Slots Maker Aristocrat Leisure Loses Claim Against Deutsche Bank
A US court recently dismissed a claim filed by Aristocrat Leisure, a leading slot machine manufacturer worldwide, regarding a bond dispute with Deutsche Bank. The slots maker claimed that a clause in the $130-million convertible bond's indenture, arranged by Deutsche Bank, permitted it to deny investors their right to change their securities into shares.
According to Aristocrat, the wording of the clause indirectly stripped investors of the aforementioned right, and that Deutsche Bank, was unwilling to correct the wording. This chain of events prevented the company from calling the bond.
The court decided that Aristocrat must respond to counterclaims filed against it, alleging that it interpreted the clause fraudulently in an attempt to cancel investors' conversion rights, constituting a violation of rule 10b-5 of the U.S. Securities and Exchange Act. The Australian slots maker declared that it plans to fight the New York court's reading of the bond's indenture.
