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Business Briefing shares are undervalued, lawsuit says

December 25, 2009


Suit calls bid for Youbet underpriced Inc., the Burbank-based online horse race betting service, was sued by a shareholder who contends his stock is undervalued in a $126.8-million acquisition proposal by track operator Churchill Downs Inc., host of the Kentucky Derby.

Louisville-based Churchill Downs said Nov. 11 it would buy for about $2.86 a share in cash and stock, a 28% premium at the time. Shareholder Raymond Balch sued in Delaware Chancery Court seeking more money.

Balch contends the price "is unfair and grossly inadequate" and "designed to take advantage of's stockholders who are vulnerable from disappointing reversals in the equity markets.", with $109 million in sales last year, rose to a 52-week high of $3.91 on July 24 from a low of 79 cents Dec. 31.

Divorcé is stuck with Madoff loss

A New York real estate lawyer who paid his ex-wife $2.7 million of the supposed value of his account with Bernard Madoff can't revise the agreement after he lost money in the Ponzi scheme, a New York judge ruled.

Steven Simkin, chairman of Paul, Weiss, Rifkind, Wharton & Garrison's real estate department, sued his former wife, Laura Blank, in February after Madoff's fraud was exposed, saying she was unjustly enriched by the 2006 settlement.

Simkin is stuck with his decision to keep the account instead of withdrawing his money before the December 2008 collapse of Bernard L. Madoff Investment Securities, acting Justice Saralee Evans of the state Supreme Court wrote.


Casino company files Chapter 11

A casino company with three properties near Nevada's eastern border with Arizona says it is filing for federal bankruptcy protection.

Black Gaming said its Chapter 11 plan would give company control to an investment group. Creditors have not yet weighed in on the plan.

The Mesquite, Nev., hotel-casino operator is in default on $206 million in debt.

The company says it plans to continue operations under current management while it restructures.

Black Gaming's properties in Mesquite -- about 80 miles northeast of Las Vegas -- are the CasaBlanca, Oasis and Virgin River. Operations at the Oasis have been suspended.


Jackson Hewitt shares plunge 23%

Jackson Hewitt Tax Service Inc. shares plunged 23%, the worst on the New York Stock Exchange, after its bank partner cut off funds for tax refund loans.

Regulators ordered Santa Barbara Bank & Trust to stop providing money, which covered about 75% of Jackson Hewitt's financial products program, according to a federal filing by the New Jersey-based tax preparer.

Jackson Hewitt, the No. 2 tax preparer behind H&R Block Inc., dropped $1.34 to close at $4.50. The stock fell 71% in 2009.

Messages left with a Jackson Hewitt spokeswoman weren't returned.


Siena resort faces foreclosure threat

The Siena Hotel Spa Casino in downtown Reno has received a notice of default and threat of a foreclosure sale.

The resort's lender, Bar-K Inc., filed the notice Dec. 11, citing an original loan of $50 million.

The Siena said it "has not remained insulated" from the ailing economy, but said "comprehensive reorganizational efforts" were underway that would prevent the need for foreclosure.

The $70-million Siena opened in July 2001.

-- times wire reports

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