Miami Fund to Sue Standard General over Its Allegedly Unfair Takeover of Bally’s

The Miami Police Pension and Relief Fund is reportedly on the way to sue American hedge fund Standard General over its 2024 bid to acquire casino and hospitality operator Bally’s Corporation.

“Hedge Fund Vulture” Kim Made the Transaction Possible

As reported by Casino.org, the Miami Police Pension and Relief Fund believes that the acquisition of Bally’s by Standard General in 2024 disadvantaged multiple stakeholders.

For context, Standard General initially submitted an offer to acquire Bally’s in 2022, putting forward $38 per share. The deal didn’t go through and Standard General ended up returning in 2024 with another offer, this time offering only $15 per share. After some negotiations, the hedge fund increased its offer to $18.25 per share. Bally’s ended up accepting that $4.6 million offer, which closed earlier this year.  

According to the report, a legal document defined Bally’s chair, Soo Kim, as a “hedge fund vulture” and accused him of cooperating with Standard General, resulting in a “coercive deal structure that massively underpaid Bally’s and its minority stockholders.”

Other Investors Were Also Part of the Alleged Conspiracy

The Miami Police Pension and Relief Fund added that other prominent investors also assisted in the offer. These include the likes of Sinclair Broadcasting, which remains a Bally’s investor to this day, and Noel Hayden, the founder of Gamesys, which Bally’s acquired in 2021. Together with Standard General and chair Kim, these investors owned 53% of Bally’s fully diluted shares.

The Miami Police Pension and Relief Fund alleged that the investors agreed to “roll over their equity along with Standard General,” which is the only reason it could proceed with the deal since it previously lacked the funds to fuel the transaction. The fund added that Kim also leveraged Bally’s revolving credit facility to undervalue the company.

The Miami Police Pension and Relief Fund also asserted that members of the special committee tasked with evaluating Standard General’s acquisition offer had strong ties to Kim and were strongly encouraged to assist with the process.