Atlantic Club challenges Stars bid to revive casino sale
Seller Colony Capital disputes PokerStars' argument that the 26 April deadline should not have been enforced
New Jersey operator Atlantic Club has hit back at a lawsuit filed by PokerStars’ parent company Rational Group claiming it was entitled to terminate the contract to purchase the struggling casino.
The casino’s owner Colony Capital has also said it does not have to repay the US$11m the Rational Group has so far invested in the venue. The company states it is entitled to keep all money paid towards the $15m total acquisition cost because Stars did not obtain an interim casino authorisation in New Jersey by the stipulated termination date 26 April, according to NorthJersey.com.
PokerStars parent company Rational Group filed a lawsuit last week to obtain a temporary restraining order blocking Colony Capital from cancelling the agreement signed in December last year. Receiving a licence by this date was impossible once state regulators informed PokerStars in late March the application process, originally scheduled to last 120 days from December, had been delayed, according to the Rational Group’s lawsuit filed last week.
The plaintiffs then suggest they were given one day’s notice from Colony Capital that the purchase agreement would not be extended, however this is the key dispute in the filed documents, as Eric Matejevich of Colony Capital, said he warned Rational a month before 26 April.
It was reported that Stars only completed its full application in mid-April, despite having been expected to do so in January.
PokerStars’ argument in the lawsuit is if any provision in the purchase agreement is invalid, such as the 26 April termination date, “all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect”. The Atlantic Club retort states in contradiction “plaintiffs agreed to a termination provision that included the surrender of advances and a termination payment as the cost of securing an opportunity to acquire the Atlantic Club”.
PokerStars stated it was offered the opportunity to pay $6m for a 10-day extension to the purchase agreement by Colony Capital, while its counter-offer to pay $4m for an indefinite delay was rejected.
Colony Capital declined to comment, while Rational Group were unavailable to, but a source close to the matter told eGaming Review “the contract cannot self-terminate prior to the regulators receiving the complete application and having 90 days”.
“That would be sometime in August for the contract termination,” the source added.