Empire Resorts Announces Settlement With Noteholders
Empire Resorts, Inc., (NASDAQ: NYNY) today announced that it has entered into a settlement agreement with the holders of over 93% of the outstanding principal amount of the Company’s 5½% Senior Convertible Notes Due 2014 (the “Notes”) and the Trustee under the indenture governing the Notes, pursuant to which the parties have agreed to settle the proceeding commenced by the Company in August 2009 in the Supreme Court of New York, Sullivan County relating to the exercise of the put right contained in the indenture governing the Notes.
Empire Resort Chairman of the Board Emanuel R. Pearlman commented, “The Board has worked diligently over the past months to forge the best possible outcome for our company and its various stakeholders. We are pleased to have reached this agreement with our Noteholders which resolves pending litigation and significantly deleverages the company.”
Under the terms of the settlement agreement, the Company has agreed to repay $22.5 million in aggregate principal amount of Notes and offer to exchange up to 100% of the aggregate principal amount of the Notes that remain outstanding after giving effect to the such repayments for $32.5 million in aggregate principal amount of 12% Senior Convertible Notes due 2014 (the “Restated Notes”) to be issued by the Company and a pro rata share of one million shares of the Company’s common stock. The Company also has the option to seek alternative financing to repurchase all Notes on or before November 22, 2010 for an amount equal to the sum of all outstanding principal and interest (together with default interest from August 3, 2009) owed on the Notes plus $975,000. The Company will redeem any Notes held by a beneficial owner that does not accept the Company’s offer, if made, to exchange the remaining Notes for the Restated Notes and common stock, subject to the terms of the settlement agreement. In addition to the foregoing, the Company repaid an aggregate of $10 million of principal amount of the Notes in July and August 2010 in connection with settlement discussions with the Trustee and the holders of the Notes. Upon the closing of the settlement agreement, the parties to the pending litigation will release all claims known, unknown or suspected that each may have against the other at such time and execute and file a Stipulation of Discontinuance providing for the dismissal of the pending litigation with prejudice and without costs to any party.
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