by Wendeen H. Eolis
50 MILLION DOLLAR QUESTION
JOHN JUANDA AND TOM DWAN MAN UP
REPAYMENT REQUESTS DISSECTED
TAPIE INVESTORS HAVE YET TO PONY UP
Last week Full Tilt Poker and Group Bernard Tapie took their proposed deal to the next level of drama, with a Poker Stars pro known as the Robin Hood of Poker entering from stage right-- as a wild card.
Unlikely protagonists raised and re-raised each other in a frenzy of sensational but substantively incomplete statements to suit their respective purposes of the moment. As a new week gets under way, the big picture is all too clear. Tapie’s proposed acquisition of Full Tilt assets is spinning on a slippery slope.
Tapie Problems Expand
Cross examination or digging deeper, independently, was the only way to get a handle on the unfolding impediments to completion of a deal. For several months, GBT counsel Behn Dayanim, the architect of the GBT-DOJ deal to acquire FTP’s assets, expressed confidence the deal would fly.
Then last week, Dayanim notified poker media of a serious and previously unanticipated glitch; several high profile players on the FTP site are in significant debt to the company; accounting in aggregate for more than 15 million dollars of FTP assets.
According to Dayanim, by and large these players have not been addressing repayment in a cooperative manner. FTP player debt—which totals approximately 16.5 million dollars-- may be the most enraging issue to players awaiting refunds and frustrating to Mr. Dayanim who sees all of his efforts on the precipice of a failure. But player debt is NOT by itself the reason the deal now appears to be a favorite to crater.
More Players Revealed on the List of Debtors
Mr. Dayanim named names and Laurent Tapie backed him up in a separate interview, calling out select players for holding up the deal. Players referenced included: David Benyamine, Layne Flack, Phil Ivey, Erick Lindgren, and Mike Matusow--all associated with FTP--and Barry Greenstein, a PokerStars pro who has declined to give particulars on exactly how he came to borrow money on a competing site.
GBT’s disclosures of indebted players has not included pros John Juanda or Tom Dwan. However, PPN has learned from two FTP insider sources that they are on the list. Last week, GBT 's lawyer, Dayanim, acknowledged on questioning,at least two pros were engaged in seemingly good faith negotiations with GBT. One FTP friend in the know says, “Juanda and Dwan have big figures but they deserve to be separated from the rest of that crew with honorable mention.” He points out, “They are both actively communicating with GBT in an effort to resolve their respective loans from the Company.”
GBT Says, “Let’s Make a Deal"
In an exclusive telephone interview with PPN last night, Mr. Dayanim assailed as disingenuous, any player who has expressed concern about the logistics of paying back his debt.
Dayanim explained there are multiple mechanisms by which indebted players can put things right; any repayment prior to a deal closing would be made to FTP in a manner that would provide for the monies to become part of the FTP asset forfeiture to the Department of Justice. Dayanim asserts this is consistent with the deal that was struck between GBT and DOJ and approved by FTP.
Greenstein Objection
In a separate conversation with Barry Greenstein, last night PPN learned far more about his position; his decision to play on the site, his debt, his failure to repay the loan before Black Friday, and his views regarding resolution of his loan from FTP. That exclusive interview will be reported in the coming days.
For the moment, suffice to say Greenstein is not persuaded that he should repay his FTP loan to FTP before conclusion of the Tapie-Full Tilt negotiaitons for a deal—under any circumstances or directly to GBT after consummation of such a deal.
Greenstein says he has been in touch with the Department of Justice and prefers to handle his matter directly with the Government—after the Tapie –Full Tilt matter concludes one way or the other.
Dayanim Rebuttal to Greenstein Plan
Dayanim, scoffs at Greenstein’s delay, arguing that if other players follow Greenstein’s lead and refuse to make suitable arrangements for repayment, now, he will be among those responsible if a deal cannot come to fruition. Dayanim’s final comments make his view clear: former FTP players are depending on this deal to assure the best prospects for recovering their monies.
Bigger Problems Come to Light
Here are this reporter’s additional independent findings of current issues threatening the deal – beyond the unpaid debts of high profile players to FTP.
- A major miscalculation on the amount of money in the corporate accounts of FTP, previously reported in many poker media—not including PPN—as somewhere between 35-40 million dollars. Full Tilt insiders who have proven to be on the money in the past, say the amount actually in FTP coffers is less than 20 million dollars.
- A significant miscalculation in the level of interest on the part of passive FTP shareholders in taking shares in the new company. According to two shareholders, initial confidence in the brand under Tapie has dissipated. The dollar amount Tapie originally anticipated is not known; guesses by generally informed legal beagles have been as high as eight figures.
- Creditors’ rights-- apart from player’s claims which are resolved in the GBT-DOJ-FTP approved agreement—are unclear. European lawyers familiar with FTP debts to vendors and service providers indicate there is “good and sufficient reason” for Tapie to be worried. They say, he could end up with millions of dollars of claims--outside player refunds.
The consensus among lawyers queried for this article: Tapie has recently figured out that he has a significant exposure—perhaps in the range of 15 million dollars or more--in creditor claims that are probably viable in Europe.
While none of the three points above is confirmed directly by the parties, the very smart money is betting large that the information is substantively correct and the headline of a 50 million dollar question is conservative.
Counsel Dayanim was asked, specifically about PPN’s independent findings. He demurred, but he didn’t argue the central point; the deal is in grave peril. Mr Dayanim said as much in different words. He insisted any one problem is probably not insurmountable, but the mix of problems, if not substantially resolved will torpedo the deal.
As to the problems specified by yours truly, GBT counsel Dayanim acknowledged they were legitimate matters to raise in the interview. He deftly and courteously begged off from confirming or denying the validity of this reporter’s research.
Did I mention that Mr. Dayanim also danced away from confirming that investor commitments are as good as gold?
Editor’s Note: This article and related research is part of material that is planned for use in connection with other writings of the author. Wendeen H. Eolis can be reached at eolis@eolis.com and at the website www.eolis.com you can also find her on facebook and Linkedin.
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