FTP Discussion Thread (Everything but big new news goes here. Cliffs in OP)
10-22-2011
, 02:39 PM
You better hope the DoJ, company accounts record it as a dividend
*Apart from Lederer overpaying his brothers company for our FTP merchandise
*Tourney Entries
*If you want cashy to buy houses!!
Houses which are being sold in a repressed market to foreigners for passports

Here come the Russians
US economy: Foreign home-buyers sought
Last edited by vamooose; 10-22-2011 at 02:50 PM.
10-22-2011
, 02:43 PM
centurion
Join Date: Sep 2011
Posts: 130
When the "company" pays a "dividend" to a "partner" to knock off a competitor it's really just hit money. When con men divide up the money from the con, it's really just theft. The issue is: guys so stupid they can't walk and pick their noses at the same time or con artists who set out to bilk everyone figuring there'd always be a another sucker reloading.
10-22-2011
, 02:56 PM
Join Date: Oct 2006
Posts: 132
An employee can only be made redundant if their job no longer exists - for example due to restructuring. Pocket Kings cannot subsequently employ someone else to do that job, they would be liable to a claim for wrongful dismissal and the employee could be compensated and reinstated. After their probation period, an employee can only be fired/terminated for serious misconduct and then usually only after a series of warnings.
Last edited by pelerin; 10-22-2011 at 03:08 PM.
Reason: add bit about fired
10-22-2011
, 03:02 PM
10-22-2011
, 03:17 PM
I am not sure of this, but AFAIK, stolen money which was obtained through a valid transaction which has been concluded is not returnable. If I am wrong, please cite.
Furthermore, it is unlikely that the money shareholders received can be considered stolen money. IF there was stolen money, legally the Directors have it.
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In case people can not understand why this is the way it is it would essentially become impossible to recover anything that is stolen if all you had to do is transfer ownership. I rob a bank and a friend of mine is outside and I hand him the money. Now the money can never be recovered?
With all due respect, markksman, you clearly don't have enough knowlege of the applicable laws to be making a useful contribution on this matter. I'm not suggesting you need to have the knowledge of a judge. God knows I don't. I am sure I must be getting a few things wrong. Sometimes I think I should stop posting because, not being a lawyer, there is a chance I am leading people astray Then I remember this is NVG, and even lawyers make mistakes.
But nothing I have posted has the quantity of fail you just displayed. I have been exposed to the laws regarding Director liablity for three decades. I have received legal advice on the matter from highly qualified lawyers. When commenting on aspects of the law I am less sure about, I read first, post second. If you did just a fraction of this, you'd have far fewer errors and irrelevancies in your posts.
(I now await the post from some lawyer pointing out the 18 errors of law I just made in this post - karma's going to get me
10-22-2011
, 03:24 PM
10-22-2011
, 03:39 PM
Quote:
An employee can only be made redundant if their job no longer exists - for example due to restructuring. Pocket Kings cannot subsequently employ someone else to do that job, they would be liable to a claim for wrongful dismissal and the employee could be compensated and reinstated. After their probation period, an employee can only be fired/terminated for serious misconduct and then usually only after a series of warnings.
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....
99% of the time 'Redundancy' is used, it is because the workforce will not be replaced. In fact, it is illegal under employment law thorough out UK (I know this Ireland but similar if not same rule) to re-employ is same job roles after former employees have been made redundant.
Doesn't mean another company couldn't come in and re-employ that workforce thou....just not Pocket Kings. This obv not being considered a realistic option thou.
Redundancy is a form of dismissal from your job, caused by your employer needing to reduce the workforce. Reasons could include:
new technology or a new system has made your job unnecessary
the job you were hired for no longer exists
the need to cut costs means staff numbers must be reduced
the business is closing down or moving
99% of the time 'Redundancy' is used, it is because the workforce will not be replaced. In fact, it is illegal under employment law thorough out UK (I know this Ireland but similar if not same rule) to re-employ is same job roles after former employees have been made redundant.
Doesn't mean another company couldn't come in and re-employ that workforce thou....just not Pocket Kings. This obv not being considered a realistic option thou.
Redundancy is a form of dismissal from your job, caused by your employer needing to reduce the workforce. Reasons could include:
new technology or a new system has made your job unnecessary
the job you were hired for no longer exists
the need to cut costs means staff numbers must be reduced
the business is closing down or moving
10-22-2011
, 03:44 PM
Join Date: Oct 2006
Posts: 132
10-22-2011
, 04:07 PM
Quote:
You are generally correct that one cannot keep stolen property. Property and money are not the same thing.
I am not sure of this, but AFAIK, stolen money which was obtained through a valid transaction which has been concluded is not returnable. If I am wrong, please cite.
Furthermore, it is unlikely that the money shareholders received can be considered stolen money. IF there was stolen money, legally the Directors have it.
This is nonsense. Either the owners are entitled to the payments or they are not. If entitled, they don't have to give them up. If not entitled, there is nothing for them to go after FTP for.
I think you will likely find that whether stolen cash is recoverable from somebody other than the thief will depend upon how he came to be in possession of the cash. If it was by means of a valid, bona fide transaction, the cash is not recoverable. However, I know almost as little Irish law as you, so I could be wrong.
Of course this is not the case. You handing him the money is not a valid transaction, and you do not have an arm's length relationship from him in this case. It is as recoverable from him as it is from you.
Actually, in most states, you must know the goods are stolen to be guilty of being in possession of stolen goods. Also in most (perhaps all) states, you are not guilty of being in possesion of stolen goods if all you are in posession of is cash. Cash is not goods.
True that you will have to give it up. True that the police will give you no compensation for it. Depending on the circumstances you may be able to pursue compensation from the person who sold it to you. All totally irrelevant to the issue of whether dividend payments are recoverable from non-Director shareholders, since dividend payments are not sales of goods.
You have no right to the ATM money. In the case of Directors making improper dividend payments to you, you may well have a right to the money, in the same way that you have the right to keep a monetary gift. Since the Dividend is improper, the Directors are personally responsible for the money improperly taken from the company. If they are responsible for the money, it follows that you the shareholder are not. If the Directors are responsible for that money, it follows that the money they gave you is not the money taken from the company. Hence it is just a gift from the Directors to you, paid out of their personal assets, and you have no obligation to the company for it.
With all due respect, markksman, you clearly don't have enough knowlege of the applicable laws to be making a useful contribution on this matter. I'm not suggesting you need to have the knowledge of a judge. God knows I don't. I am sure I must be getting a few things wrong. Sometimes I think I should stop posting because, not being a lawyer, there is a chance I am leading people astray Then I remember this is NVG, and even lawyers make mistakes.
But nothing I have posted has the quantity of fail you just displayed. I have been exposed to the laws regarding Director liablity for three decades. I have received legal advice on the matter from highly qualified lawyers. When commenting on aspects of the law I am less sure about, I read first, post second. If you did just a fraction of this, you'd have far fewer errors and irrelevancies in your posts.
(I now await the post from some lawyer pointing out the 18 errors of law I just made in this post - karma's going to get me
)
I am not sure of this, but AFAIK, stolen money which was obtained through a valid transaction which has been concluded is not returnable. If I am wrong, please cite.
Furthermore, it is unlikely that the money shareholders received can be considered stolen money. IF there was stolen money, legally the Directors have it.
This is nonsense. Either the owners are entitled to the payments or they are not. If entitled, they don't have to give them up. If not entitled, there is nothing for them to go after FTP for.
I think you will likely find that whether stolen cash is recoverable from somebody other than the thief will depend upon how he came to be in possession of the cash. If it was by means of a valid, bona fide transaction, the cash is not recoverable. However, I know almost as little Irish law as you, so I could be wrong.
Of course this is not the case. You handing him the money is not a valid transaction, and you do not have an arm's length relationship from him in this case. It is as recoverable from him as it is from you.
Actually, in most states, you must know the goods are stolen to be guilty of being in possession of stolen goods. Also in most (perhaps all) states, you are not guilty of being in possesion of stolen goods if all you are in posession of is cash. Cash is not goods.
True that you will have to give it up. True that the police will give you no compensation for it. Depending on the circumstances you may be able to pursue compensation from the person who sold it to you. All totally irrelevant to the issue of whether dividend payments are recoverable from non-Director shareholders, since dividend payments are not sales of goods.
You have no right to the ATM money. In the case of Directors making improper dividend payments to you, you may well have a right to the money, in the same way that you have the right to keep a monetary gift. Since the Dividend is improper, the Directors are personally responsible for the money improperly taken from the company. If they are responsible for the money, it follows that you the shareholder are not. If the Directors are responsible for that money, it follows that the money they gave you is not the money taken from the company. Hence it is just a gift from the Directors to you, paid out of their personal assets, and you have no obligation to the company for it.
With all due respect, markksman, you clearly don't have enough knowlege of the applicable laws to be making a useful contribution on this matter. I'm not suggesting you need to have the knowledge of a judge. God knows I don't. I am sure I must be getting a few things wrong. Sometimes I think I should stop posting because, not being a lawyer, there is a chance I am leading people astray Then I remember this is NVG, and even lawyers make mistakes.
But nothing I have posted has the quantity of fail you just displayed. I have been exposed to the laws regarding Director liablity for three decades. I have received legal advice on the matter from highly qualified lawyers. When commenting on aspects of the law I am less sure about, I read first, post second. If you did just a fraction of this, you'd have far fewer errors and irrelevancies in your posts.
(I now await the post from some lawyer pointing out the 18 errors of law I just made in this post - karma's going to get me
I could quibble about some of the things you say regarding stolen goods (there are times when stolen goods are simply not recoverable from a purchaser, and other times when they are) but that is really not important to the FTP discussion as "goods" are not at issue - whatever else, "dividends" are certainly not "goods."
Yet the issue of lack of innocence by a receiver of dividends is a real one. The allegations against some or all the FTP shareholders go beyond the level of innocence needed to ensure the level of legal protection for shareholders you describe in your post.
An obvious example of this would be a shareholder who directly conspires with a director to issue dividends in clear violation of some applicable law. The fact of the conspiracy will trump the normal protection for that shareholder.
Skallagrim
10-22-2011
, 04:29 PM
Join Date: Feb 2008
Posts: 2,417
Anytime FTP received a deposit of money from a player, made in reliance on FTP's representations and inducements that such money would be held in a safe, secure and segregated account and readily available to the player, FTP had a fiduciary duty and responsibility to actually hold the money in accordance with its warranties, representations and inducements. Any failure to do so, that results in financial harm to such a player, makes FTP, its officers, partners and principals liable for foreseeable damages resulting from the breach in its fiduciary duty.
The law is not interested in labels; if you make promises to care for something that I give you possession of, which I would not have given you but for my reliance on those promises, then you must either keep your promise or be liable for the foreseeable damages from the breach of your promise. It's the essential and substantive problem FTP, its partners, officers and principals have regardless of what labels someone puts on any part of the transaction in order to cloud liability. Very few courts are going to be confused by those labels.
The law is not interested in labels; if you make promises to care for something that I give you possession of, which I would not have given you but for my reliance on those promises, then you must either keep your promise or be liable for the foreseeable damages from the breach of your promise. It's the essential and substantive problem FTP, its partners, officers and principals have regardless of what labels someone puts on any part of the transaction in order to cloud liability. Very few courts are going to be confused by those labels.
10-22-2011
, 04:35 PM
Quote:
Of course this is more difficult than with actual stolen goods and as I will later discuss, any clawback will obviously rely on being able to show that this was not just misallocation of compnay funds by the directors, but that indeed theft and fraud (even of a ponzi like nature as I argued elswhere) have indeed occured. ...
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<snip a bunch of stuff I don't undertand and some stuff that is not really relevant>
I think your example is a bit missleading given the actual case at hand, but I would certianly conced that it would be unreasonable to force UNKNOWING shareholers to sell off all their assets in order to compensate you. That does not mean that you don't have a claim on any of their assets. Supposed that insetad they only bough $50 worth of champaign, you'd have a very reaonable expectation to get back the remaining $50 (despite your argument to the contrary below), and may also be entitled to confiscate any champaign bottles that were not consumed.
I think your example is a bit missleading given the actual case at hand, but I would certianly conced that it would be unreasonable to force UNKNOWING shareholers to sell off all their assets in order to compensate you. That does not mean that you don't have a claim on any of their assets. Supposed that insetad they only bough $50 worth of champaign, you'd have a very reaonable expectation to get back the remaining $50 (despite your argument to the contrary below), and may also be entitled to confiscate any champaign bottles that were not consumed.
Mostly I was citing the defence of changed circumstances as an example of one of the principles that probably underlies the protection shareholders are offered by the law.
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As I argue furether below, I think that is an incoreect conclusion. As you earlier argued money is somehwhat fungible so it is not a logical conclusion to say that if I steal $10 from the cashier at an arcade and immediately run over to the chance machine and convert it to quarters that I can simply stay in the arcade and play video games because I am clearly not in the possesion of any stolen money.
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Your strongest claim (and this is based on the non fungibility of money) is that if your friend managed to play out all his quarters and still has a $10 bill in his pocket, that doesn't mean that the money can be taken from him. But I don't think this is a clear cut case either. You can still argue that he received unjust rewards and as such should compensate the person that was clearly wronged. While he would be foreced to give back all the $ if he knew what you did (I think we all agree on this as it would make him a party to the crime), it does not necessarely follow that he has no obligation for repyamnet.
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More importantly, a more accurate analogy would be that he placed in a couple fo quarters before the owner came asking for the money, and as such he would be required to give back the remainder of funds in his possesion. Again, if he also still had a $10 bill in his psossesion would he be required to return that rather than the quarters is a question I don't know the correct answer to either moraly or legaly.
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Obviously the directors are first in line, but that does not meant that everyone else is totaly immune even if corporate laws have tried to shild owners from any liability. Even in this examle, if the only thing done with your money was to purchase lobsters, it may not be resonable to expect to recive compensation from the seller that would result in damages to them, but it may not be unreasonable to go after some of the profits that he made after all the expenses in providing said lobsters have been accounted for.
And again, if said profit has already been used to say buy more lobster traps, then it further comlicates matters. Same with employees and other affiliates.
And again, if said profit has already been used to say buy more lobster traps, then it further comlicates matters. Same with employees and other affiliates.
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I think you can leagaly try a clawback in this instance, but it is unnecessarly complicated when the majority of the funds in question can be found with shareholders. No one is expecting that they have an obligation to return all dividends, but even with the fungable nature of money, I think a strong case can be made that they are in the possesion of stolen property, and should be required to return what they belived to be legitimate profits as in the BM case.
I appreciate your comments.
10-22-2011
, 04:35 PM
centurion
Join Date: Sep 2011
Posts: 130
Quote:
You are generally correct that one cannot keep stolen property. Property and money are not the same thing.
I am not sure of this, but AFAIK, stolen money which was obtained through a valid transaction which has been concluded is not returnable. If I am wrong, please cite.
Furthermore, it is unlikely that the money shareholders received can be considered stolen money. IF there was stolen money, legally the Directors have it.
I am not sure of this, but AFAIK, stolen money which was obtained through a valid transaction which has been concluded is not returnable. If I am wrong, please cite.
Furthermore, it is unlikely that the money shareholders received can be considered stolen money. IF there was stolen money, legally the Directors have it.
Do we have a link to any criminal charges?
10-22-2011
, 04:49 PM
What difference will it make if FTP is a privately owned LLC with twenty fiveish investors rather than a huge publicly held corporation with tens of thousands of shareholders???
Also, most of FTP owners were directly responsible for the marketing of that company. Ivey, Seidel, Cunningham, Harmon etc... They can't claim total lack of involvement in the success or failure of FTP. Whether or not that will be enough to force any return of distribution payments remains to be seen but I certainly think it's plausible.
Also, most of FTP owners were directly responsible for the marketing of that company. Ivey, Seidel, Cunningham, Harmon etc... They can't claim total lack of involvement in the success or failure of FTP. Whether or not that will be enough to force any return of distribution payments remains to be seen but I certainly think it's plausible.
10-22-2011
, 04:56 PM
TY to DoTheMath and Skallagrim.
I never understood the endgame for suing shareholders who received dividends. There is just no way we could ever recover enough to make a dent into the total amount owed. It never seemed feasible to me. Filing lawsuits is one thing, but we also have to win them. And the analysis provided by DTM and Skallagrim make me extremely pessimistic that if players were to ever attempt this, that it would be a bleak proposition from the onset.
demet and markksman have been parading this message for a long time, and it's good to know that we can put this argument to rest.
I never understood the endgame for suing shareholders who received dividends. There is just no way we could ever recover enough to make a dent into the total amount owed. It never seemed feasible to me. Filing lawsuits is one thing, but we also have to win them. And the analysis provided by DTM and Skallagrim make me extremely pessimistic that if players were to ever attempt this, that it would be a bleak proposition from the onset.
demet and markksman have been parading this message for a long time, and it's good to know that we can put this argument to rest.
10-22-2011
, 04:58 PM
Thanks for the helpful input Skallagrim.
Are you certain of this? I was under the impression that the Directors were liable regardless of whether they particpated in or concurred in the decision. Under what circumstances would a Director not be liable for an improper dividend payment? Where he has been deliberately misled?
Oh dear! Did I say that? That's not quite correct, is it? I should probably have said something like "The DoJ has not unsealed any allegations that the shareholders had any reason to believe they were not entitled to the dividend payment." Obviously I cannot know that the shareholders knew nothing.
I take it this is because their guilty knowledge means they didn't receive the payment in good faith.
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But many others have alleged that at least some shareholders knew precisely that the dividends were being paid at least improperly, maybe even knew they were being paid unlawfully - if this is proven to be true the law may well indeed force them to repay those dividends.
10-22-2011
, 06:52 PM
Join Date: Dec 2007
Posts: 434
I am tempted to go for the simple and pragmatic one
edit: obviously no offense to skallagrim and dothemath, their analysis is very interesting.
Last edited by pokouz; 10-22-2011 at 07:05 PM.
Reason: adding an answer
10-22-2011
, 07:06 PM
Join Date: Oct 2009
Posts: 446
Quote:
To be clear, when I say "player funds", I mean funds of which the player is the legal owner.
Generally, when you give money to someone, ownership of the money passes with posession.
If I lend you ten dollars, and you have $10 in your wallet, that ten dollars belongs to you, not me. If you take it out of your wallet and put it on the table in front of you, I am not allowed to take it. If I did, it would be theft. You owe me ten dollars, but the ten dollars you have is yours.
Generally, when you give money to someone, ownership of the money passes with posession.
If I lend you ten dollars, and you have $10 in your wallet, that ten dollars belongs to you, not me. If you take it out of your wallet and put it on the table in front of you, I am not allowed to take it. If I did, it would be theft. You owe me ten dollars, but the ten dollars you have is yours.
Of course there is a distinction between money, goods, and property, but it can be argued that in our times money is the most important of possesions (as the means through which to aquire goods and property), and thereby anyone in posesion of your funds is just as (if not more) resposnibe in restoring them to the righful owner. Now grated, as you have argued, there are some dificulties in establishing the nature of the funds, but as I am arguing, I think that can be done in this case, and shown that they were gotten through a ponzi like fradulent manner that leave them valunerable to clawback.
Supposed insted I lent you my car for the weekend, if you fail to return it and I drop by your house next week and use my spare keys to take it back you can hardly acuse me of theft. Again, timing and the exact terms of the deal in question matter and in either case I would be better going to the authorities than trying to take back my property myself, but if I did do so it is hard to see in the examples above how I would be found in vilolation of the law. MOST importantly I would argue you did not (knowingly) lend the money to FTP.
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For money in your possession to not belong to you one of a few specific things has to have happened. One is the establishment of a trust. It is quite clear that no trust was formally established for player funds. There is a possibility a court might decide that there is a constructive trust. This would happen if the court decided that FTP obtained the player money through fraudulent means. Since no court has yet made such a decision, no trust exists.
I think it is unlikely a court would rule there is a constructive trust for most of the player money. It would be hard to prove that most deposits were originally obtained fraudulently. There is plenty of evidence that players deposited money on FTP for the purpose of playing online poker and that FTP provided the online poker. Some might try to make a case that FTP misled players regarding the security and availability of their funds. A few people who deposited shortly before BF might win such an argument. However the promises that matter will be the ones in the Terms and Conditions, and most of the time those didn't claim a degree of fund security that clearly wasn't intended to be provided.
I think it is unlikely a court would rule there is a constructive trust for most of the player money. It would be hard to prove that most deposits were originally obtained fraudulently. There is plenty of evidence that players deposited money on FTP for the purpose of playing online poker and that FTP provided the online poker. Some might try to make a case that FTP misled players regarding the security and availability of their funds. A few people who deposited shortly before BF might win such an argument. However the promises that matter will be the ones in the Terms and Conditions, and most of the time those didn't claim a degree of fund security that clearly wasn't intended to be provided.
Now we turn to the TOS. While they do not explicitly state a degree of security for the funds, you have every right to expect that at the very minimum the most lax requirments of the regulator had to be met, and they were not. Furthermore, the regulator alos required the licensee to state clearly if they did not hold funds in separate and sequre accounts. The fact that funds were comingled was not stated anywhere priore to BF (actualy late May I belive), which would lead players to beive that funds were safe and sequre, and also a violation of the company license. So far from protecting them, what you say is apsent from the TOS is actually another clear indication that they were commiting fraud.
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Another possibiity is that a bailor/bailee relationship is established. In this case the bailor gives the money to the bailee so the bailee, acting as agent for the bailor, uses the money on behalf of the bailor for a specified purpose. There is nothing that I have seen to indicate that a bailor/bailee relationship is established between players and FTP.
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I think the most likely legal interpretation is that when players deposited money, FTP became the owner of the money and FTP acquired a corresponding debt to the players. This is totally consistent with everything I have read that has been put out by the DoJ wrt to the case.
They were required to have an amount of cash on hand greater than the total amount of money owed to players. It does not follow from this that, if they complied, the cash they had on hand actually belonged to the players. It was money that belonged to FTP, in an amount equal to or greater than the amount of their debt to players.
FTP can't simultaneously have a debt to players and be holding money that belongs to players. That would be double counting. It is quite clear that both the DoJ and the AGCC considered FTP to have a debt to players.
They were required to have an amount of cash on hand greater than the total amount of money owed to players. It does not follow from this that, if they complied, the cash they had on hand actually belonged to the players. It was money that belonged to FTP, in an amount equal to or greater than the amount of their debt to players.
FTP can't simultaneously have a debt to players and be holding money that belongs to players. That would be double counting. It is quite clear that both the DoJ and the AGCC considered FTP to have a debt to players.
[QUOTE=DoTheMath;29412786]The question is: does its quasi-Ponzi status establish a condition under which players would be allowed to recover improperly-paid dividends (or even properly paid dividends) from non-Director owners? I doubt it, but this is an area of developing law, so who knows?
And I am making the case as to why what they did actually leave them exposedd to some of the commonly understod reason and methods involved in a clawback operation even from unknowing individuals. But I agree, I there is no way of knowing which way the courts will go, and I I were to bet I would guess they would side corporate interests as is typically the case.
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Is that what they said in the amended complaint and acompanying memo? I don't think so. I think they may have said FTP "defrauded players" and conducted a "fraudulent scheme" that "misused players' funds". Is the distinction important? Depends on how you want to use the terms. If it encourages people to create irrelevant hypothicals about FTP robbing banks, I don't think it is helpful to use imprecise terms.
I think it is instructive that in the amended complsint, the DoJ goes after dividend payments to Directors, but doesn't go after divdend payments to non-Directors, despite claiming that all such dividend payments were a misuse of player's funds.
I think it is instructive that in the amended complsint, the DoJ goes after dividend payments to Directors, but doesn't go after divdend payments to non-Directors, despite claiming that all such dividend payments were a misuse of player's funds.
I still think that at this point my use of stolen funds is much more approriate than that of a loan gone bad. And again, if you owe bank A for a loan and you rob bank B to pay it back, bank B has a much stronger claim on the funds than bank A even though it also has a legal claim to said funds.
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One is clearly theft, the other might be fraud. I have no idea what happens to stolen funds paid out as dividends. On the surface I still think the Directors are responsible for it. If the funds were obtained fraudulently, then there is a chance that there is a constructive trust, so taking the funds out of the trust may also be theft. If we get to the point that there is sufficient evidence that the funds were obtained fraudulently, and criminal charges to that effect are laid and a conviction obtained, then perhaps we will have reached the same threshold that allowed recovery from "winners" in the BM ponzi. We are nowhere near that yet.
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I don't think that it is correct that all transactions conducted with improperly-obtained funds are themselves illegal and reversible. See the cheeseburger analogy above.
I don't think it is just corporate law, but also a matter of what constitutes a valid transaction.
I don't think it is just corporate law, but also a matter of what constitutes a valid transaction.
10-22-2011
, 07:18 PM
Join Date: Aug 2011
Posts: 801
Quote:
YVW.
Is it common sense or desperate hope?
I don't know that the payments cannot be recovered from the shareholeders. I am just unaware of any legal mechanism that would accomplsh this. Perhaps one exists.
What common sense tells me is that if the Directors are personally wholly responsible for the dividends improperly paid out (and I believe that they are), then the shareholders are not responsible for them.
Is it common sense or desperate hope?
I don't know that the payments cannot be recovered from the shareholeders. I am just unaware of any legal mechanism that would accomplsh this. Perhaps one exists.
What common sense tells me is that if the Directors are personally wholly responsible for the dividends improperly paid out (and I believe that they are), then the shareholders are not responsible for them.
I hate reading your well laid out arguments as it makes complete sense that it is the directors who stole the player funds and then passed it on to shareholders.
I just pray that there is a legal mechanism somewhere that you have overlooked or missed for getting that dividend money back which imo the shareholders should give back voluntarily anyway as its simply the right thing for them to do.
It just doesnt feel or seem right that knowing where that money came from it cannot be reclaimed at least in part.
10-22-2011
, 07:42 PM
Join Date: Aug 2011
Posts: 801
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TY to DoTheMath and Skallagrim.
I never understood the endgame for suing shareholders who received dividends. There is just no way we could ever recover enough to make a dent into the total amount owed. It never seemed feasible to me. Filing lawsuits is one thing, but we also have to win them. And the analysis provided by DTM and Skallagrim make me extremely pessimistic that if players were to ever attempt this, that it would be a bleak proposition from the onset.
demet and markksman have been parading this message for a long time, and it's good to know that we can put this argument to rest.
I never understood the endgame for suing shareholders who received dividends. There is just no way we could ever recover enough to make a dent into the total amount owed. It never seemed feasible to me. Filing lawsuits is one thing, but we also have to win them. And the analysis provided by DTM and Skallagrim make me extremely pessimistic that if players were to ever attempt this, that it would be a bleak proposition from the onset.
demet and markksman have been parading this message for a long time, and it's good to know that we can put this argument to rest.
However I have to disagree with aggo's final sentence as this argument/discussion is a long way from being put to rest.
Its not for me to speak for DTM or S on this subject but my interpretation of this debate is that whether or not dividends will or can get clawed back from the shareholders depends on a number of factors and as such it is too soon to say that dividends will definitely be or not be clawed back.
I have seen neither of these knowledgeable posters state categorically that no dividends will get clawed back just that the conditions under which those dividends were paid will ultimately dictate whether some of them can be clawed back. (please feel free to correct me if I am wrong) Basically they have shown that there is a complex legal argument to be had before a concluded view is made on whether those dividend payments are recoverable.
They have merely outlined the legal environment as to why dividends may or may not be reclaimable.
Before a definitive answer to this can be reached we need to define how and why the dividends were paid and whether or not any of the shareholders had any knowledge of what was going on and a load of other things too.
I find it embarrassing that such a dumb and irrelevant comment can be made on whats probably been the most informative sub plot in this thread to date.
PS I still believe/desperately hope that there's a legal way to claim dividend payments back
Last edited by Hdemet; 10-22-2011 at 08:01 PM.
10-22-2011
, 07:53 PM
Join Date: Aug 2011
Posts: 25
Quote:
It is not true to blankly state that you have no right to property that you obtain that is later found to be stolen. The law in pretty much every western country has a doctrine know as "the bone fide purchaser for value." Bone fide simply means, in this context, "in good faith." To put it plainly, if you steal a car and then sell it to me at a fair price under circumstances where I have no idea the car is stolen, the law will not make me return the car to the rightful owner - the rightful owner's only remedy under those circumstances is to get redress from the thief (there are exceptions not really important to this discussion).
Details matter here, if you give me the stolen car I am not a purchaser. If you sell it to me for an amount far less than its actual value, I may no longer be operating in good faith. And, obviously, if I know you stole it even if I purchase it for more than market value I am no longer protected and must return the car.
Details matter here, if you give me the stolen car I am not a purchaser. If you sell it to me for an amount far less than its actual value, I may no longer be operating in good faith. And, obviously, if I know you stole it even if I purchase it for more than market value I am no longer protected and must return the car.
http://www.msnbc.msn.com/id/44996012.../#.TqNWXjDlaZ4
It's not clear how many buyers there have been. What is clear is that buyers' good faith is not a defense against the rightful owner's legal claim. One of the buyers even added $10,000 upgrades. One can hardly argue for a better case of good faith.
In terms of fungibility, it doesn't affect legal claims. It only affects forms of remedy. For example, if you steal a $100 bill, the victim can recover from you. It doesn't matter that you spend the original bill. Fungibility doesn't affect legal claim. Fungibility means that the court views $100 in your bank account equivalent as the $100 you stole. Neither can the victim insist on having the original bill back. The exception is if the bill is unique in itself.
Last edited by XXpokerZZ; 10-22-2011 at 08:12 PM.
10-22-2011
, 08:07 PM
Pretty sure there's a precedent in English Law for shareholder dividends that were unlawfully paid to be clawed back, I'll try to find it tomorrow. Whether the dividends were actually unlawfully paid is another question entirely, I'm no business law expert.
edit: meh it seems skallagrim has already pointed this out.
edit: meh it seems skallagrim has already pointed this out.
10-22-2011
, 08:10 PM
Join Date: Oct 2009
Posts: 446
Quote:
If a claim for unjust enrichment applied, I would agree that unspent money and probably unconsumed goods bought with the unjust enrichment could be recovered. However, I went on in my previous post to show why I don't think that a claim of unjust enrichment is applicable: the players had no interaction with the owners.
Quote:
My analogy stipulated no opporunity to change money. The point was not material to my argument because I hold that you are not liable to B no matter what order the events occurred in. What protects you from liability is the nature of the transaction in which you received the cash from A. If it is a bona fide arms-length transaction then you are protected. I will now admit to some doubt that a gift to you immediately subsequent to a robbery will necessarily be regarded as a bona fide arms-length transaction, but I think my construction of the analogy contains an implied stipulation that it actually is one.
That fact that you are handing the money to a friend makes it less likely that the transaction will be seen to be arms length.
That fact that you are handing the money to a friend makes it less likely that the transaction will be seen to be arms length.
Also if you have doubts about reciving money right after the theft, then I woudl suggest that in this case the theft was constantly ongoing on a small scale, precisely so that they could try and use the defense you seem to suggest, namely that it cannot be said with certainty that the money paid out to shareholders in fact belongs to players. Now that may succeed in shielding them, or it may actually open them up to the ponzi like charges that make a clawback more plausible. I am of course arguing for the latter.
Quote:
I'm not very comfortable persuing a discussion of what a friend might have to do when he is gven the proceeds of a robbery because that is different in three ways from the example I gave. In my example the donation was arm's length, was not done for the purpose of disposing of the proceeds of a robbery and was not stipulated to be from the actual proceeds of a robbery. My point was that a money transfer from A to you when A has an obligation to B due to having unjustly deprived B of some money does not give B a claim against you, if the transfer from A to you is bona fide.
If you give a friend proceeds of a robbery, he'll have to give it back, and may even be punished. My example was significantly different.
If you give a friend proceeds of a robbery, he'll have to give it back, and may even be punished. My example was significantly different.

Thanks, but sadly while we're having a civilized discusion, this is not a debate I really want to risk getting into on these forums. That's why while I have monitored these threads relativley closely I have largely refrained from making too many comments and will probably go back to that approach.
10-22-2011
, 08:31 PM
Join Date: Oct 2009
Posts: 446
Quote:
I hate reading your well laid out arguments as it makes complete sense that it is the directors who stole the player funds and then passed it on to shareholders.
I just pray that there is a legal mechanism somewhere that you have overlooked or missed for getting that dividend money back which imo the shareholders should give back voluntarily anyway as its simply the right thing for them to do.
I just pray that there is a legal mechanism somewhere that you have overlooked or missed for getting that dividend money back which imo the shareholders should give back voluntarily anyway as its simply the right thing for them to do.
The argument I have been trying to make is that the only lawful dividends can be from company profits. Any other source, whether operational funds or player deposits which actually makes this a relatively unique case (and I belive a stronger candidate for clawback), are necessarely unlawfuly paid by the directors. The debat seems to be in which case the actual owners can be made to pay (notice I did not say punished) for the crimes of their CEO.
10-22-2011
, 08:45 PM
10-22-2011
, 08:53 PM
Quote:
What difference will it make if FTP is a privately owned LLC with twenty fiveish investors rather than a huge publicly held corporation with tens of thousands of shareholders???
Also, most of FTP owners were directly responsible for the marketing of that company. Ivey, Seidel, Cunningham, Harmon etc... They can't claim total lack of involvement in the success or failure of FTP. Whether or not that will be enough to force any return of distribution payments remains to be seen but I certainly think it's plausible.
Also, most of FTP owners were directly responsible for the marketing of that company. Ivey, Seidel, Cunningham, Harmon etc... They can't claim total lack of involvement in the success or failure of FTP. Whether or not that will be enough to force any return of distribution payments remains to be seen but I certainly think it's plausible.
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