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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):
May 17. 2000
CAPITAL GAMING INTERNATIONAL, INC.
(Exact name of Registrant as specified in Charter)
New Jersey 0-19128 22-3061189
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification
Number)
2701 E. Camelback Road, Suite 484, Phoenix, Arizona 85016
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(Address of principal executive office) (Zip Code)
Registrant's telephone number including area code: (602)-667-0670
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Not Applicable
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(Former name and former address, as changed since last report)
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ITEM 3. BANKRUPTCY OR RECEIVERSHIP
On May 15, 2000 (the "Petition Date"), Capital Gaming International,
Inc., a New Jersey corporation (the "Company"), filed a voluntary petition for
reorganization of the Company under Chapter 11 of Title 11 of the United States
Code (the "Bankruptcy Code") in the United States Bankruptcy Court for the
District of New Jersey, Case No. 00-14052 (JHW). The Company is in possession of
its property and assets and maintaining and operating its business as
debtor-in-possession pursuant to the provisions of the Bankruptcy Code. No
trustee or receiver has been appointed. The Company's two operating
subsidiaries, Capital Gaming Management, Inc. and Capital Development Gaming
Corp., were not included in the filing and are not debtors. A copy of the press
release issued by the Company on May 16, 2000 in connection with the filing of
the petition is being filed as an Exhibit hereto and is incorporated herein by
reference.
In connection with the filing of the petition, the Company and U.S.
Bank Trust National Association, as Indenture Trustee, jointly submitted a
Disclosure Statement and Plan of Reorganization (the "Plan") for the Company.
The Plan is the result of extensive negotiations among the Company, the
Indenture Trustee, and holders (the "Senior Noteholders") of approximately
eighty-four percent (84%) of the Company's outstanding 12% Senior Secured Notes
due 2001 (the "Senior Notes") and approximately seventy percent (70%) of the
Company's stock. Those parties concluded that the best way to maximize the
Company's value and preserve it as a going concern was to "de-leverage" the
Company by converting the Senior Notes to equity. Although the long-term success
of the Company is dependent upon its ability to obtain new management contracts,
this proposed restructuring will (i) eliminate the uncertainty created by the
existing debt structure; (ii) provide the reorganized Company needed flexibility
for financing future operations; and (iii) provide the reorganized Company with
competitive advantages when competing with better financed competitors.
Under the Plan, the Senior Noteholders will receive on account of the
Senior Notes, which will be cancelled, a distribution of at least $9,000,000 in
cash and 2,068,000 shares of New Class A Common Stock, representing ninety-four
percent (94%) of the aggregate voting securities of the reorganized Company.
General unsecured creditors of the Company will receive a pro rata share of
$100,000, unless their claims are $2,500 or less, in which case they will be
paid in full. Certain holders of the Company's existing stock will receive their
pro rata share of 550 shares of New Class B Common Stock. Existing shares of the
Company's stock will be cancelled.
Although there can be no assurance that the Plan will be confirmed in
its present form or that the transactions contemplated thereby will be
consummated, as of the Petition Date holders of approximately eighty-four
percent (84%) of the outstanding Senior Notes and seventy percent (70%) of the
Debtor's stock had indicated their support of the Plan.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
99.2. Press Release of Capital Gaming International, Inc., dated May
16, 2000.
SIGNATURES
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 hereunto duly authorized.
CAPITAL GAMING INTERNATIONAL, INC.
Dated: May 17, 2000 By: /s/ William S. Papazian
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Name: William S. Papazian
Title: Executive Vice President
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