PokerStars Former Owners Won’t Release $300 Million in Escrow Monies
Amaya’s fight against a potential $870m payout to the Commonwealth of Kentucky has taken another turn after PokerStars former owner, the Rational Group, refused to allow $300m held in escrow to be retained against the potential fine. The Rational Group was founded by Israeli-Canadian Isai Scheinberg.
Amaya issued this statement on Monday (February 22):
Amaya Inc. (NASDAQ: AYA; TSX: AYA), through certain subsidiaries, today filed a notice of appeal of the previously announced December 23, 2015 Kentucky trial court order for damages against such subsidiaries and posted a US$100 million supersedeas bond to stay enforcement of the order during the pendency of the appeals process. The posting of the bond required the delivery of cash collateral in the amount of US$35 million and letters of credit in the aggregate amount of US$30 million. Amaya will continue to vigorously challenge the trial court's order.
In late-January, pursuant to and in accordance with the procedures set forth in the merger agreement governing the acquisition of the PokerStars business, a subsidiary of Amaya submitted a notice of claim to the sellers' representative and escrow agent seeking indemnification for losses and potential losses caused by breaches under the merger agreement and requesting, among other things, that the escrow agent retain the then-remaining balance of the escrow fund established under the merger agreement in an aggregate amount equal to approximately US$300 million. Amaya has since received a notice from the sellers' representative initially disputing all claims set forth in Amaya's notice of claim. The disputed indemnity claims and release of the escrow funds will be resolved in accordance with the provisions of the merger agreement and escrow agreement.
There can be no assurance that Amaya's appeal will be successful or that its notice of claim will result in any amounts in the escrow fund being remitted to Amaya or that any of Amaya's estimates of potential losses will reimbursed by the sellers or otherwise.
