SCHEDULE 14A
SCHEDULE 14 INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [ X ]
Check the appropriate box:
[X ] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c)
or Section 240.14a-12
Name of Registrant as Specified in Its Charter:
Santa Fe Gaming Corporation
Name of Person(s) Filing Proxy Statement:
Hotel Employees & Restaurant Employees International Union
Payment of Filing Fee (check the appropriate box)
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),
or 14a-6(j) (2).
[X ] $500 per each party to the controversy pursuant to
Exchange Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-
6(i)(4) and 0-11.
1) Title of each class of securities to which
transaction applies:
_____________________________________________________________
2) Aggregate number of securities to which transaction
applies:
_____________________________________________________________
3) Per unit price or other underlying value of
transaction computed pursuant to Exchange Act Rule 0-11: (1)
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(1) Set forth the amount on which the filing fee is
calculated and state how it was determined.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
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1) Amount previously paid:
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Date Filed: _______________________________
<PAGE>
PRELIMINARY PROXY STATEMENT
SHAREHOLDER SOLICITATION FOR INDEPENDENT CANDIDATES FOR
SANTA FE GAMING BOARD OF DIRECTORS
Date sent to shareholders [est]:
Feb. 28, 1999
ANNUAL STOCKHOLDERS MEETING
March __, 1999
[Location; Time]
Las Vegas NV
Hotel Employees & Restaurant Employees International Union
1219 28 Street NW
Washington D.C. 20007
Tel. (888) 273-4564
Fax (202) 333-6049
Dear Santa Fe Gaming Preferred Shareholder:
I. ELECT INDEPENDENT CANDIDATES SIRIS & BRADHAM TO
THE BOARD OF DIRECTORS AS SPECIAL DIRECTORS TO REPRESENT
PREFERRED SHAREHOLDERS
For the first time, holders of the Exchangeable Redeemable
Preferred Stock of Santa Fe Gaming Corp. ("the Company") are
entitled to vote on two Special Directors to represent their
interests on the Company's Board of Directors. The nominees for
Special Director include Mr. Peter J. Siris, who nominated
himself, and Mr. John M. Bradham, who was nominated by the
largest Preferred Shareholder, Hudson Bay Partners, L.P.
They will be running in opposition to persons nominated
by the Company's current Board of Directors, which was elected
solely by holders of common stock. Mr. Paul Lowden, Chairman
of the Board of Santa Fe Gaming, owns over 50% of the company's
voting Common Stock.
PETER J. SIRIS:
Peter J. Siris has been President of The Siris Group, an
investment management and consulting firm since 1996. Since April
1998, Mr. Siris has been a Director of Crown American Realty
Trust, a real estate investment trust investing in shopping malls
and hotels. He was also a member of the Board of Directors of
Crown American Corporation, predecessor to Crown American Realty
Trust, in 1992 and 1993, and was involved in turning the company
around through a non-bankruptcy restructuring. In 1996, Mr. Siris
was Senior Vice President of ABN-Amro-Chicago Corp. In 1995, he
was Senior Vice President of Warnaco and its affiliate Authentic
Fitness, two retail businesses. From 1990 to 1995, Mr. Siris was
Managing Director of UBS Securities, focusing on analysis of
retail companies and investment banking work, including
corporate restructurings. From 1983 to 1990, he was Executive
Vice President and Director of Buckingham Research Group. From
1974 to 1979, Mr. Siris was involved in the turnaround and
restructuring of Sirco International as its Executive Vice
President and Director. Mr. Siris earned an MBA with Distinction
from the Harvard Graduate School of Business Administration in
1968. He is the author of "Guerrilla Investing", which presents
strategies and techniques for individual investors. Mr. Siris is
the beneficial owner of approximately 67,000 Preferred Shares in
the Company.
JOHN M. BRADHAM:
John M. Bradham is a Partner in law firm of Peabody & Brown where
he has practiced since 1997. He works in the
firm's Washington, D.C. office, where he practices commercial
litigation and is also a member of the firm's Hospitality
Practice Group, counseling hospitality industry clients in both
litigation and non-litigation matters. Mr. Bradham is also
experienced in the area of bankruptcy law and has worked on a
number of major bankruptcy cases. From 1993 to
1997, Mr. Bradham practiced law with the firm of Akin, Gump,
Strauss, Hauer & Feld. Prior to that, he practiced at
Cadwalader, Wickersham & Taft. Mr. Bradham is a 1987 graduate
of Cornell Law School, and a 1984 graduate of Davidson College.
He resides in Washington, D.C.
Address:
1255 23 St NW
Washington, D.C. 20037-1170
Telephone: 202-973-7727
Fax: 202-973-7750
SUPPORT THESE HIGHLY QUALIFIED CANDIDATES
We are advised that these candidates are endorsed by Hudson
Bay Partners, L.P., which reported beneficially owning 2,166,100,
or 24.5%, of the outstanding Preferred Shares on February 8,
1999.
The Company's Board has nominated [_________] for Special
Directors. Mr. Paul Lowden, Chairman of the Board of Santa Fe
Gaming, has owned over 50% of the company's voting Common Stock.
As such, Mr. Lowden has controlled the election of the Board of
Directors since the issuance of the Exchangeable Redeemable
Preferred Stock in October 1993.
Since that time, Santa Fe Gaming's financial condition has
included the following:
The Company has only had one profitable year since October 1993.
The Company's 1998 10-K Report to the SEC shows an accumulated
deficit of $114,957,636, and a stockholders' deficiency of
$41,484,202. Contained in the Company's 1998 10-K is Deloitte &
Touche's Independent Auditors Report on December 23, 1998, which
states:
"The Company's inability to meet the repayment terms of
the 13% Notes, its net losses, and its stockholders'
deficiency raise substantial doubt about its ability to
continue as a going concern."
Preferred Shareholders' capital account as of September 30, 1998
was $21.9 million. However the Company is party to financing
arrangements that restrict the Company's ability to declare and
pay dividends or make distributions with respect to the Company's
capital stock, which currently prohibit the payment of cash
dividends on the Preferred Stock.
Based on this record, we believe Preferred Shareholders need
independent representation on the Company's Board of Directors.
Independent Candidates Siris and Bradham will bring experience in
turning around troubled companies, in bankruptcy law and
workouts, and in the hospitality business, as well as independent
representation, to the Board.
The incumbents nominated for election by the Common
Stockholders, for whom you are not entitled to vote, are
[_____________].We incorporate by reference all further
information concerning the Directors' election contained in the
Company's 1999 proxy statement (pp. __). We cannot offer
assurance that nominees backed by management will serve if
elected with the Independent Nominees.
II. VOTING RIGHTS AND PROCEDURES
This solicitation is only for owners of Preferred Shares, who
are only permitted to vote for two Special Directors. The Special
Directors will serve in addition to the six current Directors, of
whom [#____] are up for reelection by the Company's Common
Shareholders.
You may vote for these nominees on our proxy card
(enclosed). We will keep all proxy cards we receive confidential
until the meeting, unless ordered otherwise by a court.
You can readily change your vote if you have already voted.
A proxy can be revoked at any time prior to its being counted at
the meeting by (1) executing a later dated proxy card; (2)
appearing at the meeting to vote, or (3) delivering the
proxyholder or the Company's secretary written notice of
revocation prior to the date of the meeting. The Company's
offices are at 4949 North Rancho Drive, Las Vegas NV 89130, fax
(702) 658-4304, tel (702) 658-4300.
The enclosed proxy card grants no discretionary authority.
If matters come before the meeting which are not described in the
Company's proxy statement or this proxy statement, we will not
vote your shares on those matters. If you sign the enclosed card
but do not direct us how to vote on the proposal we will vote FOR
election of Mr. Siris and Mr. Bradham. All holders of stock as
of the record date of January 22, 1999 are entitled to vote. The
Special Directors will be elected by plurality of shares voted
for each seat. We incorporate herein by reference the discussion
in the Company's proxy statement of voting requirements and
outstanding securities (pp. __).
III. SOLICITATION AND PARTICIPANTS
The participants in this solicitation will be the Hotel
Employees & Restaurant Employees International Union ("HERE") and
its Las Vegas affiliate Local 226. Over five years ago,
Locals 226 and 165 were elected to represent approximately 600
employees of the Company's Santa Fe Hotel & Casino in Las Vegas.
The locals are in negotiations with the hotel over
the terms of a first contract. The parties have substantial
differences but no strike has occurred or been called. In the
past, the General Counsel of the National Labor Relations Board
issued complaints against the hotel and the Company's Pioneer
Hotel due to charges filed by the Locals. An NLRB case resulting
from unilateral changes by management in employment terms,
including changes to health insurance, was
settled in principle last year, with liability not yet liquidated
but estimated at several hundred thousand dollars. While we hope
the Independent Nominees might persuade management to take a
different labor relations posture -- thereby avoiding such
liabilities in the future -- we have received no assurances from
the Independent Nominees concerning labor relations. None of the
Independent Nominees have worked for or received any compensation
from any participant. The Locals' joint board has owned
seven shares of Common Stock and five shares of Preferred Stock
for at least five years. HERE and the Locals will bear the costs
of this solicitation, which are estimated at $5,000 and may
include use of a professional solicitor. We will not seek
reimbursement from the Company. In addition, regular staff of
HERE and the Locals will solicit proxies, for which they will
receive no added compensation. The persons named in the proxy
card are HERE Research Director Matthew Walker and Local 226
Research Director Courtney Alexander. Proxies will be sought by
mail, fax, telephone and personal interview. Local 226's address
is 1630 S. Commerce St., Las Vegas NV 89102, tel. (702) 387-7082;
fax (702) 385-1197.
We have no arrangements with any nominee or preferred
shareholder concerning the Company or its securities, other than
the nominees' consent to be named in our proxy materials.
Mr. David Lesser is President, sole director and sole shareholder
of Hudson Bay Partners, Inc., general partner of Hudson Bay
Partners, L.P. ("Hudson"). We incorporate by reference herein the
Schedule 13D filed by Hudson on February 8, 1999 (available from
www.sec.gov or by contacting us). The address of Hudson and Mr.
Lesser is 237 Park Avenue, Suite 900, New York, New York, 10017,
telephone (212) 692-3622. Hudson is also a bondholder in Pioneer
Finance Corporation, a subsidiary of the Company and recipient of
guaranties by the Company. Pioneer Finance failed to pay
principal and accrued interest at maturity on December 1, 1998,
and Santa Fe Gaming failed to make that payment under its
guaranty. Hudson and seven other creditors have filed an
involuntary bankruptcy petition against Pioneer Finance and Santa
Fe Gaming Corp. Hudson Bay advises as follows: it has no
arrangements with any of the nominees about their conduct as
director if elected, nor about future transactions involving the
Company, nor regarding future employment by the Company, nor
concerning the Company's securities. Other than Mr. Siris'
purchase of Preferred Shares, none of the Independent Nominees
have had any transactions in the Company's stock or with
the Company.
IV. EXECUTIVE COMPENSATION/SECURITY OWNERSHIP OF DIRECTORS
AND EXECUTIVE OFFICERS
We incorporate herein by reference the information on these
matters contained in the Company's proxy statement (pp. __).
V. PROPOSALS FOR FUTURE MEETINGS
The deadline for submitting such proposals for inclusion in
management's proxy statement for the 2000 annual meeting will be
December __ __, 1999.
For more information, contact HERE Research at (702) 387-7082 or
888-273-4564 toll free.
VOTE SIRIS AND BRADHAM FOR SPECIAL DIRECTORS TO THE BOARD OF
DIRECTORS OF SANTA FE GAMING
<PAGE>
SOLICITED BY HERE INTERNATIONAL UNION
for 1999 ANNUAL MEETING OF SANTA FE GAMING SHAREHOLDERS
The undersigned shareholder hereby appoints Matthew Walker
and Courtney Alexander proxies with full power of substitution
to vote for the undersigned at the 1999 annual meeting of Santa
Fe Gaming Corporation, and at any adjournments thereof, on the
matters set forth in the Proxy Statement. The undersigned hereby
directs this proxy be voted in accordance with the instructions
herein and grants no discretionary authority. If not marked
otherwise, this proxy will be voted FOR election of Mr. Siris and
Mr. Bradham.
I. ELECTION OF DIRECTORS:
Independent Nominees:
Mr. Peter J. Siris
Mr. John M. Bradham
[ ] FOR all said Independent Nominees
[ ] WITHHOLD AUTHORITY for all Independent Nominees
Instruction: To withhold authority to vote for election of
one of the above nominees, mark FOR above and cross out name(s)
of persons with respect to whom authority is withheld.
II. PROPOSALS TO BE VOTED ON BY SHAREHOLDERS
_____________________________________
FOR [ ] AGAINST [ ] ABSTAIN [ ]
PLEASE DATE, SIGN AND PROMPTLY MAIL IN THE SELF-ADDRESSED
ENVELOPE. PERSONS SIGNING IN REPRESENTATIVE CAPACITY SHOULD
INDICATE AS SUCH. IF SHARES ARE HELD JOINTLY, BOTH OWNERS
SHOULD SIGN.
SIGNATURE ________________________________ DATE ___________
PRINT NAME ________________________________
ADDRESS _____________________________________________________
___________________ ___________ __________________
ACCOUNT NO./SSN # OF SHARES TEL. NO./FAX NO.
