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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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): December 22, 1998
Commission file number: 333-49691
THE RESORT AT SUMMERLIN, LIMITED PARTNERSHIP
THE RESORT AT SUMMERLIN, INC.
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(Exact name of registrant as specified in its charter)
Nevada 86-0857506
Nevada 86-0857505
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(Name or other jurisdiction (IRS Employer
of incorporation) Identification No.)
1160 Town Center Drive, Suite 200, Las Vegas, NV 89134
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(Address of principal executive offices) (Zip Code)
(702) 869-7000
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Registrant's telephone number, including area code
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ITEM 5. OTHER INFORMATION
On December 22, 1998 The Resort at Summerlin, Inc. ("RAS") and The
Resort at Summerlin, Limited Partnership (the "Partnership" and collectively
with RAS, the "Registrants") executed a Settlement Agreement (the "Settlement
Agreement") with J.A. Jones Construction ("Jones") concerning a dispute which
had arisen with respect to the cost and timing of the completion of the Resort
Casino being developed by the Registrants. This dispute previously was described
in the Company's Form 10-Q Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934 for the quarterly period ended September 30,
1998 and filed with the United States Securities and Exchange Commission on
November 16, 1998. Pursuant to the Settlement Agreement, the Partnership will
execute change orders and pay to Jones an additional $23.0 million (inclusive of
$3.0 million previously budgeted for the completion of the second hotel at the
Resort Casino) for the completion of the Resort Casino, as set forth in the
Construction Contract and including additional work as set forth in the change
orders and the Settlement Agreement. In consideration of the execution of the
change orders and the additional payments by the Partnership, the Registrants
will not be responsible for any additional project costs necessary to accomplish
substantial completion of the Resort Casino on or before April 30, 1999 except
as otherwise expressly set forth in the Settlement Agreement. Jones will be
solely responsible, and indemnify the Registrants, for all costs of substantial
completion except as otherwise expressly provided in the Settlement Agreement.
If substantial completion of the Resort Casino
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has not occurred on or before April 30, 1999, all delay and other penalties
provided for in the Construction Contract shall commence as of April 30, 1999
and Jones shall not be entitled to any amounts for general conditions or any
other payments of a similar nature from that date unless certain savings
specified in the Construction Contract are achieved. In the Settlement
Agreement, Jones has represented that it has reviewed all of the construction
documents and determined that the Resort Casino, including the second hotel, can
be constructed "in a fashion and of a functionality, quality and level of
aesthetics reasonably inferable from the architects' design to create a
five-star rated property" and that Jones does not know of any reason that the
Resort Casino cannot be constructed as described in the Settlement Agreement or
substantially completed on or before April 30, 1999 for the amount set forth in
the Construction Contract as modified by the Settlement Agreement.
In addition to the payment of the Settlement Amount, the Settlement
Agreement provides that depending upon Jones' profit under the Construction
Contract as determined pursuant to accounting methodology set forth therein,
Jones may be entitled to a bonus of up to $1.0 million provided that the Resort
Casino is substantially completed on or before April 30, 1999 and Jones meets
interim construction progress milestones. The Settlement Agreement provides that
under no circumstances shall the bonus exceed $1.0 million; no bonus shall be
paid if the project is not substantially completed on or before April 30, 1999;
and that the maximum potential bonus shall
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be subject to a $200,000 reduction for each of the progress milestones which are
not met by Jones. In conjunction with the execution of the Settlement Agreement,
the Partnership has received an additional $8.5 million equity contribution from
Swiss Casinos Holding, A.G. ("SCH"), an affiliate of Swiss Casinos of America
("SCA"), in exchange for a 17.0% partnership interest in the Partnership. SCA
and SCH now own an aggregate 93.5% partnership interest in the Partnership.
The Registrants believe that the Settlement Agreement will result in the
opening of Resort Casino to the public on or before April 30, 1999 and that
terms of the Settlement Agreement are consistent and in compliance with all
applicable contractual covenants and obligations to which the Registrants are
bound including, but not limited to, pursuant to the December 30, 1997 Credit
Agreement and the December 31, 1997 Indenture with respect to the Registrants'
13% Senior Subordinated PIK Notes due 2007.
ITEM 7. EXHIBITS
Exhibit 10.1 December 22, 1998 Settlement Agreement among J.A.
Jones Construction, The Resort at Summerlin, Inc.
and The Resort at Summerlin, Limited Partnership
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrants have duly caused this report to be signed on their behalf by the
undersigned hereunto duly authorized.
The Resort at Summerlin, Limited
Partnership (Registrant)
By: The Resort at Summerlin,
Inc., a Nevada corporation, its
general partner
Date: January 4, 1999 By: /s/ Brian McMullan
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Brian McMullan
President and Chief
Executive Officer
The Resort at Summerlin, Inc.
(Registrant)
Date: January 4, 1999 By: /s/ Brian McMullan
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Brian McMullan
President and Chief Executive
Officer
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