Alpha Hospitality, Catskill Development Appeal Park Place Judgment

MONTICELLO, NY— Affiliates of Alpha Hospitality and Catskill Development— long involved in litigation against Park Place Entertainment Corp.— are reported to be appealing a District Court decision dismissing certain claims and granting summary judgment against them on the remaining claim. It was noted that, in April of 2000, members of the St. Regis Mohawk Indian tribe in New York filed a $12-billion suit against Park Place, alleging “fraud, deceit, undue influences and promises of a quick dollar” to get casino development rights at this location. Alpha Hospitality and Catskill reportedly joined the suit in November of 2000. In July of 2001, Alpha Hospitality was cited as saying a New York District Court judge cleared the way for a legal challenge to Park Place’s efforts to block the proposed $505-million St. Regis Mohawk casino in Monticello. It was further stated that, in August of 2002, a U.S. District Court judge granted a motion for summary judgment by Park Place Entertainment, and Alpha Hospitality expects to file briefs on the appeal within the next 60 days. The purported letter of intent is said to provide for the company to establish a litigation trust into which all of the claims are to be transferred. The company is similarly to provide the litigation trust with a non-refundable line of credit of $2.5 million toward the payment of any future costs of the litigation. Moreover, the company is to distribute undivided proportionate interests in the trust to all shareholders of record immediately following the closing of the transaction. The letter of intent is described as being subject to the execution of definitive agreements, approvals by the company’s board and an opinion that the transaction will be tax-free to all parties, as well as other technical requirements, including a fairness opinion. Last month, it was claimed Alpha Hospitality received a de-listing notice because it failed to hold its 2002 annual meeting within the prescribed period of time. Alpha Hospitality was quoted as saying at the time that it intended to appeal the notice, and reportedly said it has since scheduled its 2002 annual meeting for March 25. It was further pointed out the closing of the transaction is scheduled to occur within 30 days of approval by shareholders at its 2003 annual meeting, which is similarly slated to occur within 120 days.