With former CEO David Carruthers and founder Gary Kaplan still confined and awaiting trial, the mid-July 2006 shutdown of online gambling group BetonSports was again in the spotlight this weekend, with the liquidators of the failed group giving interested parties an update.
Peter Wastell and Nigel Hamilton-Smith of Vantis plc, who were appointed liquidators of Betonsports (Antigua) Ltd, a subsidiary of BetOnSports plc, in November 2007, especially appealed to any owed players who have not yet submitted a claim to step forward.
Betonsports (Antigua) Ltd was the operating company within the BetonSports group responsible for the individual gaming contracts and betting transactions with the players, primarily in the United States of America. Vantis was appointed by the Financial Services Regulatory Commission (FSRC) of Antigua and Barbuda to liquidate what remained of the company following its shutdown by US Department of Justice action.
Vantis Business Recovery Services, a subsidiary of Vantis plc was also appointed to act as Liquidators of BetonSports plc, the parent company in the United Kingdom, on 16 May 2007, and Liquidators of three other subsidiary companies in the group on 15 August 2007.
BoS (Antigua) Limited ceased trading as a result of an indictment and permanent Injunction issued by the Department of Justice in the United States of America against the company and certain other companies in the group in July 2006. However, BoS (Antigua) Limited, since November 2006, has been under the complete control of the FSRC, pursuant to an order of the Antiguan High Court which remains in effect (see previous InfoPowa reports).
In their update, the liquidators outline the difficulties they and BetonSports have faced since the shutdown in July 2006. They describe the "devastating effect" that this had on the formerly successful company's financial position, and the consequent need for the provision of contractual severance and termination costs in respect of the company's call centres, many hundreds of staff, supplier and finance contracts.
On 22 November 2006 the FSRC obtained an order of the High Court in Antigua effectively freezing the company's assets and preventing ongoing trading or distribution of assets.
In a letter to interested parties, the liquidator says: "By the time of our appointment, the company’s books and records demonstrated that its realisable assets were less than the aggregate of its liabilities, or in short, the company was insolvent.
"A statement of the company's assets and liabilities provided by the Betonsports board of directors in February 2007, seven months prior to our involvement, shows assets of the company of $10million, and liabilities of $26.9million.
"Although the liabilities figure includes betters/players/customers balances of $6.8million, we now know that these players are owed over $15.8million (as per the company's database)."
BetonSports is therefore insolvent on a book value basis by over $25 million, the statement concludes, significantly hinting at further legal action against some of the former directors by pointing out that the US authorities have taken an active interest in the case, particularly in regard to the actions "of some of the Betonsports group directors." Vantis cannot comment further on this aspect as legal proceedings are ongoing.
Turning to the company's assets, Vantis revealed that it received funds passed on by the FSRC in respect of asset realisations recovered by it of $2 million. A further $8 million is known to be outstanding from debtors across the globe, and Vantis is attempting to collect in the relevant jurisdictions.
"We have a duty to assess the viability of pursuing these assets, by reference to legal advice and to attempt recovery where it is economic to do so," the statement advises, revealing that Vantis has received the approval of the relevant US authorities for the collection of these debts.
The overriding obligation and intention of the High Court in Antigua, the FSRC, and Vantis itself is to protect the interests of all creditors, and ensure that all creditors are contacted as far as possible, the statement asserts.
"Many players have not been reached because they have invalid email addresses, or the database information held for them on the Betonsports system has been corrupted. The responses/claims from player creditors has been disappointing, and we are seeking the guidance of the Court in Antigua to circulate a national newspaper advertisement in the USA, and contact other players by regular mail where email contact has not been possible," the statement continues.
"All of these actions are under the supervision and sanction of the Court, and the authorities place great emphasis on reaching and paying as many of the players as possible from assets recovered."
In the interests of transparency, Vantis has disclosed its fee structure from the liquidation as 5 percent of asset recoveries and $20 per creditor claim agreed, reconciled to the Betonsports system, and paid. The 5 percent collection fee does not apply to funds passed to the liquidator by the FSRC, and legal fees and disbursements are charged to the Liquidation estate at cost.
The statement closes with an assurance that Vantis is seeking the best possible outcome for all concerned, but cannot currently estimate the timing and value of any distribution which may ultimately be returned to the players/creditors.
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