Owners of the Atlantic Club have filed papers in court that respond to a lawsuit that PokerStars brought seeking to force the Atlantic Club to complete an acquisition deal concerning the New Jersey casino. The new papers that were filed ask the judge to remove a restraining order that was imposed so the Atlantic Club can continue to entertain offers from other interested parties on their casino until the court makes a decision as to if time has expired on the PokerStars agreement.
The agreement in question states that PokerStars has to have gotten its casino license by 26 April. If that did not occur, the agreement says the contract may be terminated. At issue is the fact that the PokerStars’ casino application will not be ruled on by state gaming regulators until sometime in August. In its defense, PokerStars says that under the New Jersey Casino Control Act no purchase agreement can be terminated if an application is pending.
Irreparable harm is being cited by the Atlantic Club as the basis for their request. They content that if they have to wait many months until PokerStars gets its license they are likely to lose current competitive bids and potential profit on the property. They content that the market is hot right now and fear that it will cool by the time the restraining order expires. In addition, they believe that PokerStars may not get their license from the gaming officials in New Jersey. The fact that two former PokerStars’ executives are fugitives was cited as a reason for PokerStars to not get their license.
The two former execs are Isai Scheinberg and Paul Tate. Both were indicted in 2011 and remain at large. The Atlantic Club went on to say that Scheinberg still acts in the capacity of company executive. This allegation comes from a call between Scheinberg and Eric Matejevich, Chief Financial Officer for the Atlantic Club. The call took place just before the contract expired. A part of the agreed upon settlement between the U.S. Department of Justice and PokerStars was that Scheinberg had also agreed that he would no longer be a part of company affairs. The Atlantic Club contends that if he is still working in of the day-to-day activities, he is violating the agreement made with DOJ.
In addition to the above, the lawsuit also addresses the issue of some $11 million that has already been paid out since last year to the Atlantic Club. This was to keep the club running and it was in accordance with the agreement. An additional $4 million will be payable once the contract terminate. In their defense, PokerStars claims the $15 million purchase price for the casino is being paid and if the agreement is thrown out they will be left empty-handed.
Attorneys for the Atlantic Club were not impressed with that charge and state that PokerStars knew it was taking a chance when it agreed to buy the casino. Just because the NJ operating license was not approved by April 26 is the fault of PokerStars and no one else. They further contend that they are honoring the agreement as it was set forth.