SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 28, 2002
PRIME HOSPITALITY CORP.
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(Exact name of registrant as specified in its charter)
Delaware 1-6869 22-2640625
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
700 Route 46 East
Fairfield, New Jersey 07004
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(Address of principal executive offices) (Zip Code)
(973) 882-1010
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(Registrant's telephone number, including area code)
Item 5. Other Events.
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On June 28, 2002, the American Arbitration Association rendered a decision
with respect to an action brought by Sholodge Inc. ("Sholodge") against Prime
Hospitality Corp. ("Prime") seeking monetary damages in connection with the
termination by Prime of its contract with Sholodge to use Sholodge's reservation
system for Prime's AmeriSuites and Wellesley Inns and Suites hotels. The
decision awarded Sholodge $8.9 million in damages. This judgment is not covered
by insurance and exceeds Prime's current available litigation reserves by
approximately $4.5 million. Accordingly, Prime expects to record a charge of
approximately $4.5 million against its pre-tax earnings ($2.7 million after tax)
for the second quarter of 2002. Prime is currently reviewing its options to
appeal the decision.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PRIME HOSPITALITY CORP.
By: /s/ Douglas Vicari
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Name: Douglas Vicari
Title: Chief Financial Officer
Date: July 12, 2002