SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) October 18, 1999
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Riviera Holdings Corporation
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(Exact Name of Registrant as Specified in Charter)
Nevada 000-21430 88-0296885
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
2901 Las Vegas Boulevard South, Las Vegas, Nevada 89109
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (702) 734-5110
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(Former Name or Former Address, if Changed Since Last Report)
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Item 5. Other Events
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On Friday, October 8, 1999, the Federal District Court for the
Central District of California approved a bar order as part of a
settlement of the lawsuit brought by Allen Paulson against the
registrant. A copy of the court order is filed as an exhibit hereto.
Pursuant to such settlement, registrant purchased 463,655 shares from
Mr. Paulson for $7.50 per share. By a letter, dated October 13, 1999,
registrant's Chairman advised holders of Contingent Value Rights
("CVR's") that they would receive from an escrow established by Mr.
Paulson in connection with the aborted Paulson-Riviera merger $2.46 for
each CVR. On Friday, October 8, 1999, there were 1,770,000 CVR's
outstanding. A copy of such letter is filed as an exhibit hereto.
These events are also described in a press release, dated
October 13, 1999, filed as an exhibit hereto.
On October 14, 1999, registrant agreed to purchase 81,000 of
its shares from Sun America, Inc. at $7.50 per share. Such transaction
will reduce Sun America's ownership of registrant below 15% of
registrant's outstanding stock to facilitate the licensing by the
Colorado Gaming Commission of registrant's subsidiary, Riviera Black
Hawk, Inc. After giving effect to such share repurchases, registrant
will have 4,523,021 shares of common stock outstanding.
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
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(c) Exhibits
99.1 Settlement Bar Order and Final Judgment of the United
States District Court, Central District of California,
Western Division.
99.2 Letter, dated October 13, 1999, from Riviera Holdings
Corporation to Contingent Value Right Holders.
99.3 Press Release, dated October 13, 1999.
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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 hereunto duly authorized.
RIVIERA HOLDINGS CORPORATION
(Registrant)
/s/ Duane Krohn
Date: October 18, 1999 -------------------------------------
Duane Krohn
Treasurer and Chief Financial Officer
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EXHIBIT INDEX
Exhibit
Number Description
99.1 Settlement Bar Order and Final Judgment of the United
States District Court, Central District of California,
Western Division.
99.2 Letter, dated October 13, 1999, from Riviera Holdings
Corporation to Contingent Value Right Holders.
99.3 Press Release, dated October 13, 1999.
DECHERT PRICE & RHOADS
Thomas F. Munno
30 Rockefeller Plaza
New York, New York 10112
Telephone: (212) 698-3513
Facsimile: (212) 698-3599
IRELL & MANELLA
Richard B. Kendall (90072)
Bruce A. Wessel (116734)
1800 Avenue of the Stars, Suite 900
Los Angeles, California 90067-4276
Telephone: (310) 277-1010
Facsimile: (310) 203-7199
Attorneys for Defendant and
Counterclaimant
RIVIERA HOLDINGS CORPORATION
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
WESTERN DIVISION
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)
ALLEN E. PAULSON, et al., ) Case No. 98-2644 ABC (AIJ)
)
Plaintiffs, ) SETTLEMENT BAR
) ORDER AND FINAL JUDGMENT
vs. )
)
JEFFERIES & COMPANY, INC., et al., )
)
Defendants. )
)
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)
RIVIERA HOLDINGS CORPORATION, )
a Nevada Corporation, )
)
Counterclaimant, )
)
vs. )
)
ALLEN E. PAULSON, an individual; and )
R&E GAMING CORP., a Delaware )
Corporation, )
)
Counterdefendants. )
)
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Defendant and counterclaimant Riviera Holdings Corporation (the
"Settling Defendant") is party to a Settlement Agreement dated as of July 2,
1999 (the "Settlement") with plaintiffs and counterdefendants Allen E. Paulson
and R&E Gaming Corp, and with plaintiffs Riviera Acquisition Sub, Inc., Elsinore
Acquisition Sub, Inc. and Carlo Corporation (collectively, the "Paulson
Plaintiffs"). Based on this Settlement, the Settling Defendant has moved for
entry of a bar order and final judgment ("Settlement Bar Order") dismissing and
prohibiting certain claims against the Settling Defendant and dismissing and
prohibiting certain counterclaims against the Paulson Plaintiffs. A hearing on
this motion having been held before this Court on October 4, 1999; each of the
non-settling defendants served with process in this action having been given an
opportunity to be heard after due notice; this Court having considered the
motion, all oppositions and other submissions and arguments by counsel, and the
pleadings, files, records and proceedings and hearings in this action; and this
Court otherwise being fully advised and informed; this Court enters the
following Order:
THE COURT, GOOD CAUSE APPEARING, HEREBY ORDERS, FINDS, CONCLUDES,
ADJUDGES AND DECREES THAT:
1. The Settlement between the Paulson Plaintiffs and the Settling
Defendant is hereby entered. The terms used in this Settlement Bar Order shall
have the same meanings as defined in the Settlement except as otherwise
specified herein.
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2. This Court has jurisdiction over the subject matter of this
litigation and all claims raised in this action, and, for purposes of this
Settlement Bar Order, over all of the Settling Parties and the Non-Settling
Defendants.
3. Pursuant to the Settlement and the Private Securities Litigation
Reform Act of 1995 (the "PSLRA"), 15 U.S.C. ss.78u-4(f)(7)(A), the Paulson
Released Claims and the RHC Released Counterclaims are hereby dismissed with
prejudice and are extinguished, discharged and otherwise satisfied.
4. Pursuant to the PSLRA, 15 U.S.C. ss.78u-4(f)(7)(A)(i), all claims,
actions, allegations, causes of action, demands or rights or claims, however
denominated, seeking contribution as that term is defined for purposes of the
PSLRA, or seeking indemnification for claims arising under the federal
securities laws or for state law claims arising out of the transactions
underlying the Paulson Plaintiffs' federal securities law claims, by any person,
including but not limited to the Non-Settling Defendants, against the Settling
Defendant and persons or entities in privity with the Settling Defendant, which
are based upon or which seek recovery of liability or damages ascertained or
obtained against any Non-Settling Defendant (either directly or indirectly) in
favor of any of the Paulson Plaintiffs and arising in any way out of this
action, are hereby extinguished, discharged and otherwise satisfied. Expressly
excluded from this provision is a claim made on an express contractual
undertaking to provide indemnification and indemnification claims that are
independent of the Paulson Plaintiffs' federal securities claims. This exclusion
is without prejudice to any available defenses to such claims.
5. Pursuant to the PSLRA, 15 U.S.C. ss.78u-4(f)(7)(A)(ii), all claims,
actions, allegations, causes of action, demands or rights or claims, however
denominated, seeking
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contribution as that term is defined by the PSLRA, or seeking indemnification
for claims arising under the federal securities laws or state law claims arising
out of the transactions underlying the Paulson Plaintiffs' federal securities
law claims, by the Settling Defendant and persons or entities in privity with
the Settling Defendant against any person (excepting only those persons whose
liability has been extinguished by the settlement of the Settling Defendant)
which are based upon or which seek recovery of liability (in whole or in part)
resulting or arising in any way (either directly or indirectly) from the Paulson
Released Claims, are hereby extinguished, discharged and otherwise satisfied.
Expressly excluded from this provision is a claim made on an express contractual
undertaking to provide indemnification and indemnification claims that are
independent of the Paulson Plaintiffs' federal securities claims. This exclusion
is without prejudice to any available defenses to such claims.
6. All persons, including but not limited to the Paulson Plaintiffs,
the Settling Defendant and the Non-Settling Defendants, and each of them, are
fully and forever barred and enjoined from instituting or prosecuting, either
directly or indirectly, any and all claims and matters set forth in Paragraphs
3, 4 and 5 above.
7. Subject only to the conditions set forth in the following
sub-paragraph 7(a), pursuant to the PSLRA, 15 U.S.C. ss.78u-4(f)(7)(B), the
Paulson Plaintiffs shall reduce the amount of any final verdict or judgment
obtained against any of the Non-Settling Defendants by the greater of: (i) an
amount that corresponds to the percentage of responsibility of the Settling
Defendant and the RHC Related Parties, or (ii) the amount paid to the Paulson
Plaintiffs by RHC under the Settlement, which amount shall be determined by the
Court.
a. The Court retains jurisdiction to make a determination that
apportionment of liability to the Settling Defendant is inappropriate or that
the portion or percentage of liability
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that any Non-Settling Defendant seeks to attribute to the Settling Defendant is
inappropriate or incorrect in any respect or manner. The Court also retains
jurisdiction to determine the "amount paid" to the Paulson Plaintiffs by the
Settling Defendant pursuant to 15 U.S.C. 78u-4(f)(7)(B)(ii).
8. Without in any way affecting the finality of this Settlement Bar
Order, the Court reserves jurisdiction over the litigation, this action, the
Paulson Released Claims, the RHC Released Counterclaims, the Paulson Plaintiffs,
the Settling Defendant and all of the Non-Settling Defendants for the purposes
of enforcing and administering this Settlement Bar Order.
9. Any finding of fact made in this Settlement Bar Order shall also be
deemed a conclusion of law, and any conclusion of law made in this Settlement
Bar Order shall also be deemed a finding of fact.
10. This Court determines that there is no just reason for delay of the
entry of the Settlement Bar Order because, inter alia: (i) this Settlement Bar
Order fully disposes of the claims of the Paulson Plaintiffs and the
Non-Settling Defendants against the Settling Defendant, (ii) any factual or
legal issues raised on possible appeal from this Settlement Bar Order would
likely be different from those, remaining in the case against the Non-Settling
Defendants, (iii) the Paulson Plaintiffs would be harshly and unjustly
prejudiced should this Settlement Bar Order not be entered forthwith, (iv) the
Settling Defendant would be harshly and unjustly prejudiced should this
Settlement Bar Order not be entered forthwith, and (v) the Contingent Value
Rights Holders would be harshly and unjustly prejudiced from delay in the
disbursement of their portion of the Escrow Consideration should this Settlement
Bar Order not be entered forthwith.
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Accordingly, the Court hereby directs entry of this Settlement Bar
Order as a final judgment pursuant to Rule 54(b) of the Federal Rules of Civil
Procedure.
IT IS SO ORDERED.
Dated: October 7, 1999
/s/ Audrey B. Collins
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THE HONORABLE AUDREY B. COLLINS
UNITED STATES DISTRICT JUDGE
Submitted by:
IRELL & MANELLA LLP
Richard B. Kendall
Bruce A. Wessel
1800 Avenue of the Stars, Suite 900
Los Angeles, CA 90067-4276
(310) 277-1010
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DECHERT PRICE & RHOADS
Thomas F. Munno
30 Rockefeller Plaza
New York, New York 10112
(212) 698-3500
Attorneys for Defendant and Counterclaimant
Riviera Holdings Corporation
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Riviera Holdings Corporation
Stock Repurchases
October 1999
Shares outstanding June 30, 1999 per Form 10Q 5,067,676
Repurchase of Paulson shares 10/12/99 (463,655)
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4,604,021
Repurchase of SunAmerica, (AIG) shares 10/14/99 (81,000)
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Shares outstanding after repurchase of
SunAmerica shares on 10/14/99 4,523,021
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Sunamerica ownership: # Shares %
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As of 6/30199 756,920 14.94%
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As of 10/12/99 756,920 16.44%
Repurchase 10/14/99 (81,000)
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As of 10/14/99 675,920 14.94%
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Acquisition cost at $7.50 per share as agreed $607,500.00
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Riviera Holdings Corporation
October 13, 1999
Dear Contingent Value Right Holder:
I am pleased to announce that Riviera Holdings Corporation has settled
the lawsuit brought by Allen Paulson against the Riviera and others. Pursuant to
the settlement, as a holder of Contingent Value Rights (CVR's) you will receive
$2.46 for each CVR from a down payment escrow account established by Mr. Paulson
in connection with the aborted Paulson/Riviera merger.
Among the reasons for the Riviera Board to approve the settlement were:
(1) The desirability of having CVR holders receive their money now
rather than waiting for final resolution of the litigation, which
could take many months or years;
(2) The CVR holders will no longer be subject to the risk of an
adverse decision that would result in no CVR recovery.
You should deliver to our stock transfer agent, American Stock Transfer
Company ("ASTC"), 40 Wall Street-46th Floor, New York, New York 10005, the
attached ASTC form and your CVR's. Upon receipt of the filled out ASTC form and
your CVR's, ASTC will mail a check to you or as otherwise directed by you. See
Paragraph 9 of the "Instructions For Letter of Transmittal" if you lost or
misplaced or certificates.
You should consult your own tax advisor as to the appropriate treatment
for tax purposes of the CVR payment you will receive.
Very truly yours,
RIVIERA HOLDINGS CORPORATION
William L. Westerman, Chairman
NEWS Riviera Holdings Corporation
BULLETIN 2901 Las Vegas Boulevard South
Las Vegas, NV 89109
FROM: Investor Relations: (800) 362-1460
Fax: (702) 794-9442
[GRAPHIC OMITTED] Hotel: (702) 734-5110
TRADED: AMEX - RIV
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The Financial Relations Board, Inc.
FOR FURTHER INFORMATION:
AT THE COMPANY: AT FINANCIAL RELATIONS BOARD:
Duane Krohn, Secretary, Treasurer and CFO Don Markley, Virginia Turner (media)
(702) 794-9527 Kristi Larson (investors)
Email: [email protected] (415) 986-1591
FOR IMMEDIATE RELEASE:
RIVIERA ANNOUNCES SETTLEMENT OF LAWSUIT
LAS VEGAS, NV - Wednesday, October 13, 1999 -- Riviera Holdings Corporation
(AMEX: RIV), announced today that the lawsuit brought by Allen Paulson against
Riviera, its major stockholders, Elsinore Corporation and Jefferies & Company in
the Federal District Court for the Central District of California had been
settled with Riviera, but not the other parties. Pursuant to the settlement and
effective October 13, 1999, the holders of its Contingent Value Rights ("CVR's")
will receive approximately $2.46 for each CVR from a down payment escrow
established by Mr. Paulson in connection with the aborted Paulson / Riviera
merger. Of the $5.9 million in the down payment escrow, approximately $4.4
million will be distributed to the holders of the 1,770,000 CVR's and $1.5
million has been returned to Mr. Paulson.
In addition, as part of the settlement, Riviera has repurchased 463,655 shares
of its common stock owned by Mr. Paulson for $7.50 per share or $3,477,413.
After this repurchase, Riviera has 4.6 million shares outstanding.
An independent majority of Riviera's Board of Directors approved the settlement
as in the best interest of Riviera, its stockholders and the holders of the
CVR's. Two of the directors own no CVR'. Contrary to press reports, Robert
Barengo, A Riviera Director owns only a relatively small number of CVR's.
William L. Westerman, Chairman of Riviera's Board, who owns a substantial number
of CVR's did not participate in the Board discussion or decision to approve the
settlement.
The reasons, for the Riviera Board approval include (1) ending the substantial
cost to Riviera of defending the lawsuit, (2) the desirability of having CVR
holders receive their money now rather than waiting for final resolution of the
litigation which may take many months or years (the other major Riviera
stockholders who are defendants in the law suit have already had the use of the
Paulson down payment since April 1998), (3) the CVR holders will no longer be
subject to the risk of an adverse decision in the litigation which could result
in no CVR recovery and (4) the repurchase of Mr. Paulson's stock will facilitate
and reduce the cost of licensing Riviera Black Hawk, Inc. in Colorado.
About Riviera Holdings:
Riviera Holdings Corporation owns and operates the Riviera Hotel and Casino on
the Las Vegas Strip and is developing a casino in Black Hawk, Colorado. Riviera
is traded on the American Stock Exchange under the symbol RIV.
