Friday, August 10, 2012
Cozen O’Connor, among the 100 largest U.S. law firms, announced today that firm attorneys successfully represented the Full Tilt Poker companies in consummating the transfer of Full Tilt Poker’s assets to PokerStars. The asset transfer to PokerStars was consummated immediately following confirmation that the United States government received the first payment from PokerStars of $225 million due under a settlement agreement announced last week with the US Department of Justice (DOJ).
Under the terms of the settlement, approved by the United States District Court for the Southern District of New York on July 31, the transaction closed upon receipt of payment, confirmed by the DOJ on August 9, 2012. PokerStars has 90 days from closing of the transaction to make available for immediate cash withdrawal the online account balances of all non-US Full Tilt Poker players, a total amount estimated to be $184 million.”
Full Tilt Poker’s settlement agreement with DOJ resolved civil forfeiture proceedings brought by the DOJ against Full Tilt Poker through the asset sale. The DOJ’s involvement in a large purchase of assets out of forfeiture is rare. Anne Madonia, a member of the Corporate Law Practice Group at Cozen O’Connor, led the team who negotiated and structured the deal on behalf of Full Tilt Poker.
“We are very happy to have helped Full Tilt Poker accomplish their primary goal through this process, which has always been the compensation of the players,” Ms. Madonia stated. “After analyzing all of the potential alternatives, this deal is a great outcome for all the stakeholders, including players, employees, owners, vendors and regulators.” Because PokerStars and Full Tilt Poker were two of the leading online gambling websites before what has become known as Black Friday in the online gambling community, the deal has received scrutiny around the world. The transaction involved a 16-month process that began with multiple potential buyers, and concluded with negotiations between DOJ, PokerStars and Full Tilt Poker. The complex asset transfer involved significant intellectual property in multiple countries; the 24 Full Tilt Poker companies are located in Ireland, the United States, Cyprus, Switzerland, the Bahamas, Aruba, the British Virgin Islands and Alderney (Channel Islands). There were two transaction closings, in the United States and Dublin.
The settlement transaction ultimately requires PokerStars to pay the United States government $547 million to resolve the civil forfeiture proceedings, and sets the stage for Full Tilt Poker players to be compensated. Under the terms of the agreement, the United States government has agreed to provide an opportunity for all US players to request compensation out of these funds for their losses.
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