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Internet poker giant and PokerStars parent company The Rational Group was granted a temporary restraining order by a New Jersey court, which has effectively stopped the owners of the Atlantic Club Casino in Atlantic City from selling the casino for two weeks.
The move was made after Rational said that Atlantic Club's owners, Colony Capital LLC was acting in bad faith in regards to the deal that the casino and poker giant had reached last year.
In documents filed with the court, Rational claimed that it had agreed to purchase the Atlantic Club for $15 million. $11 million of that total was already to Colony Captial. Rational alleges that Colony let the deal expire and then tried to claim another $4 million as a termination fee. This would put The Rational Group in a spot where they are out the full purchase price of the casino but would have nothing in return.
Rational also claims that Colony wanted an extra $6 million in order to extend the contract for 10 days, during which time the Atlantic Club's owners could still negotiate with outside parties. The owner of PokerStars and Full Tilt Poker responded by offering to pay the remaining $4 million of the $15 million total under the terms that the sale contract was extended until it could obtain a New Jersey casino license.
Rational CEO Eric Hollreiser said that his firm has funded the casino throughout the winter season, saving 1,800 jobs and keeping the casino from filing for bankruptcy.
The two firms agreed to the deal last year, with Rational wanting to take control of the casino in order to take advantage of legalized online gambling throughout the Garden State. The deal was given an expiration date of April 26th, which came to pass because of delays in Rational obtaining a New Jersey casino license.
As part of the deal, Rational agreed to finance the casino's losses, which would eventually be counted against the overall purchase price of the casino. Furthermore, Rational's purchase of the Atlantic Club was supposed to save 1,800 workers from being laid off. It is unknown what will happen to those workers now due to the deal falling through.