The new management of Media Corporation plc, owners of Purple Lounge, have finally said something about the collapse of the poker room.
In a response to a series of questions posed by gaming news service InfoPowa, Media Corp has attempted to explain the current situation. Its new managers have admitted that operational and customer funds have not been properly managed, stating “... it became clear very quickly that there was no option but to close the operation due to the financial and operational failings of the past.”
In summary, there it not much money left. Players are only likely to get a fraction of their deposits back and even that will take a very long time.
Player deposits were held by a subsidiary company in Malta. That was the regulated company, and it was required to hold customer funds in segregated accounts by the Maltese Lotteries and Gaming Authority (LGA).
The appointment of a liquidator for Purple Lounge in the UK has no relevance to players getting their money back because players are not creditors to the UK company: Players are creditors to the subsidiary in Malta and the UK parent has no liability for its debts.
It is a long process to liquidate a company in Malta, and players must wait for a Maltese liquidator to be appointed before their claims can be examined.
Players will rank equally with any other unsecured creditors that the Maltese company has. Media Corp states that outstanding player balances amount to approximately $800k. No mention is made of any likely recovery rate, and the company is unlikely to have much idea itself until the liquidator reports on the situation.
Player Action Group
Players have formed an action group which is examining the possibility of legal action. Players with outstanding balances may join the group by contacting email@example.com.
Media Corp commented on the prospects of legal action:
To be clear, we know a small group of players have outstanding balances of over $10,000, some of whom are assessing their position, though any claim we believe would be against Purple Lounge and former Purple Lounge Directors and Management.
The new Directors allow their own feelings about former directors Jason and Justin Drummond to surface: “If there has been any wrongdoing the new management team will be supportive of any action to bring wrongdoers into account.”
The Purple Lounge website carries only formal notices, and has recently been changed to reflect the fact that players are not creditors of the UK company. Their advice to players remains:
If you would like to make a claim with the creditors, please email firstname.lastname@example.org and we will supply you with contact information for the creditors when they are appointed.