Pinnacle Entertainment, Inc. put in the winning bid on Thursday to acquire the Heartland Poker Tour (HPT) and what’s left of Federated Sports+Gaming (FS+G).
HPT’s auction price was $4.2M. Pinnacle acquired the remaining assets of FS+G for a $300,000 credit bid. This isn’t actually money that comes out of Pinnacle’s pockets, it just comes off the tab of what FS+G already owed them.
Pinnacle’s $300,000 credit bid was the highest offer for FS+G.
Founded by Jeffrey Pollack, Annie Duke, Jeffrey Grossman, David Goldberg, and others, FS+G launched in January 2011, promising to revolutionize poker. They acquired Heartland Poker Tour in June of 2011. In October 2011 HPT sued FS+G for failing to complete its acquisition of the company. By February 2012, FS+G had filed bankruptcy, spending $17M (with over $7M in debt) against around $38,000 in revenue.
Interesting part of the court doc is it appears a creditor’s committee consisting of 441 Productions, Matt Savage, and others are protesting at least the second payment shipped to All In Production (parent company of HPT) for $1M, claiming it was a “fraudulent transfer” (a term of art in bankruptcy law). Check out paragraph 11 in the below attachment. The creditor’s committee essentially claims that HPT knew FS+G was insolvent at this point, took the money, and that transfer led to FS+G’s demise.
What the creditor’s committee fails to cite is the utter gross mismanagement of FS+G by Pollack and Co. When FS+G filed bankruptcy, they owed over $7M. They spent $17M. They earned around $38k. Think that was maybe, just maybe, the bigger issue?
Anyway, by paragraphs 19 and 20, it appears the creditor’s committee is saying they’ll take legal action against HPT. We’d expect better from 441, Savage, et. al. if they were to actually proceed.
So there you have it. Epic Poker is effectively done. We’ll see if the Palms is obligated to hold the $1M freeroll. Pinnacle now owns HPT, as well as nearly 100 valuable Wicked-related domains.
For people like us who prefer the highlights, the key elements in the below link are paragraphs 8 (auction winning bid), 11 (fraudulent transfer), 19 & 20 (take action against HPT).
Read the court doc in full here.