Churchill Downs Incorporated and Aristocrat Leisure Limited Announce Agreement in Principle to Settle Lawsuits related to Big Fish Games, Inc.
Churchill Downs Incorporated (CHDN) and Aristocrat Leisure Limited announced a proposed settlement for the Kater and Thimmegowda lawsuits, contingent on U.S. District Court approval. The settlement involves a total payment of $155 million, with CHDN contributing $124 million and Aristocrat $31 million. This agreement includes a release of claims against CHDN related to the lawsuits. This follows CDI's sale of Big Fish Games to Aristocrat in January 2018. The company continues to lead in the racing and gaming industry, particularly with the Kentucky Derby and its online wagering platforms.
- Settlement of $155 million reduces legal uncertainties for CHDN.
- CDI's contribution of $124 million indicates strong cash reserves to handle litigation costs.
- Settlement payment could impact cash flow and financial resources.
LOUISVILLE, Ky., May 24, 2020 (GLOBE NEWSWIRE) -- Churchill Downs Incorporated (“CDI”) (Nasdaq: CHDN) and Aristocrat Leisure Limited (ASX: ALL) ("Aristocrat") today announced that they have entered into an agreement in principle to settle the Kater v. Churchill Downs, Inc., and Thimmegowda v. Big Fish Games, Inc. lawsuits (the “Kater and Thimmegowda Litigations”). CDI completed its sale of Big Fish Games, Inc. to Aristocrat in January 2018. The agreement in principle remains contingent on final court approval by the U.S. Federal District Court for the Western District of Washington (the “District Court”).
Under the terms of the settlement, which will take effect only after final court approval of the proposed class settlement:
- A total of USD
$155 million will be paid into a settlement fund. CDI will pay USD$124 million of the settlement from its available cash. Aristocrat will pay USD$31 million of the settlement. - All members of the nationwide settlement class who do not exclude themselves will release all claims relating to the subject matter of the lawsuits.
- Aristocrat has agreed to specifically release CDI of any and all indemnification obligations under the Stock Purchase Agreement dated November 29, 2017, between CDI, Aristocrat, and Big Fish Games, Inc. arising from or related to the Kater and Thimmegowda Litigations, including any claims of diminution of value of Big Fish Games, Inc. and any claims by any person who opts out of the proposed class settlement.
- The parties have agreed to provide notice to the District Court that the parties have reached a settlement in principle and to request that the cases be stayed pending execution and filing of a formal settlement agreement.
About Churchill Downs Incorporated
Churchill Downs Incorporated (the "Company", "we", "us", "our") is an industry-leading racing, online wagering and gaming entertainment company anchored by our iconic flagship event - The Kentucky Derby. We own and operate Derby City Gaming, a historical racing machine facility in Louisville, Kentucky. We also own and operate the largest online horse racing wagering platform in the U.S., TwinSpires.com, and we operate sports betting and iGaming through our BetAmerica platform in multiple states. We are also a leader in brick-and-mortar casino gaming with approximately 11,000 slot machines and video lottery terminals and 200 table games in eight states. Additional information about CDI can be found online at www.churchilldownsincorporated.com.
Information set forth in this news release contains various “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Act”), which provides certain “safe harbor” provisions. All forward-looking statements made in this news release are made pursuant to the Act. Forward-looking statements are typically identified by the use of terms such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “predict,” “project,” “seek,” “should,” “will,” and similar words, although some forward-looking statements are expressed differently.
Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. Important factors that could cause actual results to differ materially from expectations include the following: the impact of the novel coronavirus (COVID-19) pandemic and related economic matters on our results of operations, financial conditions and prospects; the effect of economic conditions on our consumers' confidence and discretionary spending or our access to credit; additional or increased taxes and fees; public perceptions or lack of confidence in the integrity of our business or any deterioration in our reputation; loss of key or highly skilled personnel; restrictions in our debt facilities limiting our flexibility to operate our business; general risks related to real estate ownership, including fluctuations in market values and environmental regulations; catastrophic events and system failures disrupting our operations; online security risk, including cyber-security breaches; inability to recover under our insurance policies for damages sustained at our properties in the event of inclement weather and casualty events; increases in insurance costs and inability to obtain similar insurance coverage in the future; inability to identify and complete acquisition, expansion or divestiture projects, on time, on budget or as planned; difficulty in integrating recent or future acquisitions into our operations; costs and uncertainties relating to the development of new venues and expansion of existing facilities; risks associated with equity investments, strategic alliances and other third-party agreements; inability to respond to rapid technological changes in a timely manner; inadvertent infringement of the intellectual property of others; inability to protect our own intellectual property rights; payment-related risks, such as risk associated with fraudulent credit card and debit card use; compliance with the Foreign Corrupt Practices Act or applicable money-laundering regulations; risks related to pending or future legal proceedings and other actions; inability to negotiate agreements with industry constituents, including horsemen and other racetracks; work stoppages and labor issues; changes in consumer preferences, attendance, wagering and sponsorship with respect to Churchill Downs Racetrack and the Kentucky Derby; personal injury litigation related to injuries occurring at our racetracks; weather and other conditions affecting our ability to conduct live racing; the occurrence of extraordinary events, such as terrorist attacks and public health threats; changes in the regulatory environment of our racing operations; increased competition in the horse racing business; difficulty in attracting a sufficient number of horses and trainers for full field horse races; our inability to utilize and provide totalizator services; changes in regulatory environment of our online horse wagering business; number of people wagering on live horse races; increase in competition in our online horse racing wagering business; uncertainty and changes in the legal landscape relating to our online horse racing wagering business; continued legalization of online sports betting and iGaming in the United States and our ability to predict and capitalize on any such legalization; inability to expand our sports betting operations and effectively compete; failure to manage risks associated with sports betting; failure to comply with laws requiring us to block access to certain individuals could result in penalties or impairment with respect to our mobile and online wagering products; increased competition in our casino business; changes in regulatory environment of our casino business; concentration and evolution of slot machine manufacturing and other technology conditions that could impose additional costs; and inability to collect gaming receivables from the customers to whom we extend credit
Nick Zangari
(502) 394-1157
Nick.Zangari@kyderby.com
FAQ
What is the total settlement amount in the Kater and Thimmegowda lawsuits?
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Is the settlement for the Kater v. Churchill Downs lawsuits final?
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