Epic Poker Bankrupt, Denied Reorganization Plea
Epic Poker, one of the noted online poker companies, had declared bankruptcy after it had accrued debts amounting to more than $5 million and lacked the funds to pay back its creditors. The poker company filed for Chapter 11 bankruptcy and made a reorganization plea.
However, a recent news report confirmed that Epic Poker was denied its case and received a rejection of its reorganization plea on the basis that it had accumulated too much of debt in the period after filing for bankruptcy.
The Epic Poker site is run by Federated Sports and Gaming, its parent company and the bankruptcy pleas were made by this enterprise after the Epic Poker site closed down in February.
According to court reports, Epic Poker is $5 million in debt of which it owes more than $4 million to 2 of its biggest creditors.
Jeffrey Pollack, the Executive Chairman of Federated Sports and Gaming seemed to look at the bankruptcy plea as an opportunity to start afresh. “Our company needs a new start. This reorganization filing is an important first step in that direction,” he said. Unfortunately, given the recent court report, it is not likely that Epic Poker will be able to move forward.
The reason for Epic Poker getting into this big mess was because it bit off far more than it could handle. The company has more than a 100 creditors but owes most of the funds to two these large companies. When the company made a move to buy the Heartland Poker Tour from All in Production – they stepped on the train to bankruptcy. They now owe more than $2 million to All in Production and were not even able to make their first payment. In order to stabilize things the company borrowed $2 million from Pinnacle Entertainment but has not yet been able to re pay the money.
Numbers from the court reports reveal that, “$1,000,000 of the funds Pinnacle advanced were utilized by the Debtors to pay down a creditor of Federated Heartland, All In Production, LLC, by $1,000,000.” This sum caused All In Production to extend its payment due date for Federated Sports and Gaming to the end o f the month of March, 2012.
As the company had borrowed money from Pinnacle Entertainment they were required to pay it by the end of the month of February 2012, but filed for bankruptcy before the payment period could end. This clever move on their part has also managed to block All In Productions from retaining the Heartland Poker Tour.
Daniel Negreanu, the reputed and outspoken poker player spoke out against Epic Poker. “The truth is, he’s (Pollack) been running a bluff on many in the poker community for a long time. He was booted from the WSOP [as commissioner] but saw a day when legalized online poker was coming and thought he could get his hand in the cookie jar at the absolute right time. He thought, throw together and create a brand and hope to hit a big score. Under this strategy, you just don’t care about having a sustainable business plan,” he said.
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