Rational Group gambled and lost as much as $11 million over the botched deal to purchase Atlantic Club (AC) casino for their online poker brand PokerStars.
In last Friday’s (May 17) preliminary hearing, Judge Raymond Batten ruled in favor of Colony Capital LLC, by cancelling the Temporary Restraining Order previously issued in connection with the lawsuit filed by Rational Group. This was after reviewing the contract and hearing the oral arguments.
The judge further ruled that the owners of AC casino could now seek or enter into a purchase deal with another buyer and keep the $11 million advance payment as well. Apparently, Judge Batten found the contract termination initiated by Resorts International Holdings (RIH), owner of AC casino and a subsidiary of Colony Capital LLC, as in accordance with the provisions of the agreement entered into by Rational and RIH last December 2012.
The lawyers of Rational Group argued that under New Jersey’s statutes, contracts in relation to license petitions could be terminated at least 121 days after completion of the license application. This is view of the fact that NJ’s regulatory bodies still have to conduct a review before granting its decision.
However, Judge Batten pointed out that if such was the case, then why did Rational Group agree to the contract provision that required them to secure an interim license on or before April 26, as part of the termination clause?
In fact, the judge even questioned the lawyers of Rational Group on why they allowed their client to enter into such an agreement. Judge Batten further questioned as to what kind of businessperson would agree to a termination clause that has no leeway for possible delays in regulatory processes, and without provisions that require the AC casino owners to return the monies paid in advance.
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