Riviera, Paulson settle for $5 million

Riviera Holdings Corp. said today it agreed to pay investor Allen Paulson $5 million to settle a lawsuit he brought against the company.

If a federal judge in Los Angeles approves the proposed settlement, Paulson would receive $7.50 a share for each of the 463,655 Riviera Holdings shares he owns, or about $3.5 million.

Paulson also would receive about $1.5 million from funds held for holders of the company's contingent value rights.

Paulson sued Riviera, Elsinore Corp. and the investment banking firm Jeffries & Co., as well as other companies, alleging he was duped out of $22.3 million in a failed deal to buy Riviera and Elsinore.

Riviera said the lawsuits against the other defendants are still pending.

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