When Global Gaming Asset Management announced last week it was going to sell its stake in Bloomberry Resorts, the owner of the Solaire resort in Manila, it certainly wasn’t a surprise. After all, Bloomberry principal Enrique Razon dismissed the group he brought on the manage the casino at the same time he fired the original general manager, Michael French. A suit filed by GGAM was to be heard in Singapore, not in Manila, so Razon and GGAM were destined to part ways
What was surprising was the response of the investment community. Bloomberry shares plunged when GGAM announced that it had sold its 8.7 percent share of the company. Bloomberry officials asked the Philippine Stock Exchange to suspend the trading of its shares to ensure that the purchasers would be unaffected by the settlement of its dispute with GGAM.
Bloomberry said it needed to confirm that the buyers of the shares would be unaffected by arbitration proceedings meant to settle its dispute with GGAM.
Bloomberry won a temporary 20-day restraining order from the Regional Trial Court of Makati in Manila to block the sale.
Bloomberry ended its management agreement with GGAM in September, saying GGAM had failed to manage the Solaire casino-resort effectively. GGAM objected and asked arbitrators in Singapore to settle the argument.
“They turned out to be a very expensive, glorified executive-search firm,” Razon said in September after the split.
Former Las Vegas Sands President Bill Weidner, the founder of GGAM, said the company had the right to sell the shares.
“We purchased and paid for our stock in Bloomberry entirely appropriately, and we own that stock,” Weidner told the Macau Business Daily. “Clearly, we are entitled to the full rights of any shareholder, including the right to sell.”
Bloomberry object to the sale to approximately 50 institutional investors, and don’t want them owned by other investors until the GGAM lawsuit is adjudicated.
“These shares are subject of a counterclaim by BRHI (Bloomberry Resorts and Hotels Inc.)… in the arbitration case,” said Bloomberry in a filing to the Philippine Stock Exchange.
GGAM said Bloomberry’s reasons for cutting ties with the management company were insufficient and that the claims were “not factually or legal valid,” saying Bloomberry was upset at the venue of the complaint, Singapore.
“In every way, GGAM has acted properly and the allegations by Bloomberry are simply wrong,” said the company. “We expect its claim to be denied.”
