UB/AP Players requesting help from legal minds

[wems]

its nice to get these things set up but I believe we are jumping the gun a little bit here. Cereus is still saying they are planning to pay us back and are working out ways to do it. Whether or not this is the case I don't know but it does not seem like much can be done unless we know for certain that we are not getting our money back

[fieldsofmars]

Originally Posted by Thinky

Skallagrim,

Thank you very much for your posts. You are asking us to get organized so that we are ready to act when the time comes.

Here's what I feel we should do:

1. Form the group of players and elect someone to lead the efforts
2. Create a website for this initiative and make sure we get the word out. I'm sure we could request one of the neutral poker related sites to give us some publicity.
3. Form a plan to contact lawmakers/DOJ or whatever when the **** officially hits the fan.

Any other suggestions are welcome, but I definitely feel like we should get started with the website and form the group ASAP. Who wants to take the lead? I have a pretty busy schedule with family and work commitments. I'm a PPA premium member and can get in touch with Skallagrim for litigation support.

GatorXP, Are you up for it? How about you SUFFER?

I'm not sure I want to be the main leader of the group but if you guys feel I would be one of the better people in charge I will try to help lead the way. I think GatorXP has done a lot more then I have though but I would be willing to talk with GatorXP and others who are interested in initiating something and getting it set up. That being said we all have to work together on this and I am not sure if it is time to get something set up. UB/AP still says they are going to pay. I don't know if we are jumping the gun yet or not and I really am not sure where to start. This thread is a good start and I think we should get some type of web site set up and go from there and I would definitely be willing to be one of the officers or something of that nature.

[RE_Mogul]

down to do whatever to get heard

97K on there...fml

[sasha]

I have little over 100k on there , also down for whatever

[DeepJR]

I'm in. GatorXP you should answer me on skype so I can add my infos to your list.

[DeepJR]

I recommend you read this article by following the link, it is easier on the eyes:

https://www.hogan4u.com/05/absolute-...lions-players/

Absolute Poker / Ultimate Bet File Bankruptcy – Millions In Player’s Funds Placed In Doubt


UPDATE 2: After giving this some more thought, I find myself even more confused as to what purpose it served for Madeira Fjord to file bankruptcy. Generally speaking (in America) there is only one reason for a corporation to file bankruptcy and that is to restructure debt. If a business fails theirs almost never a good reason for the company to declare bankruptcy, instead it best to just dissolve the company. While obviously my knowledge of Norwegian law is less than adequate, I cannot see a good reason for this “liquidation” bankruptcy for Madeira Fjord. I am thinking that it may be serving another more insidious purpose of severing ties of shareholders to the company. The bankruptcy may just simply be an ultimate CYA move.
UPDATE 5/7/11: It appears Bianca games has denied the bankruptcy rumour. Claiming only Madeira Fjord has filed bankruptcy. This answers some of the questions I pose at the end of this blawg post. However, it raises quite a few new ones. Additionally, Bianca games denies that player funds are missing and the they are working to return funds to players. (I’ll believe it, when I see it.)
As I pointed out in the original article, the debt holdings of Madeira Fjord are really nothing more that a firewall between the owners of the company and the “illegal” gambling activities of the company. It seems to me that it is theoretically possible for a player to file for an involutary bankruptcy proceeding in Anitgua against the Bianca. I am not too familiar with Antigua bankruptcy law, but I will say this, it is the for players who have tens of thousands on the site it may be in their best interest to explore whether or not it is possible. (I wonder how one gets admitted to practice law in Anitgua, maybe I can represent some players and make a run at it…)
On April 15th, in what the online poker community has since dubbed “Black Friday,” the FBI seized and effectively shut down the three largest online poker sites. Those sites being Pokerstars, Full Tilt and Ultimate Bet/Absolute Poker. While both Full Tilt and Pokerstars have apparently worked out a deal with United States officials allowing return of US players funds, it appears customers of UB/Absolute will not be as lucky.
The internet is abuzz with the pronouncement and for readers of this blog seeking the most up to date information, I highly suggest you follow the threads at the poker website 2+2, the leading online poker community. Because this is a bankruptcy blog, I will try to give a breakdown on the legal questions that arise from the UB/Absolute bankruptcy filing.
Before I get into legal mode, I think it best to first give a brief history of UB/Absolute as an online poker site. Ultimate Bet and Absolute Poker are part of what is called a poker network. During the initial years of the “poker boom” (a term of art used to describe the explosion in interest in all things poker after a unknown amateur poker player won the World Series of Poker with the apt birthname of Chris Moneymaker) Internet poker sites were popping up like popcorn all across the Internet. Most of these sites disappeared as quickly as they came failing to establish the player base needed to keep the site afloat. It was the classic chicken and the egg problem, a site needed to draw players to develop a player base and players wanted to play where ”everyone else” was playing. To combat this problem many sites teamed up and created networks that “shared” player pools. As an example, player “A” would log into poker site “X” and player “B” would log in to poker site “Y”, and although both players were using different software and looking at a different userfaces, they would still be playing against each other over the same “virtual poker table.” The most successful of these networks ended up being Cereus Poker Network and the sites hosted on the network were Ultimate Bet and Absolute Poker who merged sometime in the mid 2000’s. However the core of the company remains in the founders of Absolute Poker who are among those indicted last month.
Absolute Poker was founded in 2003 by a collection of college students in Montana. The initial start up capital came from wealthy family contacts located in Tampa, Florida. All of the initial investors and owners of the company were American citizens. The citizenship of the owners/investors is an important because the bankruptcy filing taking place in Norway. There are intriguing legal ramification of this and, as discussed below, the trek from American ingenuity and investment to Scandinavian bankruptcy filing is an interesting one. When Absolute was founded in 2003 the legality of online poker was unclear. This uncertainty necessitated the initial investors to set up shop in Costa Rica (the same Caribbean country that Pokerstars also chose to operate from). Then in 2006 the online poker world shook with the passing of the Unlawful Internet Gambling Enforcement Act (UIGEA). The bill was inserted into a “must pass” port security bill by then Senate Majority Leader Bill Frist as an attempt to pander to social conservatives during his initial ramp up for a 2008 presidential bid that never materialized. Facing uncertainty as to how this bill was to be enforced, the investors of the Absolute Gaming went about setting up a system that would shield them from the legal ramifications of operating a now illegal website but still allowing an avenue to reap the profits. The solution? Split the assets in two. They sold the “poker” aspect of the business to Tokwiro Enterprises, owned by Joseph Tokwiro Norton, former grand chief of the Mohawk Council of Kahnawake in Canada for $1 million dollars. This is important because this Indian Council provided the “license” to operate the “gambling” site. They then kept the what was left over, the “software” which was not illegal for the American investors to own. However a year later they further insulated themselves by transferring the software “rights” to Tokwiro in exchange for a $250 million IOU that was to be paid out as dividends at 12% interest.
Absolute shareholders, which by this time had merged with Ultimate Bet under the Cereus Netwrok banner, then set up a tax haven for these interest payments by creating a new Norwegian entity called Madeira Fjord and transferring all of Tokwiro interest to Madeira Fjord.
While of these backroom shenanigans were taking place, theCereus Poker Network almost imploded in its own right with the shocking discovery of “superusers” on their system. Essentially what happened was a high level employee named Russ Hamilton (a former WSOP champion), along with others, are alleged to have set up dummy player accounts that could “see” other player’s cards at any given table. The scam resulted in the theft of millions of dollars from Cereus customers over a multi year period beginning sometime in 2005. (Check out how the superuser accounts were found by the online poker playing communityit is a fascinating read.) In the wake of this controversy, not even Norton, the former Kahnawake chief, could guarantee that the tribe would not revoke Cereus’ gaming license. In response and to help win back the trust of players, Madeira Fjord built duplicate software and a second server farm in Panama. It then moved the poker operation to Antigua, creating a new company called Bianca games.
After the Bianca Games take over there was an exerted effort to regain the trusts of players. An effort that may have been successful but in the end a ruse. Online Poker sites keep player money in supposed user account, the rationale is that it would be impossible to continually process financial transaction every time a player logs in. Because online poker sites keep millions of dollars in customer funds trust is of the utmost importance. To ensure that players funds are secure poker sites promise that player monies are held in trust and are not commingled with company assets or used to pay liabilities. It appears that both Full Tilt and Pokerstars have been true to the word regarding this promise. However, it appears this is not the case for Cereus. The U.S. Attorneys office has said that it was willing to work out a deal in which the company could return funds back to US players. However, not only has the Bianca declined to do so but they are no longer honoring non-US players withdrawal requests. It appears that any player money that was on the site is now long gone.
With the filing of bankruptcy and millions of dollars in player funds missing it appears these players will not see an improvement in their luck in a bankruptcy court. The players will be considered unsecured creditors and the liability underlying the missing money will be discharged in the bankruptcy.
However there are still some intriguing legal questions both bankruptcy and otherwise:
1. How can Blanca Games file bankruptcy in Norway if their ownership is a direct result of a transfer of ownership in Antigua?
2. Will a discharge under Norwegian law prevent a “piercing the corporate veil” action?
3. Can a class action suit be brought on behalf of players against the shareholders individually? Who would have jurisdiction?
4. Can an adversary filing by a creditor kick the case out of a Norwegian court?
5. Is there any way a creditor could file an involuntary bankruptcy action in America against any original shareholder/owner?
Legally speaking, these are very difficult questions and I do not know the answers to them. I do however promise due diligence and will report back with my findings.
Orlando, FL Bankruptcy Attorney,
Ryan Hogan

[DeepJR]

I used the "contact us" form on his site to send him this (hasty and unprofessional) email:

Hello Mr. Hogan,

I just read your article (https://www.hogan4u.com/05/absolute-...lions-players/) on the Madeira Fjord bankruptcy. Since 4/15 I have been following the bits and pieces Cereus related news with increasing trepidation. I am one of the players "with tens of thousands of dollars" you refer to in the article.

I realize you cannot give full legal advice through email, but I am just looking for some preliminary information (I have no legal background). What is an involuntary bankruptcy filing? How fast do bankruptcies move? Would this have to be done very soon, or do players have a few days/weeks to take this kind of legal action?

There is a growing group of former Cereus players organized through 2plus2 forums that has over 100 members and $6million in our Cereus accounts. As we continue to grow and organize we will likely be looking around for legal representation. Any preliminary answers and help you can give me (and the rest of us) in this matter would be greatly appreciated.

All the best,
XXXX

If no one feels compelled to take charge on this group for now we should all at least be trying to do THE LEAST that we can. Anyone with any amount of money they would hate to lose should at least be contacting you friends, family, and family friends as well as random internet sources (as I just did) so that we can get a decent sampling of "legal minds" and ideas.

There is to my knowledge no great legal expert in "shady international internet poker companies filing for bankruptcy behind multiple smokescreen shell companies". If we lack expertise we need to be forging contacts with as many potentially helpful people as possible.

[Gildwulf]

Originally Posted by BrassMonkey

I have 25k on Absolute, and am definitely interested in action, if the opportunity presents itself.

. pm me I would be willing to pay for lawyer fees

[CrazyMan1122]

Originally Posted by fieldsofmars

I don't have a 5 figure roll but I'm not too far away from 5 figures on there. I didn't need a roll of 65k on there (well 62k before black friday) and I guess now I am paying the price for it.

6 - 1
5 - 2
0 - 3
0 - 4
0 - 5

[newb07]

Hi guys I have about 38k on AP and I would be willing to pay a few thousand up front to pay for a lawyer if the consensus is that we should go that route. Thanks to skall for the info so far.

[reztes757]

i asked this last night but no one responded. If we got in contact with someone from the DoJ involved in the case, what could they tell us about the talks? Could they even tell us if Cereus is making serious attempts at deal, or if they are just dodging talks and stonewalling them or would they just say they are not allowed to comment on anything? Knowing if Cereus was seriously attempting to make a deal to get our money back would be very useful information as far as all of us getting lawyers involved goes. Would contacting their US law representation accomplish anything? Would making their law firm aware of our group be of any use?

[Thinky]

Originally Posted by reztes757

i asked this last night but no one responded. If we got in contact with someone from the DoJ involved in the case, what could they tell us about the talks? Could they even tell us if Cereus is making serious attempts at deal, or if they are just dodging talks and stonewalling them or would they just say they are not allowed to comment on anything? Knowing if Cereus was seriously attempting to make a deal to get our money back would be very useful information as far as all of us getting lawyers involved goes. Would contacting their US law representation accomplish anything? Would making their law firm aware of our group be of any use?

1. We don't have a DOJ contact, neither does the PPA. Also, I highly doubt the DOJ would be willing to provide us any information since they are likely still building the case.

2. I think contacting lawmakers/senators might help but as Skall suggested we got to wait and see how this unfolds.

3. There is a zero chance the law firm hired by Cereus will help us. It's not like they are in the business to provide justice to the general public. They get paid big bucks to defend the crooks in Cereus.

[DavidTth]

in for anything

[newb07]

Originally Posted by reztes757

i asked this last night but no one responded. If we got in contact with someone from the DoJ involved in the case, what could they tell us about the talks? Could they even tell us if Cereus is making serious attempts at deal, or if they are just dodging talks and stonewalling them or would they just say they are not allowed to comment on anything? Knowing if Cereus was seriously attempting to make a deal to get our money back would be very useful information as far as all of us getting lawyers involved goes. Would contacting their US law representation accomplish anything? Would making their law firm aware of our group be of any use?

I've called the NYC's US Attorney's office twice now and talked to a low level attorney once and the assistant press secretary once (I just called the general number and kept saying I wanted to speak to someone regarding the poker site indictments and I kept getting transferred). Both times I talked for about 10 minutes and was given no information. The phrase "I can't comment on that" must have been uttered 100 times. They are definitely not giving out any information. I even specially asked if Cereus was actively engaged in talks and once was told "our press releases speak for themselves" implying no (this was about 2 weeks ago) and another time more recently was given the "can't comment" line.

[Legend]

How come the site works as usual, games are going on, they do allow players to deposit, yet they don't process withdrawals ?

I'm a non US player, I submitted a cash out request more than a week ago but it hasn't been processed. I sent them an e-mail but didn't get a reply.

Yet the games are going as usual as if nothing happened. And players can deposit.

Isn't that a theft ?