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Old 06-02-2012, 03:22 PM   #76
DeepFryer
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Re: Purple Lounge to be Liquidated, Parent Company Washes Hands of Responsibility to Pay Player

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Originally Posted by xPeru View Post
I share your anger flash:

When you deposit money on a poker site, the legal ownership of the money passes to the site. You become a creditor: the site has a contractual obligation to repay you on demand (subject to the withdrawal provisions in the site's terms and conditions).

Legally, your money just goes into a big pot containing all the funds which belong to the company, and the company has the legal right to use that money in any way it likes subject to it contractual obligations and any restrictions placed on it by the law and its memorandum and articles of association.

A company is a legal entity - think of it as being legally a person. A limited liability company is a legal entity which is liable for its own debts, The shareholders cannot be pursued by creditors unless some crime has been committed. Shareholders in BP or General Motors can't be asked to pay up for any debts that these companies run up.

Similarly, a parent company is technically just a shareholder, in this case a 100% shareholder, and it benefits from the same limited liability protections as any shareholder in any company.

There is a body of law which exists to prevent subsidiaries being created specifically to deceive or take advantage of the limited liability protection, but PL doesn't appear to satisfy any of the conditions which would make MDC liable. It had employees, it had separate directors, it's headed notepaper was completely different (yes, this is a matter that has been used in the past in court as evidence!) and it received money from MDC rather than giving money to MDC.

I think I'm right in saying that MDC will rank equally with playersas it attempts to recover its 900k loan to PL. YES!! Players will probably get less because whatever money is left will also go to MDC.

I'm still working on how big a stink we can kick up about this - I'm receptive to all ideas.
I'm no expert, but the bolded part above seems hard to believe after looking at the numbers.

Here is Media Corp's last annual statement.

Purple Lounge accounted for over 78% of Media Corp's total revenues for fiscal year 2011 (27,630,000 out of 35,145,000). So they are a lot more than just some minor subsidiary.

And they were quick to highlight how well Purple Lounge was doing (29% revenue growth)... with seemingly no concern over the loss on the bottom line.

Now they are pointing to the 900k loan, which seems like a fairly minor amount of money compared to Purple Lounge's annual revenues.

In their most recent financial statement, Purple Lounge accounted for 91% of Media Corp's revenues! Media Corp is practically a shell company at this point. In this statement, they are quick to blame Purple Lounge for their losses, although it seems clear that their other business sectors were performing much worse.

The gaming business grew their revenues by over 50% compared to the prior year.

Their next-largest business unit (advertising) saw their revenues fall by more than 50% over that same period (March 2011 - March 2012).

In a nutshell: they wanted all the benefits of the gaming business, without assuming any of the risks or liabilities associated with it.

And now, despite having a cash balance of only 0.52 million, Media Corp is buying another gaming company (Intabet) for 1.53m million worth of stock?!

It's all pretty audacious. I don't see why the courts would allow them to keep doing this.
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Old 06-03-2012, 07:43 AM   #77
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Re: Purple Lounge to be Liquidated, Parent Company Washes Hands of Responsibility to Pay Player

On the 2011 accounts you can see the liabilities of 2,527,000, most of which will be the player balances.

It's starting to look like PL have lost an enormous amount:

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Old 06-03-2012, 12:14 PM   #78
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Re: Purple Lounge to be Liquidated, Parent Company Washes Hands of Responsibility to Pay Player

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Originally Posted by NCSU07 View Post
Fwiw smaller cashouts were working until the end. I took out my last 2k just a few weeks before they shut down. Call me lucky I guess.
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Originally Posted by acehole60 View Post
My $7.7k cash out was pending for several months fwiw.
Very Standard actions before a scam, busto, pnozi, whatever u wanna call it, pulls the plug.

See: Eurolinx poker. They pay a bunch of little wds here and there up to the end so people post on the boards they are getting paid.

this buys the sites in Q a bit more time for a relatively low $ fee.
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Old 06-03-2012, 12:45 PM   #79
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Re: Purple Lounge to be Liquidated, Parent Company Washes Hands of Responsibility to Pay Player

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To be fair online poker players are by far the easiest group of people to scam and rob. The 85 and up seniors community laughs at online poker.
lol'd
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Old 06-03-2012, 02:21 PM   #80
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Re: Purple Lounge to be Liquidated, Parent Company Washes Hands of Responsibility to Pay Player

Please PM me if there is anything I can do to help the players get their money back, didn't have time to read the whole thread.

Sincerely hope you guys get paid, this is beyond a joke
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Old 06-03-2012, 04:16 PM   #81
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Re: Purple Lounge to be Liquidated, Parent Company Washes Hands of Responsibility to Pay Player

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Originally Posted by starvingwriter82 View Post
It's just a sad state of the industry that your money is only safe until someone else needs it, then it's gone.
That's not much of an "industry" then is it? Probably closer to scams from Nigeria
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Old 06-03-2012, 07:09 PM   #82
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Re: Purple Lounge to be Liquidated, Parent Company Washes Hands of Responsibility to Pay Player

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Originally Posted by PurpleStink View Post
On the 2011 accounts you can see the liabilities of 2,527,000, most of which will be the player balances.

It's starting to look like PL have lost an enormous amount:

I wouldn't say PL lost an enormous amount. According to their books, PL was mildly unprofitable... they lost 283k in 2011, which was ~10% of Media Corp's total loss for the year. Nothing will be known for sure though, until the records are opened so that a judge can look at all bonuses & salaries paid out by PL, plus whether or not any money was ever transferred from PL to Media Corp.

Chris Gorman seems to be a key figure. He was the founder of Purple Lounge, who then became a board member of Media Corp after they purchased PL in 2009. He resigned on April 24, 2012 (this is right after PL went offline & lost their gaming license from IGA). It's important to note that after the acquisition, he was a board member for both companies PL and MC at the same time, from 2009-2012... which is of course a blatent conflict of interest.

This also happened earlier this year (ha!).

It seems as though Mr Gorman's previous businesses do not have such a great track record, which makes me question the sincerity of his optimism when PL was acquired back in 2009. For example:

1 The Gadget Shop Limited was placed into administration on 14 March 2005 and subsequently into creditors' voluntary liquidation on 9 March 2006.
2 Farm Studios Limited was placed into compulsory liquidation on 12 February 2002 and on18 April 2006, the company was ordered to be dissolved.
3 SCI Investments Limited was placed in to creditors' voluntary liquidation on 12 July 2001 and later dissolved on 13 December 2004.
4 Administrative receivers were appointed to The New Gadget Shop Limited on 18 March 2005, which was later dissolved on 24 April 2007.
5 Mr Gorman resigned from VS3 Productions Limited on 1 March 2008, which was subsequently placed into compulsory liquidation following an oder made on 16 July 2008.
In addition, Mr Gorman was a director of Toyzone.co.uk Limited, which resolved to wind up and to appoint liquidators on 6 April 2001. The company was dissolved on 21 February 2002.

His story goes on and on:

For Gorman, the thrill of building a business is greater than running an established company and this, along with scepticism that is a legacy of the Gadget Shop experience, explains his tendency to exit ventures once they reach a certain point.

More dirt here.

His director summary.

Here is the statement following MC's acquisition of Intabet. Gorman left, and for some reason Justin Drummond and Sara Vincent also resigned. So they appointed the guys from Intabet as MC's new chairman of the board and CEO (are you kidding me?!). Again, from this decision we can see that Media Corp is basically just a shell company.

You can find their annual reports here. All of their non-gaming businesses (ie: advertising and publishing) have basically shriveled up and died over the past few years, so they have transformed themselves into a company that steals money from poker players.

Media Corp also tried to buy GMG before buying Intabet.

There is some decent advice here.
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Old 06-03-2012, 08:01 PM   #83
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Re: Purple Lounge to be Liquidated, Parent Company Washes Hands of Responsibility to Pay Player

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Originally Posted by Joee View Post
File it.


A representation of present fact, not of future intent collateral to, but which was the inducement for the contract, was neither duplicative of a cause of action for breach of contract, (See, Sager v Friedman 270 N.Y. 472, 479) nor barred merger (See, Danann Realty Corp. v Harris 5 N.Y.2d 317; See, Citibank v Plapinger 66 N.Y.2d 90, 94).

In following with this established law, the Court must consider the assurances of segregated funds and guarantees made by Purple Lounge of returning held player funds upon request, including _______ LLC, parent company of Purple Lounge, completely independent of the contract that was eventually breached. The breach of contract, then, is to be scrutinized by the Court seperately, and in addition to the claims of promissory estoppel, fraudelent inducement, fraud, and negligent misrepresentation. "


**NOT legal advice. By visiting twoplustwo.com you hereby release from any fault, liability, etc to any actions you take after reading comments posted, for entertainment purposes only -- by me. Consult an attorney.
probably already pointed out, but what does US case law have to do with a UK company?
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Old 06-03-2012, 08:48 PM   #84
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Re: Purple Lounge to be Liquidated, Parent Company Washes Hands of Responsibility to Pay Player



http://www.telegraph.co.uk/news/worl...n-Florida.html
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Old 06-03-2012, 11:09 PM   #85
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Re: Purple Lounge to be Liquidated, Parent Company Washes Hands of Responsibility to Pay Player

Maybe I've had too many beers or something, but I'm not seeing the "edit post" button.

Anyway, in my last post where it says "His story goes on and on", that link should go to here.
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Old 06-04-2012, 03:24 AM   #86
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Re: Purple Lounge to be Liquidated, Parent Company Washes Hands of Responsibility to Pay Player

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Originally Posted by DeepFryer View Post

There is some decent advice here.
Imagine how much I love it when someone copies and pastes an article I've written and publishes it for profit on another website.

The original link is: http://pokerfuse.com/features/commen...mands-answers/
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Old 06-04-2012, 04:02 AM   #87
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Re: Purple Lounge to be Liquidated, Parent Company Washes Hands of Responsibility to Pay Player

Would it be appropriate to inform the Serious Fraud Office about this? I have no idea how legal system works in the UK...
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Old 06-04-2012, 07:04 AM   #88
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Re: Purple Lounge to be Liquidated, Parent Company Washes Hands of Responsibility to Pay Player

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Would it be appropriate to inform the Serious Fraud Office about this? I have no idea how legal system works in the UK...
I don't think there is any evidence that there has been a fraud. As far as I am aware, PL is simply a poorly run company with a lot of debt that has been forced to close. Based on the posts on this thread, MediaCorp has lost substantial money because of the situation. I think you would have to demonstrate some kind of evidence that PL was set up with the intention of defrauding players, but it does not seem that way to me.
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Old 06-04-2012, 08:51 AM   #89
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Re: Purple Lounge to be Liquidated, Parent Company Washes Hands of Responsibility to Pay Player

wow, didnt expect this, truly sucks... this is probably a stupid question and impossible to check, but is there any way to figure out if one had a balance there? used to play a lot there back in the MG days and I might have had a 3 fig balance still sitting there.

guess there's only laddies left to trust in all of poker online.
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Old 06-04-2012, 10:16 AM   #90
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Re: Purple Lounge to be Liquidated, Parent Company Washes Hands of Responsibility to Pay Player

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Originally Posted by WAtR View Post
I don't think there is any evidence that there has been a fraud. As far as I am aware, PL is simply a poorly run company with a lot of debt that has been forced to close. Based on the posts on this thread, MediaCorp has lost substantial money because of the situation. I think you would have to demonstrate some kind of evidence that PL was set up with the intention of defrauding players, but it does not seem that way to me.
The evidence is the fact that the players money is gone! Player's money is supposed to be segregated. They should be paying operating costs and salaries out of profits. Otherwise it's just a ponzi scheme.
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Old 06-04-2012, 11:10 AM   #91
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Re: Purple Lounge to be Liquidated, Parent Company Washes Hands of Responsibility to Pay Player

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The evidence is the fact that the players money is gone! Player's money is supposed to be segregated. They should be paying operating costs and salaries out of profits. Otherwise it's just a ponzi scheme.
I believe there is no legal obligation to segregate the players' funds from operational funds. Also, being really **** at running a business is not illegal. It is possible that illegal things were done but nobody in this thread appears to have any evidence of this.
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Old 06-04-2012, 12:58 PM   #92
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Re: Purple Lounge to be Liquidated, Parent Company Washes Hands of Responsibility to Pay Player

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Originally Posted by ValarMorghulis View Post
Player's money is supposed to be segregated. They should be paying operating costs and salaries out of profits
Yeah that would be nice, but isn't Stars the only site that actually does this? Without looking it up, I would be surprised if 888 and Party had funds 100% segregated.
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Old 06-04-2012, 01:30 PM   #93
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Re: Purple Lounge to be Liquidated, Parent Company Washes Hands of Responsibility to Pay Player

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Originally Posted by starvingwriter82 View Post
Here's what I wonder:

Has there ever been a site that's realized it was insolvent and neeeded to close down, and actually paid out its players beforehand?
Fleet Street Games.

(I don't know if it was insolvent, but it certainly wasn't very well off financially)

Last edited by Josem; 06-04-2012 at 01:37 PM.
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Old 06-04-2012, 02:06 PM   #94
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Re: Purple Lounge to be Liquidated, Parent Company Washes Hands of Responsibility to Pay Player

Insolvent means specifically that you cannot pay back players to any significant degree. A large poker site with exactly 100% of player funds on hand has plenty of money to keep the business rolling.

Its probably safe to say that most operational poker sites have no where close to this amount laying around.

Last edited by NCSU07; 06-04-2012 at 02:14 PM.
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Old 06-04-2012, 03:16 PM   #95
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Re: Purple Lounge to be Liquidated, Parent Company Washes Hands of Responsibility to Pay Player

I think all poker sites should have enough money to pay all players lying around. Maybe they can't lay hands on it all immediately, but it should be available. If not, then what the hell have they done with the players money. If they start using it for operating costs, then how will they ever be able to pay back all the players? A poker business only makes sense where it can pay costs with profits. If it needs to start using players funds then it very quickly turns into a Ponzi scheme. (Where they need further player funds to pay out previous players and operating costs.)

If they are operating a Ponzi scheme, then that is fraud. Seems pretty clearcut to me.

Edit: And that's what the DOJ said FullTilt had become. I don't see why other sites which may have even a bigger hole than Tilt (go broke without having funds frozen) are not Ponzi schemes
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Old 06-04-2012, 03:24 PM   #96
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Re: Purple Lounge to be Liquidated, Parent Company Washes Hands of Responsibility to Pay Player

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Originally Posted by WAtR View Post
I believe there is no legal obligation to segregate the players' funds from operational funds. Also, being really **** at running a business is not illegal. It is possible that illegal things were done but nobody in this thread appears to have any evidence of this.
No one has explained to me yet how they can claim they are following the regulations of the malta regulating body (which require funds to be segregated) while in fact blowing all the money on operating costs/big salaries for execs is anything but fraud. I am so confused here.

Thats more than just running a bad business thats lying to your customer base in order to receive deposits. Remember moneybookers ect. would not have made deposits for them if they hadn't been regulated.

I've read this whole thread and all the articles but I still don't see how its not fraud. They lied to customers. Plain and simple.
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Old 06-04-2012, 03:47 PM   #97
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No one has explained to me yet how they can claim they are following the regulations of the malta regulating body (which require funds to be segregated) while in fact blowing all the money on operating costs/big salaries for execs is anything but fraud. I am so confused here.

Thats more than just running a bad business thats lying to your customer base in order to receive deposits. Remember moneybookers ect. would not have made deposits for them if they hadn't been regulated.

I've read this whole thread and all the articles but I still don't see how its not fraud. They lied to customers. Plain and simple.
Well they weren't following Malta's rules, but Malta couldn't give a **** and they have no teeth to enforce anything anyway.
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Old 06-04-2012, 05:01 PM   #98
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Re: Purple Lounge to be Liquidated, Parent Company Washes Hands of Responsibility to Pay Player

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Well they weren't following Malta's rules, but Malta couldn't give a **** and they have no teeth to enforce anything anyway.
I understand but we made deposits under the LIE that they were following Maltas rules. Thats what I'm saying is fraud.
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Old 06-04-2012, 05:54 PM   #99
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I understand but we made deposits under the LIE that they were following Maltas rules. Thats what I'm saying is fraud.
But from a legal point of view the fact that they were regulated by Malta means nothing. There's no legal requirement to be regulated and no legal obligation to follow those rules.
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Old 06-04-2012, 07:57 PM   #100
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Re: Purple Lounge to be Liquidated, Parent Company Washes Hands of Responsibility to Pay Player

But if they represented to the players that their money was going to be held in accordance with those regulations but in fact was not, that seems like pretty clear false representation to me and would likely fall under general fraud statutes, even if Malta's regulations don't have criminal penalties attached to them. Sure, I suppose that they could have merely said that they were licensed by whatever the Maltese Gaming Commission is called and be off the hook that way, but I suspect that like most sites, they had something up on their website about how your funds were safe and secure and held in a segregated account, just like Full Tilt lied up until the very end. God only knows who has jurisdiction though

Last edited by Dudd; 06-04-2012 at 08:04 PM.
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