Appeals panel upholds bankruptcy court ruling in favor of Susan Bala

Susan Bala
Susan Bala

FARGO (KVRR) – A federal appeals court has upheld a federal bankruptcy judge’s ruling against Attorney General Wayne Stenehjem in his lengthy battle with the owner of a Fargo horse betting business.

Iowa-based federal bankruptcy judge Thad Collins ruled against state claims in the complicated legal odyssey that began in 2004 against Susan Bala. Collins wrote “enough is enough” and called the ongoing litigation “a runaway process that must stop.”

Stenehjem pursued the 17-year-old bankruptcy court battle with Bala, despite Collins’ blistering rebuke of the state’s actions, one of which might have been illegal.

Friday, a U.S. Bankruptcy Court appellate panel upheld Collins’ ruling.

“The bankruptcy court insisted that this marathon litigation must end, and we agree. The time to reach a final adjudication on claims is long overdue,” the three-judge panel wrote.

In 2017, and more than a decade after Bala’s conviction was overturned, Collins, the federal bankruptcy judge, ruled the state must refund Bala’s business the money it collected for taxes.

State lawyers approved the settlement at the time and the Legislature allocated $15.8 million to be paid to Bala. The money has been held in a bankruptcy trust estate.

Part of the agreement approved by the court required the state to waive any further claims.

“The State had every opportunity to present its case” the ruling says.  “The State has had years and years to prepare its case in support of its Claim. We find that the bankruptcy court did not abuse its discretion in holding that the record was closed.”

Bala, 66, was convicted by a jury in 2005 of 12 felonies involving charges of running an illegal gambling business in what prosecutors said was the state’s largest illegal gambling case. She and RSI were ordered to forfeit more than $99 million. The forfeiture was reversed and a federal appeals court overturned the verdict. Bala was released from custody after serving about 17 months.

Categories: Local News, North Dakota News