Empire Resorts in default, must honor put options exercised for 5.5% convertibles, court rules

By Angela McDaniels

Tacoma, Wash., April 12 - Empire Resorts, Inc. is in default for not honoring the put option exercised for $65 million of its 5.5% senior convertible notes due 2014 on July 31, 2009 and must now repurchase the put convertibles, according to an 8-K filing with the Securities and Exchange Commission.

The decision was rendered on Thursday by the Supreme Court of the State of New York in Sullivan County. The defendants were the Bank of New York Mellon Corp. and the Depository Trust Co.

The company is working with its financial adviser, Merrill Lynch, Pierce, Fenner & Smith Inc., and its legal counsel to consider its available financial and legal alternatives in response to the court decision.

In May 2009, the company warned that it did not have the cash to repurchase the convertibles if they were put.

In August 2009, Empire Resorts said it did not receive election forms from the indenture trustee for the put option and therefore had no obligation to repurchase the notes.

Empire Resorts is a Monticello, N.Y.-based operator of the Monticello Casino & Raceway.

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