Arbitration Decision Issued in Colonial Downs - Norglass Construction Dispute.NEW KENT, Va.--(BUSINESS WIRE)--Aug. 13, 1999-- Colonial Downs Colonial Downs is a horse racing track in New Kent, Virginia adjacent to Interstate 64, halfway between Richmond, Virginia and Williamsburg, Virginia. History and information The track opened on September 1, 1997. More than 13,000 attended the track on opening day. Holdings, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : Small Cap: CDWN) which, through its subsidiaries, holds the only unlimited licenses to own and operate a pari-mutuel horse racing horse racing, trials of speed involving two or more horses. It includes races among harnessed horses with one of two particular gaits, among saddled Thoroughbreds (or, less frequently, quarterhorses) on a flat track, or among saddled horses over a turf course with course and satellite wagering facilities in Virginia, has been engaged in a contract dispute under the Construction Agreement, dated February 10, 1997 (the "Construction Contract") between Colonial Downs, L.P. (the "Partnership"), a subsidiary of the Company, and Norglass, Inc. ("Norglass"), a related party. Pursuant to the terms of the Construction Contract, the Partnership filed a claim before a three person panel of the American Arbitration Association The American Arbitration Association (AAA) is a private enterprise in the business of arbitration, and one of several arbitration organizations that administers arbitration proceedings. The AAA also administers mediation and other forms of alternative dispute resolution. ("AAA AAA: see American Automobile Association. (Triple A) A common single-cell battery used in a myriad of electronic devices of all variety. Like its double A (AA) cousin, it provides 1.5 volts of DC power. When used in series, the voltage is multiplied. ") against Norglass, the general contractor A general contractor is an organization or individual that contracts with another organization or individual (the owner) for the construction of a building, road or any other execution of work or facility. engaged to manage the original construction of the Company's New Kent County Virginia racetrack. In the proceeding, the Company challenged the validity of Norglass' mechanic's liens for approximately $11.8 million (subsequently reduced to $6.5 million) and asserted a damage claim against Norglass for approximately $7.7 million. Norglass filed a counterclaim A claim by a defendant opposing the claim of the plaintiff and seeking some relief from the plaintiff for the defendant. A counterclaim contains assertions that the defendant could have made by starting a lawsuit if the plaintiff had not already begun the action. against the Partnership for $5.8 million (as announced in a hearing on December 14, 1998). Yesterday the AAA panel issued its decision in which, among other matters, it denied the Partnership's claim and granted Norglass' counterclaim in the amount of $1,965,000 against the Partnership (plus interest at prime plus 2% from December 27, 1997). The panel also ordered the Partnership to reimburse Norglass approximately $97,700 for the arbitration panel's fees and expenses and certain AAA administrative fee and expenses. Norglass is an affiliate of a major stockholder in Colonial Downs. "We are obviously disappointed by the arbitration panel's decision. However, the Company will continue to honor its legal obligations. The Company has a strong balance sheet with several unencumbered Unencumbered Property that is not subject to any creditor claims or liens. Notes: For example, if a house is owned free and clear (meaning the owner owes no mortgage to anyone), it is unencumbered. assets and other means to secure the funds necessary," stated Company CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Jeffrey P. Jacobs. Statements regarding sources of funds and certain other statements contained in this news release are forward-looking statements and, as such, involve known and unknown risks, uncertainties and other factors which may cause the actual results of the Company to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. Such potential risks, uncertainties and factors include but are not limited to the risk of unforeseen governmental regulations, including licensing of and approvals by the Virginia Racing Commission and localities, competition from other sporting events and forms of entertainment, and the success of planned marketing and promotional efforts. Investors are also directed to consider other risks and uncertainties discussed in documents filed by the Company with the Securities and Exchange Commission. Colonial Downs Holdings, Inc. is a Virginia corporation organized in November 1996 to pursue opportunities for horse racing wagering in Virginia. Through its subsidiaries, the Company holds the only unlimited licenses to own and operate a pari-mutuel horse racing course and satellite wagering facilities/racing centers in Virginia. Colonial Downs Holdings, Inc. became a publicly held company in March 1997 and trades on the NASDAQ SmallCap System under the symbol CDWN. |
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