Agreement with new owner of Cereus online poker network takes Tokwiro out of the picture
The infamous legacy of the online poker software involved in the UltimateBet and Absolute Poker scandals – the biggest in the industry's history turned out to be a liquidator's settlement this week.
The complex mix of companies involved in the scandal has been diluted by the settlement, which saw software developer and former owner Excapsa reach agreement with XMT Liquidations and the new owners of the Cereus Network, Stuart Gordon's Blanca Games Inc after years of argument.
The deal effectively takes Tokwiro Enterprises, the former owner of Absolute Poker and UltimateBet owned by former Kahnawake chief Joe Norton, out of the picture. Blanca aquired Cereus in August this year for an undisclosed amount.
In a public statement XMT Liquidations, the company appointed by the courts to finalise Excapsa's affairs, revealed that the failure of negotiations and the time and costs of continued litigation had persuaded leading shareholders of the need for an "…agreement with the Tokwiro Group and its successor in interest, Blanca Games.”
As a result, the liquidator announced that: "Blanca Games will acquire Excapsa’s interest in the debt and related security for a total payment of $2 million, of which $1 million will be paid on closing and the balance will be paid on March 31st.
"In the event of a sale, merger or similar transaction involving the business and assets acquired by Blanca from Tokwiro on or before March 31, 2013, Excapsa (now known as 6356095 Canada Inc) will receive an additional payment for its debt and related security ranging from 8 percent to 20 percent of the net proceeds from the transaction attributable to the ub.com brand assets.
"The parties have agreed that 50 percent of the proceeds from any transaction will be attributed to the ub.com brand assets.
"Excapsa will acquire the remaining interest in the gaming software (the Tokwiro Group retained a residual interest to use the software for internal business purposes, and this will be relinquished.)
"The parties to the agreement will exchange full and final releases."
Liquidator Sheldon Krakower reveals that the deal will see Excapsa's cash position before expenses total $11.8 million.
In related news, the Montreal Gazette reported last week that XMT Liquidations Inc. had announced that Excapsa had completed a settlement with Blast Off Limited, the owner of the Ultimatebet online poker brand.
The settlement, which was approved by the holders of more than two-thirds of Excapsa's outstanding shares and by the Ontario courts, involved Excapsa paying US $15 million to Blast Off in return for a full and final release of all claims relating to the allegations of cheating on the Ultimatebet websites.
In addition, Excapsa acquired an ownership interest in all gaming software owned by Blast Off and its subsidiaries.
The XMT announcement noted: "Our primary goal throughout these negotiations was to restart payments under Blast Off's promissory note and avoid lengthy and costly litigation. The settlement accomplished this objective. Excapsa is a company in liquidation, so our focus is on maximizing recoveries for its shareholders. We are hopeful that the gaming software will provide opportunities to generate further value for Excapsa's shareholders.
"Our investigations have confirmed that the tool which enabled the cheating on the Ultimatebet sites was inserted before Excapsa purchased the software code from a third party in 2005. We do not believe that the directors or officers of Excapsa had any knowledge of the tool and, importantly, there was absolutely no admission of liability or wrongdoing pursuant to the settlement.
"We are currently evaluating options for recovery of the costs and damages incurred by Excapsa in connection with the settlement including, possibly, pursuing legal action against the perpetrators of the cheating and prior owners of the software code."