

On September 11, 2011, the Delaware Bankruptcy Court issued a decision on the Majestic Star's 2006-2011 Indiana Property Tax Assessment Appeals:

 

The task for the Court is to determine for ad valorem purposes, the value of two riverboat casinos located in Lake County, Indiana. 

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For the March 1, 2002 through March 1, 2005 assessment dates, the Vessels were assessed at a combined value of approximately $39 million. (Hearing Stip. para. 19.) For the March 1, 2006 assessment date, the Calumet Township Assessor (the “Assessor”) increased the combined assessed value of the Vessels to approximately $110 million. (Id. para 20.)  For the March 1, 2007, and March 1, 2010, assessment dates, the Vessels were assessed in the aggregate amounts of approximately $109 million and $100 million respectively.  (id. para 21, 24). 

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The parties subsequently agreed to limit this proceeding to a determination of the assessed value of the Vessels for Indiana real property tax purposes as of the March 1, 2007, and March 1, 2010 assessment dates. (Am. and Restated First Stip. ¶ 2.) The parties have stipulated that these values will be used to determine the assessed values of the Vessels as of the other assessment dates in dispute, based on an agreed-upon formula. (Id. para 3.)  The other assessment dates in dispute are March 1, 2006, March 1, 2008, March 1, 2009, and March 1, 2011.

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At trial, both parties presented evidence and introduced appraisals that had been performed in the relevant time period for various purposes, none in connection with the instant litigation. As discussed below, these appraisals varied in the purposes for which they were performed and the assets that they valued. Of the various appraisals, the Court finds that the most probative appraisals are those that valued only the assets that are at issue here—the Vessels.

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The Court has concluded on the bases of the facts and law that the County did not meet its burden of impeaching or rebutting the affirmative opinion of value offered by the Debtors. The evidence clearly, precisely and overwhelmingly establishes that Mr. Herman’s opinion as to the true tax value of the Vessels is reliable. The evidence also establishes that the opinions of value offered by the County—through both Mr. Kelly and Ms. Owen—were not reliable and the County failed to meet its burden. Accordingly, the Court concludes that the proper assessed value for the MSC I vessel is $6,290,000 for the March 1, 2007 assessment date and $3,500,000 for the March 1, 2010 assessment date; and the proper assessed value for the MSC II vessel is $5,580,000 for the March, 2007 assessment date and $3,200,000 for the March 1, 2010 assessment date.

http://www.deb.uscourts.gov/Opinions/2011/KG20110913_09-14136.pdf

For the Delaware Bankruptcy Court's determination on Indianapolis Downs' income tax liability, see this post:

http://indianapropertytaxreporter.blogspot.com/2012/06/delaware-deciding-significant-issues-of.html