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Associated Press, Published April 24 2012

French investor push to buy Full Tilt Poker fails

LAS VEGAS — A French investment group's push to buy troubled online poker operator Full Tilt Poker for $80 million fell through after the potential buyer couldn't agree with the Department of Justice over how quickly players with money tied up on the site would be repaid, a lawyer for the group said Tuesday.

Benham Dayanim, a Washington-based attorney for Groupe Bernard Tapie, told The Associated Press on Tuesday that prosecutors changed their offer earlier this month and wanted players repaid in full within 90 days of the sale.

“We were not prepared to do that,” Dayanim said. “The DOJ did not make that a deal-breaker until the very end.”

Jerika Richardson, a spokeswoman for the U.S Attorney's Office for the Southern District of New York, declined to comment.

Executives and others associated with Full Tilt were indicted a year ago on charges of money laundering and bank fraud. Prosecutors said they tricked banks into illegally processing funds for online gambling by disguising the payments as transactions for purchases like golf balls and flowers.

The site was immediately shut down to Americans, and later to the rest of the world, after it lost its license to operate overseas. Gambling regulators on the British Channel Islands said at the time that the site lied to officials about its finances.

The group backed by French business tycoon Bernard Tapie got a letter of agreement from the Department of Justice in November in hopes of brokering a sale and getting gamblers their money back. The Tapie group would have paid players outside the U.S., while Americans who gambled at the site would send claims to the Justice Department. Current investors with stakes in Full Tilt would not have been allowed to have a stake in the new company.

The Tapie group planned to restore balances immediately to let players play poker, but needed more time before allowing them to withdraw all their money from the site, Dayanim said.

Dayanim said the change came just as the deal with the Justice Department was being finalized.

“Clearly, we understood that they were negotiating with another party,” Dayanim said.

A lawyer for Full Tilt CEO Raymond Bitar, one of the company executives under indictment, did not immediately return a phone call seeking comment from the AP.

Dayanim said the deal also failed because the group couldn't resolve whether creditors and courts would view the buyout as valid without coming after Tapie for Full Tilt's other debts. More time to restore player balances would have helped resolve that, but the 90-day demand made that unworkable, he said.

“Ultimately, we made the best offer we could make,” Dayanim said.

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