Troubled Online Poker Company Files Lawsuit Against Atlantic Club Casino Over Nixed Purchase Deal
PokerStars’ parent company, The Rational Group filed a lawsuit against Resorts International Holdings (RIH) and other defendants, last Monday in Atlantic City, New Jersey. Presiding Judge Raymond Batten immediately granted a temporary restraining order (TRO) to restrict the selling of the Atlantic Club (AC) casino, and has set the initial hearing on May 17, 2013.
The Rational Group asserts that the RIH, an affiliate company of Colony Capital LLC, acted in bad faith when it terminated their contract last April 26, 2013. This is in view of the online gambling company’s failure to secure an interim license for Internet gambling operations, within the stipulated period.
However, the filing of the lawsuit revealed other stipulations in connection with the purchase contract that the parties entered into In December 2012. It turned out that the Rational Group has since paid the Atlantic Club $11 million as part of the deal, with a condition that the latter will retain the monies paid in case the contract is legally terminated. Another stipulation required the Rational Group to pay an additional $4 million within two days after the legal termination.
However, the Rational Group further disclosed that aside from attempting to collect the $4 million, the RIH communicated a proposal for a 10-day extension in exchange for an additional $6 million. The extension is obviously still not enough if the intention is to give Rational Group more time to comply with the licensing requirement. The New Jersey’s regulatory bodies have a total 90 days within which to complete its investigation and evaluation processes, before deciding to grant Rational Group a temporary license.
In fact, up to this moment, it is still uncertain if the NJ regulatory bodies will approve the online poker company’s interim license; thus, even the TRO is not an assurance that the Rational Group will be able to purchase the Atlantic Club casino.