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 report): March 28, 2001
CAPITAL GAMING INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
New Jersey 0-19128 22-3061189
(State or other (Commission File Number) (I.R.S.
jurisdiction of Employer
incorporation) Identification
Number)
3030 E. Camelback Road
Suite 295
Phoenix, Arizona 85016
(Address of principal (Zip Code)
executive offices)
(602) 667-0670
Registrant's telephone number, including area code
N/A
(Former name or former address, if changed from last report)
"Item 5. Other Events"
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1. Settlement with Laguna Development Corporation
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On March 28, 2001 the Company's wholly-owned subsidiary, Capital Gaming
Management, Inc. ("CGMI"), amicably settled its contractual disagreement with
the Laguna Development Corporation pursuant to a Settlement Agreement and Mutual
Release ("Settlement Agreement") by and among CGMI, the Pueblo of Laguna
("POL"), the Laguna Development Corporation ("LDC") and others. Pursuant to the
Settlement Agreement, the parties terminated the Management Agreement, loan
documents, leases and other documents between the parties in exchange for
payment by the LDC of settlement proceeds in the amount of One Million Seven
Hundred Thirty-Two Thousand ($1,732,000) Dollars, which payment was made on
March 28, 2001. In addition, the parties and others exchanged mutual releases.
The settlement of the Management Agreement with the LDC represents the cessation
of the last income-producing asset of the Company and its subsidiaries.
For previously disclosed information regarding the Management Agreement and
related documents between CGMI and the LDC, and the contractual disagreement
between the parties, reference is made to the following reports of the Company
filed under Section 13 of the Securities Exchange Act of 1934, all of which are
on file at the Securities and Exchange Commission: Annual Report on Form 10-K
for the fiscal year ended June 30, 2000 and Quarterly Reports on Form 10-Q for
the fiscal quarters ended September 30, 2000 and December 31, 2000.
2. Settlement with Narragansett Indian Tribe
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On April 2, 2001 the Company's wholly-owned subsidiary, Capital Development
Gaming Corporation ("CDGC"), amicably settled its contractual dispute with the
Narragansett Indian Tribe pursuant to mutual Release Agreements ("Releases")
given by each party to the other. Pursuant to the Releases, the Narragansett
Tribe executed and delivered to CDGC a promissory note ("Promissory Note") in
the amount of Ten Million ($10,000,000) Dollars as settlement of the contractual
dispute. The Promissory Note provides that principal shall be due and payable in
eighty-three (83) equal monthly installments of $119,000, followed by an 84th
and final month's installment of $123,000, beginning on the sixtieth (60th)
calendar day (the "Commencement Date") after the opening by the Tribe of any
gaming, casino or similar facility, project or enterprise, whether on Tribal
land, Settlement Act land, trust land or commercial land wholly or partially
within the State of Rhode Island. The Promissory Note further provides that it
may be prepaid at any time, without premium or penalty, and that interest will
be charged and payable monthly on the outstanding principal balance of the
Promissory Note from the Commencement Date until the full amount of principal
due under the Promissory Note has been paid, at a rate equal to the prime rate
plus one percent (1%) per annum as of the Commencement Date. The Promissory Note
further provides that the Narragansett Tribe's obligation to pay such debt shall
be limited as to source of revenues, dividends or other payments payable or due
to the Tribe arising from or in connection with any casino project. In
connection with the settlement of the contractual dispute with the Narragansett
Tribe, CDGC and Boyd Gaming Corporation also exchanged mutual releases. There
can be no assurance that the Narragansett Tribe will open a gaming, casino or
similar facility, project or enterprise within the state of Rhode Island, or
that any such facility, project or enterprise, if opened, will generate
sufficient cash flow to service the Promissory Note.
For previously disclosed information regarding the Management Agreement
with the Narragansett Tribe and the contractual disagreement between the
parties, reference is made to the following reports of the Company filed under
Section 13 of the Securities Exchange Act of 1934, all of which are on file at
the Securities and Exchange Commission: Annual Report on Form 10-K for the
fiscal year ended June 30, 2000 and Quarterly Reports on Form 10-Q for the
fiscal quarters ended September 30, 2000 and December 31, 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.
May 4, 2001 CAPITAL GAMING INTERNATIONAL, INC.
By: /s/ Charles Brewer
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Name: Charles Brewer, President