Casino developers in Palmer and the North End of Springfield are in a sharp dispute over which project may claim businessman Peter Picknelly, head of Peter Pan Bus Lines, who initially invested in the Palmer venture before joining Penn National Gaming in an $807 million casino proposal in his hometown of Springfield.

While Picknelly insists he has separated from the Palmer deal, his former partners say he remains legally bound to the original project, and they threaten to sue to stop Picknelly from moving forward with Penn ­National in Springfield. The partners argue that losing such “a prominent, highly visible local and regional businessman” to a competing project will undermine the Palmer casino bid.