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TERMINATED PROJECTS AND SETTLEMENT LOSS
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12 Months Ended |
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Dec. 31, 2014
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| Restructuring and Related Activities [Abstract] | |
| TERMINATED PROJECTS AND SETTLEMENT LOSS |
10. TERMINATED PROJECTS AND SETTLEMENT LOSS
Keeneland Association, Inc. On February 26, 2014, we entered into an exclusivity agreement with Keeneland to own, manage, and operate instant racing and, if authorized, traditional casino gaming at racetracks in Kentucky, subject to completion of definitive documents for each opportunity. On June 12, 2014, we executed an amendment to the exclusivity agreement extending the term to June 30, 2019. On November 17, 2014, we entered into a Termination Agreement with Keeneland to terminate all agreements between us and Keeneland. In connection therewith, Keeneland (i) released and discharged the Company, its officers, directors and employees, agents and any other person or entity that may be responsible for any acts or omissions of the Company and (ii) agreed to indemnify and hold the Company and its officers, directors, agents and employees harmless from any obligations arising under the agreements between us. Keeneland also paid us $200,000 in connection with the termination of the agreements, offsetting a similar earlier payment and fees incurred by the Company.
Majestic Star. On March 21, 2014, we entered into a definitive agreement (the “Majestic Star Purchase Agreement”) with The Majestic Star Casino LLC (“Majestic Star”) and Majestic Mississippi, LLC (“Majestic Mississippi”) to acquire from Majestic Star all of the outstanding membership interests of Majestic Mississippi, which operates a casino located in Tunica, Mississippi, commonly known as the Fitz Tunica Casino & Hotel, for a purchase price of $62.0 million, subject to certain closing adjustments. The Company had deposited into escrow an amount of $1.75 million, which was to be credited toward the purchase price at closing.
On May 7, 2014 we informed Majestic Star of our financing efforts and our belief that we would not be successful in obtaining financing for the purchase of Majestic Mississippi. On June 23, 2014, we terminated the Majestic Star Purchase Agreement on the basis of our inability to obtain financing for the purchase. On June 25, 2014, Majestic Star notified us that it believed that the Majestic Star Purchase Agreement remained in effect and disputed its termination. Additionally, Majestic Star disputed the release to us of the $1.75 million held in escrow, pursuant to the terms of the Majestic Star Purchase Agreement.
On July 28, 2014 Majestic Star notified us that the Majestic Star Purchase Agreement was terminated pursuant to Section 8.1(c) (breach of representation or warranty) or 8.1(d) (failure to obtain a gaming license) and demanded the release of the escrowed funds to Majestic Star. On August 8, 2014, Majestic Star and Majestic Mississippi filed a complaint against the Company in the Circuit Court of Tunica County, Mississippi alleging damages for breaches of the Majestic Star Purchase Agreement by the Company (the “Lawsuit”). On August 21, 2014, Majestic Star, Majestic Mississippi and the Company entered into a settlement agreement to resolve all disputes, including the dismissal with prejudice of the Lawsuit, and mutually released each other and their respective officers, directors, and employees from any claims, demands or actions for damages related thereto. Pursuant to the terms of the settlement agreement, Majestic Star and Majestic Mississippi received $1.7 million of the funds held in escrow and the Company received $50,000. Additionally, Majestic, Majestic
Mississippi and the Company agreed that the Majestic Star Purchase Agreement was terminated.
On November 25, 2014, the Company reached an agreement with one of its advisors on the Majestic Star transaction. The advisor agreed to reimburse the Company $0.25 million which was included as a reimbursement of fees incurred in conjunction with the advisor’s services to the Company during 2014.
We also incurred $0.6 million of registration costs in conjunction with the attempted financing of this purchase, which were included in selling, general and administrative expenses.
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