NOTICE TO HOLDERS OF AUTHORITY SETTLEMENT PROPOSAL (NOTICE #21)

Transcription

1 NOTICE TO HOLDERS OF AUTHORITY SETTLEMENT PROPOSAL (NOTICE #21) RIVER ROCK ENTERTAINMENT AUTHORITY 9% SERIES A SENIOR NOTES DUE 2018 AND 8% SERIES B TAX-EXEMPT SENIOR NOTES DUE 2018 (THE SENIOR NOTES ) Please forward this Notice to beneficial holders. *CUSIPS: AF7, AA2 UMB Bank, National Association serves as successor indenture trustee, successor collateral trustee and successor depository (collectively, Senior Notes Trustee ) for the holders of the above-referenced Senior Notes pursuant to that certain Indenture dated as of December 21, 2011 (the Indenture ) 1 between the River Rock Entertainment Authority, an unincorporated instrumentality of the Dry Creek Rancheria Band of Pomo Indians, a federally recognized Native American tribe (the Authority ) and the Senior Notes Trustee. Obligations of the Authority are the primary source for the payment of principal, premium, if any, interest, and other amounts relating to the Senior Notes. The Senior Notes are secured by, among other things, gaming assets of the Authority, including, without limitation, certain interests of the Authority in a Sonoma County, California-based casino (the Casino ). The Senior Notes are also secured by the funds held in trust under the Indenture and related documents. Capitalized terms used herein and not otherwise defined shall have the meanings given such terms in the Indenture. This Notice is to inform all holders of the Senior Notes that the Authority has issued a press release reflecting progress on the Authority s previously announced plans to pursue a resolution of the Authority s longstanding Events of Default under the Senior Notes and Note Documents. As is set forth more fully below, that press release, a copy of which is attached to this Notice, reflects Authority plans to pursue a settlement of the indebtedness evidenced by the Senior Notes centered around (i) a cash payment in the aggregate amount of 30% of the principal amount of the outstanding Senior Notes for pro rata distribution to all holders of Senior Notes, and (ii) cash held in the Parity Lien Debt Account. AUTHORITY SETTLEMENT PROPOSAL Holders of the Senior Notes are asked to take notice that the Authority has announced progress on the Authority s previously announced plans to pursue a resolution for its obligations relating to the Senior Notes and Note Documents. The Authority has specifically announced plans to pursue a settlement of the indebtedness evidenced by the Senior Notes centered around (i) a cash payment in the aggregate amount of 30% of the principal amount of the outstanding Senior Notes 1 The Indenture and other documents evidencing the Senior Notes and/or the Authority s obligations associated with the Senior Notes are described herein as the Note Documents.

2 Notice to Holders Page 2 of 3 for pro rata distribution to all holders of Senior Notes, and (ii) cash held in the Parity Lien Debt Account. The Authority s August 4, 2016 press release concerning these matters is attached. Holders of the Senior Notes are strongly encouraged to review the press release in its entirety. Prior notices to Noteholders have reflected Events of Default under the Note Documents based on, among other things, the Authority s failure to make interest payments on the Senior Notes when and as required by the terms of the Note Documents. The Authority has continued to encounter financial distress and an inability to pay debt service on time or in the amounts required by the Note Documents. Prior notices have also reflected Authority efforts to pursue financing with a third-party lender to obtain financial resources needed to resolve these Events of Default. The Authority s August 4, 2016 press release reflects that the Authority is in discussions with Benefit Street Partners, LLC to obtain up to $50 million of funding to resolve its obligations under the Senior Notes and related instruments, as well as other funded debt obligations of the Authority. The press release also reflects the Authority s desire to consummate a resolution of these matters by early The Senior Notes Trustee and its professionals are reviewing the press release and are in communication with the Authority, the Authority s professionals, and a working group of Noteholders consisting of a majority in principal amount of the Senior Notes outstanding concerning actions that may be appropriate given these circumstances. Prior notices have reminded Noteholders that owners of a majority in aggregate principal amount of the Senior Notes outstanding have certain rights to direct the time, method and place of conducting proceedings to be taken in connection with the enforcement of the Note Documents and certain rights to amend the Note Documents. The Senior Notes Trustee will continue to provide information to Noteholders concerning the matters reflected in this Notice. The Senior Notes Trustee also intends to schedule an update call that will be open to all holders of the Senior Notes and market participants to discuss these developments. The time and details of that call will be announced in a future notice. Holders of the Senior Notes may also wish to consult with counsel of their choosing regarding the press release and matters reflected herein. Noteholders are cautioned that the press release reflects numerous conditions precedent that must be satisfied before the Authority would be in a position to fund any settlement of the Senior Notes. There can be no assurance that the Authority proposal reflected in the press release will be accepted, will be documented to the satisfaction of necessary stakeholders, will continue to include the terms reflected in the press release or if a settlement is consummated, the timing thereof. NOTEHOLDER PARTICIPATION The Senior Notes Trustee is seeking participation by holders of Senior Notes in discussions regarding the matters described in this Notice. All holders of Senior Notes that have not already contacted the Senior Notes Trustee or its counsel in response to prior notices are asked to do so as soon as possible at the addresses provided below. Holders of Senior Notes that have previously

3 Notice to Holders Page 3 of 3 contacted the Senior Notes Trustee do not need to take any further action at this time in connection with this request for participation. SENIOR NOTES TRUSTEE PROFESSIONALS The Senior Notes Trustee has retained the law firm of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. and specifically P. Miyoko Sato and Ian A. Hammel of that firm to assist it in matters relevant to the Senior Notes. Ms. Sato s phone number is and her address is pmsato@mintz.com. Mr. Hammel s phone number and address are and iahammel@mintz.com. At the direction of the holders of a majority in principal amount of the Senior Notes outstanding, counsel to the Senior Notes Trustee has retained GLC Advisors & Co. as financial advisor with respect to the Senior Notes. ADDITIONAL INFORMATION The Senior Notes Trustee intends to issue periodic notices to holders and market participants regarding certain matters relevant to the Senior Notes. Noteholders who wish to receive future notices directly may do so by contacting the Senior Notes Trustee. Certain information relevant to the Senior Notes is available from the Electronic Municipal Market Access Service ( (the EMMA Service ). The Senior Notes Trustee is not responsible for the maintenance or accuracy of the EMMA Service, however, and makes no representations or warranties with respect thereto. Holders with questions regarding this Notice should direct them in writing to Laura Roberson, Vice President, UMB Bank, National Association, at 2 South Broadway, Suite 600, St. Louis, Missouri 63102, by at laura.roberson@umb.com or through the Senior Notes Trustee s counsel as identified above. The Senior Notes Trustee may conclude that a specific response to particular inquiries from individual holders is not consistent with equal and full dissemination of information to all holders. The Senior Notes Trustee makes no recommendations and gives no investment or tax advice. Holders should not rely on the Senior Notes Trustee as their sole source of information regarding the Senior Notes. UMB BANK, NATIONAL ASSOCIATION, AUGUST 5, 2016 As Senior Notes Trustee * The Senior Notes Trustee is not responsible for the selection or use of these CUSIPs. They are included solely for holder convenience v.2

4 CURRENT REPORT Date of Report (Date of earliest event reported): August 4, 2016 River Rock Entertainment Authority 3250 Highway 128 East Geyserville, California (707)

5 Item 8.01 River Rock Entertainment Authority River Rock Entertainment Authority ("River Rock"), an unincorporated governmental instrumentality of The Dry Creek Rancheria of Pomo Indians that operates River Rock Casino in Sonoma County, California, today disclosed certain information via a press release in connection with a planned restructuring and settlement proposal regarding its 9% Series A Senior Notes due 2018 and 8% Series B Tax-Exempt Senior Notes due 2018 (the "Senior Notes"). A copy of the press release is attached hereto as Exhibit 99.1

6 Exhibits 99.1 Press release of the River Rock Entertainment Authority dated August 4, 2016.

7 River Rock Entertainment Authority Discloses Information in Connection with Discussions with Certain Creditors and Other Parties as Part of Restructuring and Settlement Process Geyserville, CA, August 4, 2016 /PRNewswire/ -- River Rock Entertainment Authority, Inc. ("River Rock"), the operator of the River Rock Casino in Sonoma County, today disclosed certain information in connection with a planned restructuring and settlement proposal to certain stakeholders regarding its 9% Series A Senior Notes due 2018 and 8% Series B Tax-Exempt Senior Notes due 2018 (the "Senior Notes"). River Rock is seeking to advance this proposal with UMB Bank, N.A., solely in its capacity as successor indenture trustee (the "Senior Notes Trustee") for the holders of the Senior Notes under that certain Indenture, dated as of December 21, 2011, by and between River Rock and the Senior Notes Trustee and the holders of the Senior Notes. River Rock is seeking a restructuring and settlement of the indebtedness evidenced by the Senior Notes which would be binding on all holders of the Senior Notes in order to resolve defaults that have existed since May Specifically, River Rock intends to make a non-binding offer to the Senior Notes Trustee, which would include the following terms: (i) a cash payment in the aggregate amount of 30% of the principal amount of the outstanding Senior Notes for pro rata distribution to all holders of Senior Notes, and (ii) cash held in the Parity Lien Debt Account. In order to obtain financing for the settlement, River Rock will need to demonstrate that any settlement agreed to by the Senior Notes Trustee is supported by the holders of at least a majority of the principal amount of the Senior Notes. Certain institutional holders of the Senior Notes have formed a working group (the Ad Hoc Holder Group ) and such holders are currently in consultation with the Senior Notes Trustee. River Rock expects to hold a conference call on or before August 12, 2016 among River Rock, Stuyvesant Square Advisors, acting as financial advisor to River Rock, legal counsel for River Rock, the Senior Notes Trustee, legal counsel and the financial advisor to the Senior Notes Trustee, and the Ad Hoc Holder Group to discuss the matters described in this press release. If River Rock receives a preliminary indication of interest in the non-binding offer from the Senior Notes Trustee after consultation with the Ad Hoc Holder Group, River Rock intends to proceed as follows: River Rock will continue its negotiations and prepare a preliminary restructuring and settlement proposal for formal consideration by the Senior Notes Trustee and holders. If the preliminary restructuring and settlement proposal is acceptable to the Senior Notes Trustee and Ad Hoc Holder Group, River Rock will create an investor website for all holders of Senior Notes to which it will post a definitive restructuring and settlement proposal, disclosure statement and other communications relating to the settlement. River Rock would then schedule informational calls that would be open to all holders of the Senior Notes to present its definitive restructuring and settlement proposal. RIVER ROCK WILL NOT CONDUCT A TENDER OFFER FOR ITS SENIOR NOTES. If there is support for a definitive restructuring and settlement proposal by both the Senior Notes Trustee and holders of the Senior Notes representing in excess of a majority of the outstanding principal amount of the Senior Notes, River Rock would request that the Senior Notes Trustee commence a trust instruction proceeding in a state court in the State of Minnesota pursuant to which the Senior Notes Trustee would request court approval to implement the restructuring and settlement proposal. The cash proceeds to be distributed in connection with the restructuring and settlement proposal described above are expected to be made available to River Rock pursuant to a loan agreement from Benefit Street Partners LLC or an affiliate, as lender, to be entered into simultaneously with the consummation of the restructuring and settlement plan (the Loan Agreement ). The Loan Agreement would allow a maximum borrowing of $50,000,000. Closing under the Loan Agreement would be subject to the completion of definitive documentation, satisfaction and discharge of the Senior Notes, River Rock s Senior Notes issued in 2004 and certain subordinated debt of River Rock, as well as other customary conditions to closing.

8 If, for any reason, River Rock is unable to consummate the Loan Agreement, River Rock would immediately terminate the offer to the holders of the Senior Notes described above. Consummation of any restructuring or settlement of the Senior Notes is subject to many factors and uncertainties and any estimate for the timing thereof is subject to variables that are outside the control of River Rock. However, based upon input from its advisors, River Rock believes that it is possible to complete the restructuring and settlement plan described in this press release before the end of 2016 or in early The negotiations of the terms and conditions of this proposal will continue and a definitive agreement, if any, may result in materially different terms. About River Rock Entertainment Authority The Authority is the operator of the River Rock Casino in Sonoma County, California, and is a tribal governmental instrumentality of the Dry Creek Rancheria Band of Pomo Indians, a federally recognized self-governing Indian tribe. Contact: David Fendrick, Chief Executive Officer River Rock Entertainment Authority David.Fendrick@riverrockcasino.com

9 SIGNATURES The Authority has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: August 4, 2016 River Rock Entertainment Authority By: /s/ David Fendrick David Fendrick Chief Executive Officer