 Newsletter Signup
Stay informed with the
NEW Casino City Times newsletter! |
Gaming News
Allegiance Capital Amends Lawsuit Against Great Canadian Gaming16 May 2003DALLAS, Texas -- (Press Release) -- Allegiance Capital Corporation, a Dallas-based investment banking firm, today announced that it has received court approval to amend the lawsuit that it recently filed against Great Canadian Gaming Corporation (TSX Venture Exchange:GCD.V), Great Canadian Casinos, Inc., and two top executives of the Richmond, British Columbia, Canada-based companies, Ross McLeod and Michael Scholz, to include allegations that the defendants have violated the federal Racketeering Influenced and Corrupt Organization Act (RICO Act) and the stock transaction fraud provisions of the Texas Business and Commerce Code. The amended filing by Allegiance Capital came after the case was removed from State District Court in Dallas, Texas to the U.S. District Court for the Northern District of Texas in Dallas. The original lawsuit alleges fraud, breach of fiduciary duty, conversion and conspiracy in connection with Allegiance Capital's investment in a business venture promoted by the defendants in 2000 that purportedly intended to establish a cruise ship-based casino operation in Hong Kong. The defendants, the lawsuit alleges, subsequently failed to operate the business venture or the cruise ship in accordance with the parties' original agreement. In particular, Allegiance Capital alleges that the defendants unilaterally - and without the knowledge or consent of Allegiance Capital - allowed a Taiwanese businessman to rename the vessel, move it to Taiwan, and use it as a base of operations to engage in the business of prostitution. Allegiance Capital's concerns about the status of the cruise ship were heightened when NEXT Magazine, a Taiwanese publication, ran a story entitled "Prostitution at Sea" dated October 17, 2002. The article detailed how the vessel is being used for short cruises that offer passengers opportunities to gamble and employ prostitutes who reportedly live aboard the cruise ship for extended periods of time. The amended complaint, which was accepted by the court on May 7, 2003, contends that the defendants' actions violate certain provisions of the federal RICO Act and the Texas Business and Commerce Code, and includes new allegations of mail and wire fraud, securities fraud and conversion of a capital asset for illegal use. Allegiance Capital's amended claim for damages is comprised of $3.1 million for loss of its original investment and $28 million in lost profits, combined with a request that the actual damage awarded be tripled, as allowed by the RICO Act. The amended complaint also requests that the defendants be required to pay exemplary damages. |