United States Court of Appeals

For the Seventh Circuit

Chicago, Illinois 60604

Submitted September 21, 2018*

Decided January 2, 2019

Before

MICHAEL S. KANNE, Circuit Judge

DIANE S. SYKES, Circuit Judge

DAVID F. HAMILTON, Circuit Judge

No. 18-2862

IN RE: EMERALD CASINO, Inc.

Debtor,

FRANCES GECKER, as Trustee for 

Emerald Casino, Inc.,

Plaintiff-Appellee,

v.

ESTATE OF KEVIN FLYNN, et al.,

Defendants-Appellees.

Appeal of DONALD F. FLYNN, 

SHANNON E. FLYNN, and BRENDAN 

E. FLYNN,

Intervenors-Appellants.

Appeal from the United States District 

Court for the Northern District of 

Illinois, Eastern Division.

No. 11 C 4714

Rebecca R. Pallmeyer,

Judge.

 

* After examining the briefs and record, we have concluded that oral argument is 

unnecessary. Thus the appeal is submitted on the briefs and record. See FED. R. APP. P.

34(a)(2).

NONPRECEDENTIAL DISPOSITION

To be cited only in accordance with Fed. R. App. P. 32.1
No. 18-2862 Page 2

O R D E R

After the Illinois Gaming Board revoked Emerald Casino’s gaming license, the 

company filed for bankruptcy. The bankruptcy trustee initiated an adversary 

proceeding against several former Emerald officers, directors, and shareholders for 

breach of contract and breach of fiduciary duties. The district court found four of those 

defendants severally liable, including the estate of Kevin Flynn. The defendants 

appealed. In May 2016, while that appeal was pending, the bankruptcy trustee served 

citations to discover assets on Susan Flynn (Kevin Flynn’s widow) and others. 

Those citations were necessary, in part, because the Flynns’ financial holdings are

complex. Before we detail some of those holdings, we note that the parties fiercely 

dispute many aspects of the structure and legal effect of the trusts. In summarizing the 

trusts at issue, we offer no opinion regarding their legality or enforceability.

Among other assets, the bankruptcy trustee sought information regarding an 

appointive trust for which Susan served as trustee. Kevin created and funded the 

Appointive Trust via two other trusts. In 1992, Kevin’s father, Donald Flynn, created an 

irrevocable trust (with a spendthrift provision) which designated Kevin as the trustee 

and initial primary beneficiary. The 1992 trust granted Kevin limited testamentary 

power of appointment. In 1995, Kevin created a revocable trust, designating himself as 

the sole trustee and beneficiary. 

Kevin’s will directed that the residue of his estate, including the assets in the 

1992 trust, be distributed to the trustee of the 1995 trust and then administered as that 

document directed. After Kevin’s death, and pursuant to the terms of the 1995 trust, 

“approximately $90 million was transferred from the 1992 Trust” to an appointive trust. 

(Appellant’s Br. at 9.) The terms of the Appointive Trust directed Susan, the trustee, to 

distribute the income and principal as necessary for the health, support, and education

of herself and her four children. 

Susan moved to dismiss the citations. On December 2, 2016, the district court 

denied that motion and ordered the movants to comply with the requested discovery. 

In its decision, the district court emphasized that it was “not ordering the transfer of 

any assets.” (R. 516 at 13.) Rather, with respect to the Appointive Trust, the court simply 

intended its ruling to “permit[] the Trustee to ... determine whether the Appointive 

Trust contains only uncollectable assets.” (Id.) 
No. 18-2862 Page 3

After the district court’s ruling, the bankruptcy trustee commenced the laborious 

process of filing supplemental citations and compelling complete discovery. On August 

11, 2017, while the discovery process continued, we held that the defendants were 

jointly and severally liable (instead of just severally liable) but affirmed on all other 

grounds. Following that appeal, the judgment against the Estate totaled approximately 

$220 million. In October 2017 and February 2018, the district court ordered Susan to 

produce responsive documents. The third round of document production ended in June 

2018. On June 4, 2018, the bankruptcy trustee filed a motion to compel turnover of the 

assets in the Appointive Trust. The district court set trial for January 7, 2019, and froze 

the Appointive Trust.

Susan’s adult children, Donald, Shannon, and Brendan Flynn, moved to 

intervene on July 30, 2018. They argued that the Turnover Motion threatened their 

interests because, if granted, the Appointive Trust would lack assets to support them 

and because their mother was not adequately representing their interests. The district 

court denied the motion after holding a hearing on August 2, 2018. The hearing 

transcript reveals that the district court denied the motion for two reasons. First, the 

district court concluded that the children filed the motion at their mother’s request. (R. 

805 at 10 (“It sounds like, from the testimony [of Shannon Flynn], that it was her 

mother’s idea.”)). Second, the district court wondered “why didn’t the children jump 

into this months ago?” (Id. at 12.) When counsel for the children suggested that the 

children were unaware of their interests until June 2018, the court summarily denied 

intervention. The intervenors appealed several weeks later. 

“Rule 24 provides two avenues for intervention, either of which must be pursued 

by a timely motion.” Grochocinski v. Mayer Brown Rowe & Maw, LLP, 719 F.3d 785, 798 

(7th Cir. 2013). We consider four factors in determining whether a motion is timely: “(1) 

the length of time the intervenor knew or should have known of his interest in the case; 

(2) the prejudice caused to the original parties by the delay; (3) the prejudice to the 

intervenor if the motion is denied; (4) any other unusual circumstances.” Sokaogon 

Chippewa Cmty. v. Babbitt, 214 F.3d 941, 949 (7th Cir. 2000). “We review the district 

court’s decision on timeliness for an abuse of discretion.” Reich v. ABC/York-Estes Corp., 

64 F.3d 316, 321 (7th Cir. 1995).

The initial question is when the Flynn children knew or should have known of 

their interest in this supplemental proceeding. They argue that the bankruptcy trustee’s 

exploratory efforts to evaluate potential assets did not necessitate intervention. Rather,

the movants contend that the threat to their interests did not materialize until the 
No. 18-2862 Page 4

bankruptcy trustee filed the Turnover Motion. But our cases articulate a different 

standard for measuring timeliness. “We determine timeliness from the time the 

potential intervenors learn that their interest might be impaired.” Reich, 64 F.3d at 321

(emphasis added); see also Heartwood, Inc. v. U.S. Forest Serv., Inc., 316 F.3d 694, 701 (7th 

Cir. 2003) (same). When a putative intervenor learns of an interest in a case but decides 

against intervention, they run the risk of an adverse outcome down the road. See 

Grochocinski v. Mayer Brown Rowe & Maw, LLP, 719 F.3d 785, 798 (7th Cir. 2013)

(affirming the denial of a motion to intervene as untimely because the movant knew the 

district court granted discovery on the defense but did not move to intervene until after 

the court granted summary judgment); Sokaogon Chippewa Cmty. v. Babbitt, 214 F.3d 941, 

949 (7th Cir. 2000) (“If the [intervenor] wanted a voice in the litigation, it should have 

asked the district court to allow it to intervene much sooner.”). The intervenors took 

that risk here. The May 2016 citations and district court’s December 2016 order both 

made clear that the bankruptcy trustee intended to seek turnover of the assets in the 

Appointive Trust. Given their manifest interest in the Appointive Trust assets and their 

mother’s extensive involvement in the supplemental bankruptcy proceedings, the 

movants should have known of their interest from at least December 2016.

The next two considerations involve the prejudice to the existing parties and 

proposed intervenors. The bankruptcy trustee argues that intervention would prejudice

it because the time for discovery has passed and trial is imminent. While the 

bankruptcy trustee received an opportunity to depose some of the intervenors during 

discovery, the scope of questioning would likely have been broader if they had been 

parties. And intervention would likely require an adjournment of trial, especially if the 

court reopens discovery. 

The movants argue that the district court’s order will prejudice them because 

they will be unable to raise a contingent counterclaim and defense. Specifically, if the 

bankruptcy trustee succeeds in arguing “that the transfer of assets from the 1992 Trust 

to the Appointive Trust made those assets subject to creditors,” then the intervenors 

will argue that “the transfer was void under the provisions of the 1992 Trust and, as a 

result, the assets should revert back to the 1992 Trust.” (Appellant’s Br. at 38.) Susan is 

not a beneficiary of the 1992 Trust. For that reason, the movants assume that Susan 

cannot raise this argument herself, but that assumption is unsupported. First, Susan 

has, in fact, already raised that argument. (See R. 785 at ¶ 30.) Second, Susan and her 

children share the “same ultimate objective.” Meridian Homes Corp. v. Nicholas W. Prassas 

& Co., 683 F.2d 201, 205 (7th Cir. 1982). They wish to maintain the assets in the 

Appointive Trust, and if not in the Appointive Trust then within the family. Finally, to 
No. 18-2862 Page 5

the extent there is a question regarding whether Susan possesses standing to make this 

argument, that issue is presently unresolved. The bankruptcy trustee believes Susan 

does have standing (because she is the legal guardian of her fourth, minor, child) and the 

district court has not opined on this issue. The intervenors’ assertion of prejudice is thus 

theoretical. See Southmark Corp. v. Cagan, 950 F.2d 416, 418 (7th Cir. 1991) (“[T]he court 

below has not yet decided that [the defendant] has no standing to pursue these claims, 

and it is premature to assume that it will do so.”). At present, the bankruptcy trustee 

would suffer more prejudice from intervention than the movants will suffer from denial 

of intervention. 

Finally, the district court was within its discretion to conclude that there were 

unusual circumstances which supported denial of the motion. The request for 

intervention came several years into protracted and contentious bankruptcy 

proceedings. The intervenors admitted that they moved to intervene at their mother’s 

suggestion. (R. 805 at 5.) In fact, the motion to intervene came six weeks after the district 

court found that another of Kevin Flynn’s asset transfers—this one to Susan directly—

was constructively fraudulent. See In re Emerald Casino, Inc., No. 11 C 4714, 2018 WL 

2967020 (N.D. Ill. June 13, 2018). Against this factual backdrop, the district court could 

have reasonably concluded that the motion to intervene represented an attempt to delay 

and obstruct proceedings, not a good-faith attempt to vindicate unrepresented interests. 

Because the motion to intervene was untimely, the district court did not abuse its 

discretion by denying it. AFFIRMED.