Amaya And Former PokerStars Owners Clash Over Escrow

Amaya in Dispute With Former PokerStars Owners Over $300 Million In Escrow

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As the case versus Kentucky continues, Amaya finds itself fighting to have the previous owners of PokerStars pay their share of the damages.

In addition to the $870 million ruling in Kentucky that Amaya is currently fighting, the parent company of PokerStars now has a $300 million dispute with the company’s previous owners.

One of the provisions of the agreement under which Amaya acquired the entities that make up and own Rational Group called for an escrow fund to be established. The escrow was to cover expenses for outstanding legal issues from when the previous owners operated the company.

However, Amaya received notice from the company’s previous owners last month indicating that they are disputing the claims made by Amaya in an attempt to collect those funds.

The details outlining the circumstances under which the funds would be distributed have not been disclosed, nor have the specific details of the claims for those funds made by Amaya.

Escrow tapped in past claims

In January, Amaya reached a €5.9 million settlement with Italian tax authorities for discrepancies uncovered in an audit of PokerStars subsidiary Halfords Media Italy S.r.l.—some of which dated back to 2009.

In a press release at the time of the settlement, Amaya announced that the “entire settlement amount and related expenses” were paid out of the escrow account established at the time Amaya acquired PokerStars.

Amaya appealing in Kentucky

Amaya also announced today that it has filed a notice of appeal in its case against Kentucky. Amaya was required to post a $100 million supersedeas bond in order to delay payment on the court’s previous $870 million judgement in favor of the Commonwealth of Kentucky while the appeal is being pursued.

As part of the process of posting the appeals bond, Amaya was required to deliver $35 million in cash as collateral and letters of credit totaling an additional $30 million.

Amaya has vowed to “continue to vigorously challenge” the court decision. A judgement of $290 million in the case was rendered in November 2015, but both Amya and the state elected to appeal the decision.

Kentucky sought to have the damages trebled as a penalty—which is allowed under state law. Amaya argued that it only received $18 million in revenue from poker players in the state over the time period.

Thomas Wingate, Kentucky Circuit Court Judge, sided with the state in late December and raised the amount of the judgement against Amaya to $870 million.

This article is syndicated by the leading poker industry news authority, Poker Industry PRO.

- Michael Gentile is the editor of PokerFuse.
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