Pinnacle Entertainment wins FS+G auction
Land-based casino operator prices out William Hill and other bidders with US$4.5m bid - committee of creditors objects to seven-figure claims from former Heartland Poker Tour owner.
Pinnacle Entertainment, the operator of a number of bricks-and-mortar casinos across the United States, has become the new owner of the assets of Federated Sports+Gaming after fighting off competition from William Hill and three other bidders in Wednesday’s auction.
The operator, whose portfolio includes seven casinos and one racetrack, lodged a winning bid of US$4.2m for the most valuable asset of FS+G – the Heartland Poker Tour – while the remaining assets, including the loss-making Epic Poker League, went for a further $300,000.
Among the other bidders was All-In Production LLP (AIP), the former owner of the HPT, which is believed to be due up to $1.97m from the sale of the tour to FS+G last June. The other unsuccessful bidders in the auction were Chilipoker CEO Alex Dreyfus and US-based casino management company Rush Street Gaming.
Court documents seen by eGaming Review specify that “[Federated Heartland Inc] listed AIP in its Schedule D as having a secured unliquidated claim in the amount of $1,966,052.00.
However a committee of FS+G’s unsecured creditors has issued a statement claiming the HPT asset purchase agreement rendered the company insolvent, explaining: “[FS+G] did not receive reasonably equivalent value in exchange for the AIP Transfers, and that the AIP Transfers are avoidable as fraudulent transfers under Section 548 of the Bankruptcy Code.”
The committee adds that “[It] will not know the amount that AIP claims to be owed until AIP files a proof of claim.” In addition to the aforementioned claim for close to $2m, previous payments to AIP and its principals totalling $2.35m are being contested by the committee as potentially fraudulent transactions.
It states: “Unless and until AIP’s secured claim is allowed by a final Order of this Court, the Committee objects to any portion of the sale proceeds of the Debtors’ assets being paid to AIP, and respectfully requests that such proceeds from the sale of the assets of Federated Heartland, Inc. (“FHI”) be held subject to further Order of Court after determination of this Objection and any related proceedings.”
FS+G filed for Chapter 11 bankruptcy in March this year, two months after Pinnacle Entertainment first expressed an interest in the acquisition of the Epic Poker League.
The buyer’s plans for the assets of FS+G are currently unclear, although many commentators anticipate that at the very least the HPT will continue to operate.