Company must pay $212 million in damages after failing to convert notes to shares

Aristocrat Leisure bondholders won $212 million in damages after a U.S. judge ruled the Australian gaming machine giant breached its obligation to convert notes to shares.

As reported by Bloomberg, U.S. District Judge Peter Leisure ordered Aristocrat to pay the money, with interest, to 22 bondholders. The amount was reduced by $10 million as part of a pact under which all parties agreed not to appeal any aspect of the ruling, Aristocrat said.

Aristocrat sued in 2004 in an attempt to force the bondholders to accept cash and interest for the notes. The bondholders countersued for what they were to have received had the notes been converted to stock.

The judge ruled Aristocrat had an obligation to convert the notes and awarded damages based on calculations of what the share price was at the time the notes were to have been converted. He added interest to the amounts from 2004.

Aristocrat said the company is in the process of paying the bondholders. They include Deutsche Bank, which acted as the trustee, Amaranth and UBS.