Empire Resorts Embroiled in Shareholder Lawsuit
Empire resorts is facing a lawsuit from one of its shareholders. This comes after they allegedly colluded with Genting to undervalue the Resorts Cat Skills in order to secure a quick sale. Empire Resorts owns the New York City casino resort which they have now sold to Genting. The lawsuit filed by a minor shareholder of the sold casino details the grievances. What has been the response from the buyer and seller? Is there any truth in the allegations made by the shareholder? The shareholder accuses empires of the acceptance of not giving all shareholders enough information about the deal. Genting Malaysia and executives with Empire resource pedigreed verbally and in principle to sell the property for just over $128 million . David Meulen the shareholder initiating the lawsuits alleges that empire resorts deliberately undervalued the stock so that they could have a quicker sale which would benefit only the executive board.
He further states that empire resorts executive along with Genting Malaysia manipulated the situation to that other no other leaders could make an offer to buy resort cats kills. Although there was no barring of other bidders Meulen says that the feelings and financial statements made by Empire resorts deterred other leaders from making offers. This in turn destroyed the shareholders chances of getting better games through a sale of resorts Catskills. When the agreement was made in August, Empire’s share price was flatlined at around $9.70 with only minor movement seen. It was also right after a single-day drop from $9.34 to $8.18.
Empire has not been having a good run financially. They recently acquired the embattled race track which has not been doping too well. Now this lawsuit is a just another thorn in their flesh they do not need. The company saw a loss of $138.8 million, which may have pushed executives into action to find a buyer that could take the company private. They found that solution in Genting. The company’s controlling shareholder, Lim Kook Thay, already owned Empire shares through the Kien Huat Realty III trust. That trust would purchase all outstanding shares, according to the arrangement, at a price of $9.74 per share for $13.2 million common stock shares. Genting would control 49% of the company, while the trust would control the remaining 51%.