Lakes Entertainment, Inc. (“Lakes”) (NASDAQ: LACO) announced today, that on July 17, 2013, it entered into a Debt Termination Agreement with the Shingle Springs Band of Miwok Indians (“Tribe”) (the “Debt Termination Agreement”) relating to loans Lakes made to the Tribe for the development of the Red Hawk Casino, located in Placerville, California. The Debt Termination Agreement requires certain conditions to be met, including a lump sum payment by the Tribe to Lakes of $57.1 million on or before December 31, 2013, subject to extension for 120 days. This payment will constitute full and final payment of all debt owed to Lakes as of the date the payment is made (“Payment Date”).
Upon the Payment Date, the management agreement under which Lakes is managing the Tribe’s Red Hawk Casino will terminate. Until the Payment Date, Lakes will continue to manage the Red Hawk Casino and all existing agreements between the Tribe and Lakes will remain in effect. If all of the conditions under the Debt Termination Agreement, including the $57.1 million debt payment, are not met, then all existing agreements between Lakes and the Tribe will remain in effect until their original expiration under their existing terms.
Tim Cope, President and Chief Financial Officer of Lakes stated, “Lakes and the Shingle Springs Tribe have worked together to reach a mutual agreement regarding the prepayment of the debt owed by the Tribe. This termination agreement will allow the Tribe to benefit from its new compact with the State of California and the accelerated payment will benefit Lakes by allowing it greater financial flexibility when pursuing new projects.”
About Lakes Entertainment
Lakes Entertainment, Inc. currently owns the Rocky Gap Casino Resort near Cumberland, Maryland. Lakes also has a management agreement with the Shingle Springs Band of Miwok Indians to manage the Red Hawk Casino, an investment in Rock Ohio Ventures, LLC’s casino and racino developments in Ohio, and an investment in Dania Entertainment Center, LLC’s Dania Jai Alai fronton in Dania Beach, Florida.