Oct 18, 2019 Newsdesk Latest News, Rest of Asia, Top of the deck, World
Casino operator Genting Malaysia Bhd says a lawsuit against a proposed merger of United States-based casino firm Empire Resorts Inc is “without merit”, and that all the respondents named in the lawsuit “plan to defend against all claims stated therein”. The information was included in a Thursday filing to Bursa Malaysia.
In August, loss-making Empire Resorts said it had agreed to a merger deal to take the firm private. Empire Resorts is the operator of Resorts World Catskills (pictured) in New York state.
Under the deal, affiliates of Kien Huat Realty III – the family trust of Lim Kok Thay, a businessman who is the controlling shareholder of the Genting group – would along with Genting Malaysia acquire all of the outstanding equity of Empire Resorts not currently owned by Kien Huat or its affiliates.
In October it was reported that a minor shareholder in Empire Resorts was suing the company, claiming that group’s stock had been undervalued under the terms of the privatisation bid.
In Thursday’s filing, Genting Malaysia confirmed that a class action complaint challenging the merger had been filed in the New York State Supreme Court on October 8, 2019.
According to the filing, the litigation alleges that the members of the board of Empire Resorts breached their fiduciary duties in connection with the negotiation and approval of the merger agreement. It also claims that all parties involved “aided and abetted” the Empire Resorts board’s alleged breaches of fiduciary duty.
“The defendants deny all such allegations, believe the merger litigation is without merit, and plan to defend against all claims stated therein,” stated Genting Malaysia.
The casino operator had previously defended its decision to invest in Empire Resorts, saying it had “deemed it a worthwhile investment based on numerous factors”.
The company said in a filing in August that the deal would place the Malaysia-based firm “in a position to more deeply access the New York market and provide both Genting Malaysia and Empire Resorts the opportunity to compete more effectively in northeastern U.S. region’s current competitive gaming landscape.”
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