One PDS merger suit dismissed

Friday, April 25, 2003 | 11:28 a.m.

PDS Gaming Corp., which was the subject of three lawsuits filed by shareholders to block a $98 million plan by its three top executives to buy out the Las Vegas gaming company, said today one of the lawsuits was voluntarily dismissed.

PDS shareholder Ken Adelson had sued PDS and Johan Finley, its chairman and chief executive, Peter Cleary, its president and chief operating officer and Lona Finley, its executive vice president, in Clark County District Court. The defendants were accused of violating their fiduciary duties to maximize shareholder values by trying to acquire the company at an "unfair price, under unfair terms, through improper means, and with inadequate disclosure."

But PDS, which said the allegations are "without merit," said a special committee of the company's independent directors and the three executives are negotiating an agreement to sell the company.

The proposed agreement is subject to approval by the special committee, the company's commercial lenders and trustees under the indentures covering the company's outstanding debt securities. The agreement also requires the approval of state gaming regulatory agencies, the obtaining of necessary financing, and a favorable fairness opinion from an investment bank.

Two other lawsuits, filed by PDS shareholders David Carlson and Robert Struogo alleging similar claims, are still pending.