Form 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File No. 1-9762
Resorts International Hotel Financing, Inc.
(Exact name of registrant as specified in its charter)
DELAWARE 65-0461729
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1133 Boardwalk, Atlantic City, New Jersey 08401
(Address of principal executive offices) (Zip Code)
(609) 344-6000
(Registrant's telephone number,
including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes X No
Indicate by check mark whether the registrant has filed all documents
and reports required to be filed by Sections 12, 13 or 15 (d) of the
Securities Exchange Act of 1934 subsequent to the distribution of
securities under a plan confirmed by a court.
Yes X No
Number of shares outstanding of registrant's common stock as of
June 30, 1994: One. There is no current market for the registrant's
common stock.
Total No. of Pages 8<PAGE>
RESORTS INTERNATIONAL HOTEL FINANCING, INC.
FORM 10-Q
INDEX
Page Number
Part I. Financial Information
Item 1. Financial Statements
Statement of Operations for
the quarter and half ended
June 30, 1994 3
Balance Sheets at June 30,
1994 and December 31, 1993 4
Notes to Financial Statements 5
Item 2. Management's Discussion
and Analysis of Financial
Condition and Results of
Operations 6
Part II. Other Information
Item 6. Exhibits and Reports on
Form 8-K 7
2<PAGE>
PART I. - FINANCIAL INFORMATION
Item 1. Financial Statements
RESORTS INTERNATIONAL HOTEL FINANCING, INC.
STATEMENT OF OPERATIONS
(In Thousands of Dollars)
(Unaudited)
Quarter and
Half Ended
June 30, 1994
Revenues:
Affiliated interest income $2,857
Amortization of discount on
affiliated note receivable 207
3,064
Expenses:
Interest expense 2,857
Amortization of debt discount 207
3,064
Net earnings $ -0-
3<PAGE>
RESORTS INTERNATIONAL HOTEL FINANCING, INC.
BALANCE SHEETS
(In Thousands of Dollars, except par value)
June 30, December 31,
1994 1993
(Unaudited)
ASSETS
Current assets - interest receivable
from affiliate $ 2,857
Note receivable from affiliate, net of
unamortized discount 135,507
$138,364 $ -0-
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities - accounts payable
and accrued liabilities $ 2,857
Long-term debt, net of unamortized discount 135,507
Shareholder's equity:
Common stock - $.01 par value, 1 share
issued and outstanding
$138,364 $ -0-
4<PAGE>
RESORTS INTERNATIONAL HOTEL FINANCING, INC.
NOTES TO FINANCIAL STATEMENTS
A. Organization and Operations:
R e s o r ts International Hotel Financing, Inc. ("RIHF") was
incorporated under the laws of the State of Delaware in June 1993.
RIHF, a wholly owned subsidiary of Resorts International, Inc. ("RII"),
was organized to issue the public debt securities described below in
connection with a plan of reorganization of RII. RIHF is authorized to
issue 1,000 shares with a par value of $.01 per share. One share was
issued to RII for $10 in October 1993.
B. Issuance of Notes:
RII and GGRI, Inc. ("GGRI"), a subsidiary of RII and the guarantor
of RII's Senior Secured Redeemable Notes which were due April 15, 1994
(the "Series Notes"), proposed a restructuring (the "Restructuring") of
the Series Notes which was accomplished through a prepackaged bankruptcy
plan of reorganization (the "Plan"). On March 21, 1994, after receiving
the requisite acceptances for confirmation of the Plan from holders of
the Series Notes and equity interests in RII, RII and GGRI filed their
prepackaged bankruptcy cases with the United States Bankruptcy Court for
the District of Delaware (the "Bankruptcy Court"). The Plan was
confirmed by the Bankruptcy Court on April 22, 1994 and on May 3, 1994
(the "Effective Date") all conditions to the effectiveness of the Plan
were either met or waived and the Plan became effective.
Pursuant to the Plan, the Series Notes were exchanged for, among
other things, $125,000,000 principal amount of 11% mortgage notes (the
"Mortgage Notes") due September 15, 2003 and $35,000,000 principal
amount of 11.375% junior mortgage notes (the "Junior Mortgage Notes")
due December 15, 2004. Hereinafter the Mortgage Notes and the Junior
Mortgage Notes, collectively, are referred to as the "New Debt
Securities." The New Debt Securities were issued by RIHF and guaranteed
by Resorts International Hotel, Inc. ("RIH"), RII's subsidiary that owns
and operates Merv Griffin's Resorts Casino Hotel ("Resorts Casino
Hotel") in Atlantic City, New Jersey. Also pursuant to the Plan, RIHF,
RIH and RII entered into the senior note purchase agreement (the "Senior
Facility") described below.
The Mortgage Notes are secured by a $125,000,000 promissory note
made by RIH (the "RIH Promissory Note"), the terms of which mirror the
terms of the Mortgage Notes. The RIH Promissory Note and RIH's guaranty
of the Mortgage Notes are secured by liens on the Resorts Casino Hotel,
consisting of RIH's fee and leasehold interests comprising the Resorts
Casino Hotel, the contiguous parking garage and property, all additions
and improvements thereto, and related personal property. The liens
securing the Mortgage Notes will be subordinated to the lien securing
the Senior Facility Notes (described below), if the Senior Facility
Notes are issued.
The Junior Mortgage Notes are secured by a $35,000,000 promissory
note made by RIH (the "RIH Junior Promissory Note"), the terms of which
mirror the terms of the Junior Mortgage Notes. The RIH Junior
Promissory Note and RIH's guaranty of the Junior Mortgage Notes are also
secured by liens on the Resorts Casino Hotel property as described
a b ove. The liens securing the Junior Mortgage Notes will be
subordinated to the lien securing the
5<PAGE>
Senior Facility Notes, if the Senior Facility Notes are issued, and are
subordinated to the liens securing the Mortgage Notes.
The indentures pursuant to which the Mortgage Notes and the Junior
Mortgage Notes were issued (collectively, the "Indentures") prohibit
RIHF from paying dividends, from making other distributions in respect
of its capital stock, and from purchasing or redeeming its capital
stock, with certain exceptions.
The Indentures also contain certain other restrictive covenants on
the part of RIHF, including (i) limitations on incurring additional
indebtedness, with certain exceptions; (ii) restrictions on making loans
to an affiliate or other person other than (x) intercompany advances to
RII not in excess of $1,000,000 in the aggregate at any time outstanding
and (y) indebtedness evidenced by the RIH Senior Facility Promissory
Note (defined below), the RIH Promissory Note and the RIH Junior
Promissory Note; and (iii) restrictions from entering into transactions
with affiliates, other than transactions entered into in connection with
the Senior Facility, on terms less favorable to RIHF than an arm's
length transaction.
The Senior Facility among RIHF, RII and RIH and certain funds and
accounts advised or managed by Fidelity Management & Research Company
("Fidelity") is available for a single borrowing of up to $20,000,000
during the one-year period ending May 2, 1995, through the issuance of
notes (the "Senior Facility Notes"). If issued, the Senior Facility
Notes will bear interest at 11% and will be due in 2002. The Senior
Facility Notes will be senior obligations of RIHF secured by a
promissory note from RIH (the "RIH Senior Facility Promissory Note") in
an aggregate principal amount of up to $20,000,000 payable in amounts
and at times necessary to pay the principal of and interest on the
Senior Facility Notes. The Senior Facility Notes will be guaranteed by
RIH and secured by a lien on the Resorts Casino Hotel property as
described above. The Senior Facility Notes will also be secured by a
pledge by GGRI of all issued and outstanding shares of RIH common stock.
In addition, the Senior Facility Notes will be guaranteed by RII, which
guaranty will be secured by a pledge of all the issued and outstanding
stock of GGRI and RIHF.
C. Statement of Cash Flows:
RIHF has had no cash transactions to date. RIHF's exchange of the
New Debt Securities for the RIH Promissory Note and the RIH Junior
Promissory Note (at estimated fair values totalling $135,300,000) was a
non-cash investing and financing transaction.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
FINANCIAL CONDITION
RIHF was formed for the purpose of issuing the Mortgage Notes and
the Junior Mortgage Notes as part of the Restructuring, as well as the
Senior Facility Notes to the extent issued. Also as part of the
Restructuring, RIHF obtained the RIH Promissory Note and the RIH Junior
Promissory Note with terms that mirror the terms of the Mortgage Notes
and the Junior
6<PAGE>
Mortgage Notes with the intent that RIH pay interest to RIHF on RIHF's
interest payment dates so that RIHF will have cash available to make its
interest payments on those dates.
RESULTS OF OPERATIONS
Because the terms of the RIH Promissory Note and the RIH Junior
Promissory Note were written to mirror the terms of the New Debt
Securities, RIHF has affiliated interest income equal to the interest
expense on its public debt. It is not anticipated that RIHF will have
any other operations or activities, except those related to the New Debt
Securities and, if issued, the Senior Facility Notes or certain similar
financing activities.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
b. Reports on Form 8-K
No Current Report on Form 8-K was filed by RIHF covering an event
during the second quarter of 1994. No amendments to previously filed
Forms 8-K were filed during the second quarter of 1994.
7<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
RESORTS INTERNATIONAL HOTEL FINANCING, INC.
(Registrant)
/s/ Matthew B. Kearney
Matthew B. Kearney
President
(Authorized Officer of
Registrant and Chief
Financial Officer)
Date: August 10, 1994
8<PAGE>
