Tapie Group, Full Tilt Poker, and U.S. Dept. of Justice Strike Deal
The sale of Full Tilt Poker to the Groupe Bernard Tapie has been "brokered" by the U.S. Dept. of Justice
The deal will apparently facilitate the return of player funds not just to U.S. players with money locked up on FTP but to the "rest of world" (ROW) players as well.
As Congressional hearings regarding the possible future of online poker continue to occupy the legislative branch of the U.S. government, the executive branch acted on Thursday with regard to online poker's past. It was announced late Thursday afternoon that a deal has been struck involving Full Tilt Poker, the Groupe Bernard Tapie, and the U.S. Department of Justice to allow for the French investors to acquire the embattled online poker site.
While the implications of the deal are significant in several ways, the one consequence of primary relevance to many observers is the fact that the deal will apparently facilitate the return of player funds not just to U.S. players with money locked up on FTP but to the "rest of world" (ROW) players as well.
Pending approval by shareholders of the various companies comprising Full Tilt Poker, the deal involves FTP forfeiting all of its assets to the DOJ who in turn will sell those assets to the GBT for a sum of $80 million. The DOJ will additionally dismiss current civil forfeiture proceedings against FTP for the return of funds.
It is possible that amount the GBT will owe the DOJ will in truth be less than the stated price. The Wall Street Journal is reporting today that some of the money seized by the DOJ from FTP accounts may in fact go to the GBT group, meaning "the amount spent by Groupe Bernard Tapie for the assets would actually be around $40 million, according to a person with knowledge of the situation."
As Wendeen H. Eolis reported for Poker Player Newspaper yesterday, the agreement includes provisions that "GBT will hold at least a majority interest in the company" and that "none of the current FTP directors will be permitted to hold shares in the company."
Eolis, who spoke with Groupe Bernard Tapie counsel Benhan Dayanim for her report, added further explanation that U.S. players will subsequently be invited to "submit petitions to the U.S. government to 'request compensation for their losses.'" Not exactly the method of withdrawing funds players would have ever anticipated when they first deposited money on the site -- that is, to have to apply directly to the DOJ for reimbursement.
Presumably the DOJ will be using both the $80 million it receives from the GBT for the deal and a portion of the significant sums it had previously seized from accounts belonging to FTP's companies to pay back the American players.
In late September the Alderney Gambling Control Commission indicated in its report detailing the reasons for its suspension of FTP's licenses to operate that "individual seizures made by the Department of Justice during the period 28th June 2007 to 20th June 2011... [had] amount[ed] to a cumulative total of approximately $331 million."
Meanwhile, the deal requires that the GBT take on the responsibility to "repay or make whole" the ROW players, Eolis reports. If recent reports regarding the GBT's plans are accurate, there may well be options given to at least some ROW players either to have their balances refunded to them or to take "equity stakes" in the company.
News of the deal being "brokered" by the DOJ was leaked prematurely yesterday afternoon on the CNN Money website, the article being posted prior to the reporters' obtaining needed confirmation by a representative of the Groupe Bernard Tapie's legal counsel. The article was thus taken down, leading to momentary uncertainty about the status of the deal.
However, such confirmation was eventually obtained by Eolis and others and it now appears the deal has indeed been struck, although a favorable vote from FTP company shareholders and other particulars regarding the transfer of assets from FTP to the DOJ is still needed in order for the deal to be finalized.
Since the initial report, two of the three parties involved have commented further on the deal.
Full Tilt Poker issued a statement to PokerStrategy declaring its happiness with the deal and in particular the way it will allow the site finally to repay its customers. Additionally, FTP attorney Jeff Ifrah described the deal to PokerStrategy as "clearly historic" and "an incredible achievement." Ifrah also indicated hopefully that subsequent steps will result in a new GBT-managed version of the site and that "Full Tilt will become operational."
Representatives of the GBT have also made statements to others including Subject:Poker, who like Eolis spoke with the French group's attorney Dayanim. To S:P Dayanim reiterated that "this is the first step in a process that will require agreement of the Full Tilt companies to the forfeiture of those assets and execution of a definitive agreement with the Department."
Meanwhile, the Department of Justice has been contacted by numerous outlets and to each the response has been that they have no comment on the deal as of yet.
It should be noted that the proposed deal does not resolve the "Black Friday" indictment and civil complaint (unsealed April 15 and amended September 20) in which Full Tilt Poker's companies and directors are among those targeted.
Interestingly, during both yesterday's oversight hearing of the Senate Committee on Indian Affairs and this morning's House hearing of the Subcommittee on Commerce, Manufacturing and Trade (previewed here), the example of Full Tilt Poker's unfair treatment of its customers was repeatedly evoked by witnesses arguing for the need for some form of licensing and regulating of online poker in the United States.
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