Epic Poker League bankruptcy details disputed

Posted by Steve Ruddock on Mar 17, 2012 Posted in Poker News | No Comments »

In our most recent Friday Wrap, one of the stories we touched on was the Epic Poker League’s Chapter 11 Bankruptcy filing, which Cardplayer Magazine pored over for a hard-hitting expose on how the EPL (controlled by Federated Sports + Gaming) was operating before and after the filing.

Needless to say, Cardplayer’s article did not paint the EPL and its executives in a good light, with several allegations leveled that led many readers to believe the company was about as well run as Full Tilt Poker, and needless to say that the EPL executives were not pleased with the article. Two Federated Sports + Gaming executives, Jeffrey Pollack and CEO David Goldberg, went so far as to address the allegations at PokerNews.com.

Chief among the allegations was that Federated Sports + Gaming was using revenue from the Heartland Poker Tour (which they agreed to purchase earlier this year) to pay FS+G salaries during the Bankruptcy reorganization, to the tune of over $450,000 for three months. Making matters worse was that FS+G had never paid the HPT the agreed upon price, so in essence Cardplayer was claiming that FS+G was trying to use revenue from a company they didn’t own to pay executive salaries!

A second charge claimed that FS+G had only $15,000 cash on hand, and owed over 100 creditors (including charities) over $5 million. Pollack and Goldberg addressed these accusations at PokerNews.com, saying:

“We’re not disputing those things that have been filed with the court,” Goldberg said regarding the $5 million the story said they owed, and the fact that FS+G had only $15,000 in cash at the time of filing. “The $45,000 budget that is listed in there is for, what I would call, Federated Sports + Gaming expenses. There’s a separate budget that sort of relates to all the Heartland Poker Tour expenses. That number is greater.”

“We initially filed looking at a three-month budget,” Goldberg added, “but pulled that filing instead to go look at this on a month-to-month basis, so I think, unless I’m wrong, the figure they might have been throwing around was what was initially filed for a three-month budget. Instead, we started to look at this month-to-month because we think we that we will get resolution on our situation fairly soon . . . I think it’s safe to say we can resolve things in less than 90 days.”

Just hours after FS+G disputed the claims, Cardplayer fired back with an article linking to all of the pertinent parts of the FS+G Chapter 11 Bankruptcy filing, with two of the five bulleted points regarding the amount they requested for an operating budget [bold mine]:

2. Motion for Emergency Use of Cash Collateral, which, on page 11, details Federated Sports and Gaming request for $458,092 in wages for March-May 2012 and total outflow of $685,312 while in Chapter 11 bankruptcy. Heartland Poker Tour projected inflow during same period listed as $675,000.

4. Cash Collateral Authorization after first Federated Sports and Gaming Motion for Emergency Use of Cash Collateral was not granted. Revised Federated Sports and Gaming budget approved for March 2012 of $45,000 verses $259,460 request on initial motion.

Another dispute regarded whether or not the court had rejected a reorganization plan, which Goldberg stated “No plan has been rejected. However, the above links from Cardplayer clearly show the court initially rejected their three-month budget was not granted, which led to the revised budget proposal.

It seems this feud may go on for a bit longer, so for those of you who haven’t read the original articles, here are all of the links:

* Original Cardplayer Article: Epic Poker Bankruptcy Leaves Mountain of Debt

* FS+G response at PokerNews: Federated Sports+Gaming Statement; Jeffrey Pollack & CEO David Goldberg Elaborate

* Citations and Source article from Cardplayer: Bankruptcy Documents for the Epic Poker League

*For disclosure purposes, it should be noted that Pokernews.com teamed up with the Global Poker Index (which is owned by Federated Sports + Gaming) to create a Player of the Year leader-board.*

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