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Seneca Gaming to get $3.6 million to settle construction dispute Connecticut firm was managing work on hotel

Seneca Gaming Corp. will get $3.6 million to settle its dispute with the Connecticut company that managed the construction of its Niagara Falls hotel and casino complex.

Seneca agreed to the settlement with Klewin Building Co. and an affiliated business, as well as TD Banknorth, ending a nearly two-year dispute that erupted in August 2005 when Seneca fired Klewin, charging that it failed to pay subcontractors with more than $14.5 million that had been set aside for that purpose.

Klewin fired back a month later, suing Seneca and charging that the gaming company mounted a campaign to steal business and destroy its credit.

The settlement, which was reached a month after all three parties were scheduled to begin an arbitration proceeding over the dispute, gives Seneca about a quarter of the $14.6 million that the agreement says Seneca is entitled to receive from Klewin.

"There's little likelihood of us seeing all that money because they don't have it," said Philip Pantano, a Seneca spokesman. "From a business perspective, this was $14.5 million that we had written off as a loss. Now we get $3.6 million back in cash."

The $3.6 million that Seneca will receive is what's left from the $14.5 million the gaming company had deposited in a TD Banknorth account in August 2005 to pay the architect and subcontractors on its $200 million hotel and casino complex in Niagara Falls.

TD Banknorth had claimed more than $11 million of the money in that account to cover debt that Klewin had built up on a line of credit through the bank. The settlement allows TD Banknorth to keep that money.

Klewin, which had been dropped in June 2005 as construction manager of the Seneca's 220-room hotel and casino in Salamanca, also agreed to drop a $3 million claim that it had filed against Seneca, Pantano said. In both cases, Klewin was replaced as construction manager by a tribal-owned entity, Seneca Construction Management Corp.

"This was something that has dragged on for close to two years," Pantano said. "We're getting some of the money back that's rightfully ours."

e-mail: drobinson@buffnews.com

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