UB and Absolute Poker Address Bankruptcy RumorsCompany Says They Have No Cash On Hand And No Prospects For Any Cash Flow For The Foreseeable Future |
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UPDATE Blanca Gaming Issues Press Release Concerning Company Restructuring
Absolute Poker and UB to Focus on Non-U.S. Business
St. John’s, Antigua and Barbuda (May 5, 2011) — Blanca Games Inc. (“Blanca”), operator of online poker rooms Absolute Poker and UB, issued the following statement today:
As previously stated, Absolute Poker and UB ceased their U.S.-facing operations due to recent legal developments in the United States. The company is currently restructuring and is focusing its resources on consolidating its non-U.S., rest-of-the-world operation and software business. In order to have a more efficient and successful future business, an immediate need to downsize and streamline operations significantly at both online poker rooms has been required. Absolute Poker and UB continue to operate their non-U.S.-facing business.
This decision comes after considerable review and analysis of the impact that ‘Black Friday’ has had on the business as a whole. The workforce has been liquidated, and the process of rehiring approximately 20% of staff in key positions has commenced. All affected employees have been informed of this necessary restructure.
A company spokesperson said: ”We regret that we have been compelled to take these actions. We have worked tirelessly to create a truly amazing company that is filled with extraordinary people. We have always been and still remain fully committed to our employees and players. At the same time, we are confident that this restructuring will strengthen the company and its future.”
The Company spokesperson also addressed erroneous reports that Blanca has filed for bankruptcy. The apparent confusion over this issue stems from the fact that Blanca recently informed a debt holder, Madeira Fjord, that it was terminating debt payments to, and its relationship with them. As a result, Madeira Fjord apparently filed a notice of bankruptcy in Norway. This notice has no negative impact upon Blanca, the operating company, or its brands. As stated previously, Absolute Poker and UB continue to operate their non-U.S. facing business around the world.
For non-U.S. players, Absolute Poker and UB have increased their maximum withdrawal limits to $1000 for Visa withdrawals and $500 for all other methods. The number of transactions being processed per day has been significantly increased as well. Players are still restricted to one transaction per week, but we are working to return non-U.S. withdrawals to normal service levels as quickly as possible.
As confirmed earlier this week, the company’s legal counsel is in continuing discussions this week with the U.S. Attorney’s office to formalize an agreement that would facilitate the return of funds to U.S. players.
On Wednesday, MSNBC reported that Madeira Fjord, a debt holder for Blanca Gaming, the owner of the Cereus Poker Network that includes both UB and Absolute Poker, would be filing for bankruptcy in Norway.
In the email sent to shareholders, Madeira Fjord stated that they had “no cash on hand and no prospects for any cash flow for the foreseeable future.” Blanca Gaming “is currently unable to make any payments towards its debt obligations” and “has further advised that there will be no future payments.”
You can read the complete email below.
Dear xxxx Shareholder,
Since the last meeting of shareholders, there have been a number of developments that affect our Company.
Most importantly, Blanca Gaming has provided notice to our subsidiary Avoine that it is currently unable to make any payments toward its debt obligations. Additionally, Blanca has further advised that there will be no future payments.
Over the past 60 days, the Company has accumulated current debts in excess of $250,000 which are increasing at $100,000+ per month. These obligations are primarily legal and professional fees in Norway.
With no cash on hand and no prospects for any cash flow for the foreseeable future, the Board of Directors is required by Norwegian law to enter the bankruptcy process. The Oslo court will appoint a Receiver who will review the affairs of the Company including the assets, liabilities, and its recent transactions. After a full assessment, the Receiver will make a determination how to enforce any applicable rights, obligations, and obtain the maximum value for its assets in the best interest of the Company.
As the Receiver is a court appointed 3rd party, we can be assured that the Receiver will evaluate all relevant options including any applicable soliciting proposals from interested parties related to the assets of the Company. Funds accumulated through the Receivers’ efforts will be disbursed according to Norwegian law.
As of the date of the filing, the Board of Directors is relieved of duty, and all future matters are in the sole control of the Receiver.
Sincerely,
Madeira Fjord, AS Board of Directors
Approximately 95 percent of UB and Absolute Poker employees have already been laid off at the Costa Rican operations center.
According to an unnamed source, shareholders were in the process of selling the company last month, but the indictment hand down by the Attorney’s Office for the Southern District of New York on Black Friday made that prospect unlikely. Scott Tom and Brent Beckley, the founders of Absolute Poker, were two of the 11 people named in the indictment by the Department of Justice.
While the company faces $500 million in penalties for alleged crimes such as violation of the Unlawful Internet Gambling Enforcement Act (UIGEA), bank and wire fraud and money laundering, questions remain about whether or not current players will eventually be able to withdraw their funds from the site.
PokerStars and Full Tilt Poker were also named in the indictment, but both sites are currently working with the government to allow withdrawals for U.S. players. PokerStars has already begun the process and thousands of players have already received their funds.
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