BISMARCK — The owner of a defunct off-track horse race wagering company from Fargo claimed victory Thursday, Nov. 29, after a federal bankruptcy judge denied a creditor’s claim for more than $10.8 million.

In a detailed 99-page order, Judge Thad Collins ruled that Susan Bala’s previous agreements with a professional gambler couldn’t have predicted the turn of events that culminated with the state of North Dakota forking over millions of dollars years after she was released from prison. Bala called Wednesday's decision "life-changing" and a validation of the fight she's battled for 16 years.

"It allows me to make sure every creditor of this estate gets paid in full with interest," she said.

The decision marks a major milestone in the winding bankruptcy case involving Bala's company, Racing Services Inc. The company filed for bankruptcy in 2004, not long after it came under the scrutiny of federal authorities. Bala was later sentenced to 27 months in prison on illegal gambling charges but was released early once her convictions were overturned on appeal.

A federal judge said in 2014 that the state of North Dakota wasn’t authorized to collect taxes on account wagering — a type of gambling in which bettors establish accounts with service providers like RSI — "during the time period in question."

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The state agreed to pay the bankruptcy estate nearly $15.9 million last year, and its largest remaining creditor, PW Enterprises, submitted a claim eclipsing $10.8 million. Its owner, Peter Wagner, is described in court documents as a “high-volume computer player” who had agreements with RSI on gambling rebates and for using the company’s facilities.

Collins, however, denied PWE’s claim Wednesday.

“The court finds that the oral rebate agreement between RSI and PWE simply didn’t address or provide for the event that actually occurred here: the return of a large sum of money previously paid as taxes to the state long after the parties’ contractual relationship was over,” the judge wrote.

Martin Foley, an attorney for PWE, predicted they would appeal the decision. He said the judge seemed to suggest his client became greedy, which he disputed.

"We genuinely believe, and continue to believe, that that tax money was improperly taken from us," Foley said.

The judge did approve PWE’s original claim for more than $2.2 million. He also denied a claim from a separate creditor seeking $381,000.

Collins approved Bala’s claim for more than $167,000 for her criminal defense fees, but denied a $1 million claim for losing her life insurance policy along with a separate $136,000 claim for legal fees.

Collins' lengthy order details the history of Bala's case, the nature of her former business and the personal toll the past decade and a half has taken on her life. While in prison, she sold her house to pay for her defense attorney and later suffered health problems, hampering her ability to generate income.

Bala now works as the majority owner of an assisted living center, according to court records. She lives in Moorhead.

Earlier this year, Bala's second request for a "certificate of innocence" was denied in federal court. But her lawsuit against the state of North Dakota claiming her business lost $30.8 million in value and profits after its gambling license was wrongfully denied is still ongoing and awaiting a decision from an appellate court, an attorney for Bala said.

Still, Bala called Wednesday's decision a "huge leap forward."

"It takes it out of the land of uncertainty and puts it back into the land of certainty," she said.