December 15, 2014

Arbitration panel lifts court injunction on sale of BLOOM shares

In a disclosure to the Exchange today, Bloomberry Resorts Corp (BLOOM) today said the Arbitration Tribunal has revoked a court injunction on Global Gaming Asset Management (GGAM) thereby allowing the latter to freely dispose of 921.18m BLOOM shares.

However, the tribunal also denied the request of GGAM to declare it as the legal and beneficial owner of such shares as well as its request to stop Bloombery Resorts Hotel Inc and Sureste Properties Inc from taking any legal action that will prevent GGMA from selling the shares.

Recall that the said shares were part of GGAM’s compensation for managing BLOOM’s casino facility but this hinged on the achievement of certain performance benchmarks. The major shareholders of BLOOM claimed that GGAM did not deliver on the performance standards and thus they put a counterclaim on such shares.

Our take: While we keep a positive view on BLOOM’s prospects and fundamentals, we believe that the arbitration proceedings did not clearly settle the ownership issue and this will remain an overhang on BLOOM’s shares. – WealthSec