Pokernews’ final instalment in The Lederer Files examines the eventual transfer of assets to PokerStars.
✖We are getting closer to a deal with PokerStars and the critical milestone was mid-June. Those still knocking around at Full Tilt Poker were told it was “almost done” and to get set to sign away the company on July 2. Howard, and those present, were also told they needed to take a ‘Leap of Faith’ (LOF).
✖This meant using the $10million in the bank to settle the liabilities down to zero and basically that if the deal didn’t happen they would be completely broke. Lederer felt it was a good LOF from a customer point of view and it was the right course of action to take at the time.
✖It was a shock when the deal was delayed until July 9th and Lederer revealed they only really had money to run he company for July. That was when a conversation happened with Tom Dwan regarding money he owed Full Tilt. Lederer disagreed with Dwan’s plan to pay it to the poker community, new owners of FTP or the DOJ and instead persuaded him that if they went into August without a deal signed he’d hand the money over. The ‘burn rate’ of the company right now was $1.5m.
✖Lederer revealed at this point it would have been impossible collecting players/member members loans as “we couldn’t even talk to some of these people”.
✖When they neared closing the deal Lederer said it got “very dicey” as they fully expected it to happen up until 10pm on July 9. He doesn’t really know what happened in that sense and “didn’t want to speculate as to what it might have been”. He admitted they “thought it might be dead”.
✖In terms of why the deal took so long to sign with PokerStars, FTP did “reach out” to Stars in the summer of 2011. Stars were “very excited” about the idea. Lederer added they “loved the idea of rescuing our customers because they really care about the poker community. They’ve handled themselves with the utmost professionalism in this whole mess.”
✖PokerStars came back very quickly and said they couldn’t do the deal, as it was “too complicated”, “too messy”, and “too expensive” – due to the potential cost of the Department of Justice (DOJ) judgment. If Stars had bought the company in 2011 their bill from the DOJ could have risen from $1.5bn to $2.5bn. Lederer said that he “applauds them” for getting out early and for acting “respectfully”.
✖A year later they had “presumably made significant progress with the DOJ in discussing a settlement”. FTP’s assets were eventually thrown into the deal and Lederer said the assets were “important from both sides of the deal”. Lederer added that it did take a “while to get there but DOJ deals don’t happen overnight”.
✖When asked whether he had a sense of closure, Lederer commented that he won’t “until our U.S. customers are made whole or as much as they can”.
✖In terms of support he “got a lot ” and confided in Eric Seidel a lot as he was “very calming” and “focused on our customers being paid”. Lederer also didn’t think he’d have got through it without his family.
✖Lederer wanted to address the silence from them, as cited in the ‘Silence of Full Tilt Poker’ blog penned by Matt Glantz. He said that he “owed the poker community my silence” and that as desperate as he was to defend himself he “didn’t feel” that doing it would help customers see their money. Add to this the fact all the groups they were speaking to, and the DOJ, told them to stay silent about the deal. The DOJ even threatened if there was “one more leak” they were “walking away”.
✖Lederer added that telling customers if and when they would get paid wasn’t an option due to how much it “swung wildly” from day to day and the complex nature of the deal itself.
✖ “I 100 percent understand the anger – the players had every right and they were put in…there was no excuse. That was their money and they deserved to get it and they weren’t. I have no issue with our customers,” he said.
✖Lederer does plan on playing poker again as he “didn’t actively create the situation” in the first place. He says that he decided early on that he would try to use the assets of the company to help affect a deal to get the customers paid, and he did “whatever he could” to do this.
✖In a final statement to FTP customers he said: “As an owner of FTP I take full responsibility for what happened and what happened wasn’t right. It caused a lot of pain, suffering and in some cases inconvenience, for our three million customers. That wasn’t right and I’m truly sorry.
✖ “I look very much forward to the reopening of the site under PokerStars leadership. I’m incredibly thankful at their incredible professionalism and the way they handled the situation. I’ll be rooting for the company everyday. I can’t tell you how happy I am that the deal happened. Hopefully all our customers will be made whole and the brand, software and company.