5050 Poker to be liquidated; players to receive 15%

Posted by Steve Ruddock on Jul 05, 2012 Posted in Poker News | No Comments »

The saga of 5050 Poker and the Microgaming Poker network seems to have come to the final chapter and for players at the site the news is not good at all. According to a shareholders report released on Tuesday the site will be liquidated after being terminated by the Microgaming Network; players at the site will only be receiving about 15% of their accounts according to the memo.

“It has become clear that the losses in 5050 Poker Ltd has been built over a longer time, (more than one year). Due to the fact that incorrect information about the size of players’ funds and the size of the company’s assets has been presented to the Board of Directors, this situation has gone undetected. The request for bank guaranties from LGA cannot be met by the company, thus leaving 5050 Poker Holding AB no other option than to liquidate its subsidiary 5050 Poker Ltd.

“This will most likely mean that most of the assets available will be used as paybacks to the players on a proportional ratio. Even though the exact figures are not available at the moment, there is no reason to believe that the payback ratio will be higher than 15% of the actual balance of the players’ funds.

“It is unclear how this situation has gone undetected by the appointed Auditors in Malta for 5050 Poker Ltd, nor by the auditors for 5050 Poker Holding AB, both having revised the accountings for 2011.”

The problems between 5050 Poker and the Microgaming Network began several weeks ago when the site was suspended for not abiding by the network’s policies. The two entities then were involved in a war of words, with both blaming the other for the issues at the site and between 5050 Poker and Microgaming.

According to 5050 Poker, Microgaming sanctioned the site by limiting the number of tables players from 5050 Poker were capable of playing at one time from 20 down to just 2 (Microgaming has strict policies regarding sites and the number of winning, high-volume players they bring to the network) which crippled 5050 Poker’s ability to generate revenue according to their shareholder’s report. This led to a number of players requesting cashouts and taking their funds to other online poker rooms:

“On the 12th of June Microgaming, without prior warning, limited the number of tables that can be played simultaneously by one player from 20 to 2, seriously affecting 5050 Poker Ltd.’s ability to pursue business. As a result, a critical mass of players decided to leave 5050poker and withdraw their money. This “bank run”, in addition to that Microgaming continuously has been fining 5050 Poker Ltd for having too many winning players, made visible that there was a negative balance in the clearing house, i.e. there were not enough money in the company account to cover the player’s balances. As a consequence of this negative balance Microgaming decided to shut down the operations of 5050 Poker Ltd on the 15th of June. Since then, the company has been investigating how this situation could occur and how much money that is available to cover the players’ balances.”

In between this initial step by Microgaming and the recent news that the site and its holdings would be liquidated, Microgaming initially suspended the room before taking the final step of terminating their contract with the prominent poker network.

You can read the entire shareholders report at the following link: https://5050poker.com/en

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