Rush Poker, Multi-Entry Tourneys, and Now... “Equity Stakes”!

There’s a new item in The Wall Street Journal regarding last Friday’s news that Groupe Bernard Tapie has signed an agreement to acquire Full Tilt Poker, an agreement that has many conditions, one of the foremost being the site successfully negotiating its way out of the various legal troubles it faces with the U.S. Department of Justice.

The article specifically addresses another significant hurdle that must be overcome for the deal to occur -- taking care of the $300 million-plus the site currently owes its players, money which FTP doesn’t appear to have on hand.

Sounds like an idea being considered is “offering equity stakes” to some players. You heard that right. Thought it sounded funny that someone might actually want to buy Full Tilt Poker? Well, now it sounds like they’re thinking of selling some of FTP to you, too.

Gotta admit, that is inspired.

You’ll recall how the amended DOJ civil complaint described the site owing players “approximately $390,695,788” on March 31, 2011, yet only having “approximately $59,579,413 in its bank accounts.” The amended complaint also shared some internal communications from over the summer in which both Ray Bitar and Howard Lederer suggested the site couldn’t handle even $5 million worth of withdrawals.

The amended complaint went on to allege that nearly $444 million had been funneled into those several “FTP Insider Accounts.” No way to know how much of that money remains in those accounts, although a few days after the amendment the DOJ also issued warrants to seize accounts belonging to Lederer, Bitar, Chris Ferguson, and another Swiss account reportedly connected to Rafe Furst. Late last week Bitar filed a claim against the seizure of that particular account as well as against the seizure of a couple of other accounts that occurred back on Black Friday.

Then came last week’s report by the Alderney Gambling Control Commission -- the one they offered as an explanation for their decision to revoke Full Tilt Poker’s licenses to operate -- which also made mention of FTP’s financial woes, including referring to considerable sums seized by the DOJ from FTP -- “approximately $331 million” from June 2007 to June 2010.

All of which is to suggest what we already knew, namely, that anyone considering buying Full Tilt Poker also must have some idea about how to deal with the big ol’ debt the site currently has to its players.

In an interview last Friday, Laurent Tapie noted how the group “want[s] to find ways where we don't have to put in all the money and will be talking to the US Department of Justice next week.” Many took that to indicate that perhaps the group was going to try to get the DOJ to offer some of the seized funds to help pay players, an idea the DOJ had itself suggested as a possibility in its statement last week. There the DOJ said that “the return of forfeited funds to victims of the alleged fraud may be possible, but will depend on several factors,” among them the successful resolution of the indictment and civil complaint, just how much money there is available, and everyone involved cooperating with the DOJ at each step of the way.

In this new WSJ article, an attorney for Laurent Tapie is said to have confirmed that the group “may address Full Tilt’s liabilities by offering equity in a revived company to poker players owed the most money.” I’m guessing I wouldn’t be included among that group, given that Full Tilt Poker only owes me $279.85. (Not that Americans would ever be part of this discussion, anyhow.)

Other conditions mentioned in the piece include securing a new license to operate as well as having the existing owners also investing in the “revived company” (although not participating in its management). One wonders how, exactly, the old owners are going to be investing in the new company, if not with money that already should be considered as belonging to the players.

Oh, and the DOJ will have to give its blessing to all that, too.

Seems a little wacky to imagine a new “revived” Full Tilt Poker going forward with the players owed the most money having equity in the site -- being, in a sense, part-owners of the sucker. As Seth Meyers would say on SNL, “Really!?!”

To me it all sounds like we’re in the dizzying realm of hypotheticals within hypotheticals here, with the likelihood of this “equity stakes” idea ever getting to the table being necessarily slim. Posters over at Two Plus Two are understandably befuddled by it all, with most expressing well-founded skepticism.

My favorite comment over there I’ve seen so far comes from the poster “bingobars”. He says that “As an investor in FTP I for one will be overpaying myself by an incredible margin.”

Hard to come up with an analogy to describe the scenario.

How about I run a red light and smash into your car, damaging both to the point that neither can be driven. They aren’t totaled, though, as both can be repaired and gotten back on the road at considerable expense. Well, maybe. I mean we’ll have to see once they get in the shop.

I have no insurance, nor any means to pay for the repairs. But I can promise to let you drive my car if and when it gets fixed.

Sound good? No?

It’s Alive

Ended yesterday’s post with that pic of the Full Tilt Poker zombie, coming for our brains. Was intending to refer more to the story of FTP than FTP itself, a story that just... keeps... heaving forward... step by staggering step.

Then today comes yet another FTP-related headline, this one the announcement of an agreement between the Board of Directors at Full Tilt Poker and Groupe Bernard Tapie -- a French group of companies headed by its namesake -- for the latter to acquire the company and its assets.

Not dead, insists the embattled site. Don’t be closing the book just yet.

The news again came as an “exclusive” delivered by FTP to the affiliate site PokerStrategy.com. Can only surmise that Full Tilt Poker might owe the site something for which it is now paying in press releases. Who knows? In any event, the agreement apparently has “several conditions” attached to it, the only one mentioned being the “favorable resolution” of FTP’s considerable legal troubles with the U.S. government.

Reactions to the news quickly barreled through several phases.

First came the expressions of hope. Then, guarded optimism fueled by the statements of Laurent Tapie (son of Bernard) about paying back players and actually relaunching the sucker by January 2012 (outside the U.S., natch).

Next were the cautious reminders of those not insignificant “conditions.” Soon after came skepticism, mostly directed at the tycoon Tapie for having a past marked by various controversies, among them serving jail time for fixing a soccer match involving a team he ran and tax fraud.

Before long I think most of us had pretty much returned to our previous postures of extreme cynicism from which any news regarding Full Tilt Poker is taken with a 26 oz. cylinder full of salt. After all, this announcement of a possible sale comes just one day removed from FTP saying their licenses being revoked “makes it more difficult to execute the sale of the company and hence repay its players.”

Introducing a character like Tapie into the story at this late juncture seems about right. In truth, anyone stepping in here to buy the site a day after its licenses to operate were revoked and a week after the DOJ’s amendment to the civil complaint was necessarily going to appear something of a wild card, thereby fitting neatly with the already assembled cast.

As Bill Rini tweeted just a little while ago, “I wonder if Tapie has spotted the sucker at the table yet.” Or for more grins, check out Otis' inspired tweet from earlier listing some other projects being considered by Groupe Tapie.

For me, I’m going to put the book of Full Tilt down for now and do something else for a while. Maybe watch some baseball. Or start studying chess. Or perhaps I’ll just pop in Young Frankenstein...