Canadian Businessman Protests Gambling Debt With Bankruptcy

Julie Jacobson/Associated Press

Gaming industry representatives stop to play various slot machines at the Global Gaming Expo on Sept. 25, 2013, in Las Vegas.

A Toronto businessman who faces jail time over $12.9 million in unpaid Las Vegas gambling bets has filed for bankruptcy in the U.S., arguing that those debts were wiped away in an earlier bankruptcy in Canada.

Semion Kronenfeld, 43, filed for protection in U.S. Bankruptcy Court in Las Vegas last week, stating in court papers that U.S. prosecutors were trying to “strongarm” him into making payments to several Nevada casinos. Mr. Kronenfeld was recently charged by a grand jury with felony theft and padding bad checks, and authorities have issued a warrant for his arrest, according to the Associated Press.

Before the recession crippled Mr. Kronenfeld’s real estate ventures, he was a high roller on the Las Vegas gambling scene. He filed for protection from creditors in Canada in 2009 with more than $21 million in gambling debt, according to the Toronto Star.

As part of his Canadian case, Mr. Kronenfeld agreed to repay MGM Grand Hotel LLC and Las Vegas Sands LLC about 3.18% of what he owed to them, his lawyers said in court papers. His other debts were discharged in that case, his bankruptcy attorneys said in court papers.

Mr. Kronenfeld filed for a type of U.S. bankruptcy—Chapter 15 protection—that’s typically used by foreign companies and individuals who are already undergoing a restructuring in another country. The U.S. bankruptcy, his attorneys wrote, is meant to protect Mr. Kronenfeld’s “right to comity and to a fresh start.”

Joseph Scalia, Mr. Kronenfeld’s lawyer, told Bankruptcy Beat that he didn’t know his client’s whereabouts.

In 2011, the Toronto Star quoted a business associate of Mr. Kronenfeld who said that he liked to play blackjack. At one point, Mr. Kronenfeld lived in a nine-bedroom mansion and drove a fleet of luxury cars; newspaper reporters dug up testimony from an addiction counselor who said that Mr. Kronenfeld “did not have a gambling addiction. He had a lifestyle addiction.”

The recent indictment stems from $12.9 million in gambling IOUs that were promised to the Green Valley Ranch resort in Henderson and to the Venetian resort on the Las Vegas Strip more than five years ago.

Write to Katy Stech at katy.stech@wsj.com. Follow her on Twitter at @KatyStech.

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