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Largest Shareholder in Riviera Sells Huge Block of Stock

A recent filing with the Securities and Exchange Commission indicates Morgens Waterfall now controls 485,000 shares of Riviera stock, a 10.72 percent stake. In February, Morgens Waterfall reported holdings of 1.12 million shares, a 24.9 percent stake.

The filing did not indicate when the sales occurred or at what price.

Morgens Waterfall has been embroiled in a bitter legal battle with Riviera over the company's settlement of a lawsuit related to its failed merger in 1998. California businessman Allen Paulson sued Riviera and its largest shareholders, including Morgens Waterfall, accusing them of deceiving him into buying a financially struggling company. Paulson terminated the agreement in March 1998.

In October, Riviera won approval for a $9.4 million settlement with Paulson -- a settlement that did not indemnify Morgens Waterfall or other large shareholders. Morgens Waterfall has a lawsuit pending against Riviera in Nevada federal court, in which it seeks indemnification from any legal claims by Paulson.

Separately, Chicago stockholder and private investor Stephen Taylor reported holdings of 203,500 shares in Riviera, a 5.2 percent stake. Taylor acquired his shares for $1.29 million over the past two months through purchases on the open market.

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