The owners of the Atlantic Club Casino in Atlantic City have filed a formal response to the court injunction that was put in place by a New Jersey court which prevents the casino from finding a new buyer while the firm's initial agreement with poker giant The Rational Group is sorted out in court.
The response comes days after The Rational Group was awarded the temporary restraining order and claims that the troubled land casino will suffer irreparable harm if the injunction is not lifted.
The legal dispute between the Atlantic Club and The Rational Group began when the poker giant failed to obtain a New Jersey Casino License by the agreed to deadline outlined in a purchasing agreement. After the deadline passed, the Atlantic Club sought to back out of the deal and find a new buyer. It is then that The Rational Group decided to file a claim in court in which it wanted to have an injunction placed against such an action.
For its part, Rational claims that the lack of licensing is due to administrative delays, and that the company has already put forth $11 million of the $15 million purchase price that it negotiated with The Atlantic Club last year. Reports have surfaced that the owner of Full Tilt Poker and PokerStars has bankrolled the casino's losses during the purchasing period, agreeing to pay up to $750,000 per month to keep the casino's doors open.
If the deal completely falls through, Rational would lose that $11 million to the Atlantic Club, who may very well be forced to declare bankruptcy.
In the court filing, The Atlantic Club's owner Colony Capital made the case that Rational has not proven that it would suffer irreparable harm in its initial court filing.
The filing noted: “(It) would be a catastrophic result for the Atlantic Club if the temporary restraining order is not vacated and the request for a preliminary injunction is not denied,” Colony’s attorneys wrote."
“Sellers would almost certainly miss the opportunity to pursue other options during the critical summer season and prior to the November 2013 launch of online gaming in New Jersey .”
Additionally, The Atlantic Club says that there are serious doubts that Rational will be allowed to obtain a New Jersey Casino License. This is due in part to claims by The Atlantic Club which says that executives at the poker firm “...were associated with serious criminal activities more extensive and unresolved than previously disclosed,"
That statement appears to be a reference to the legal action taken against PokerStars by the US government in 2011, in which the site was shut down for U.S. action. It should be noted though that Rational negotiated a deal with federal authorities, in which Rational agreed to pay out hundreds of millions of dollars in fines and got back in the good graces of the American government.
It is unknown why The Atlantic Club is just now making the case about Rational's previous legal issues, as the firm surely had to know about the case before it struck a purchasing deal last year.
Casino Listings will keep up to date on any further developments in this legal tussle between the two gaming firms.