A lot of this is still in the rumor phase but this blog isn’t exactly the New York Times or anything and some supposedly official statements confirm what is being discussed on 2+2 and elsewhere.
According to Gambling911, UB/Absolute have released the following statement via their Public Relations Department:
Absolute Poker and UB ceased their U.S.-facing operations due to recent legal developments in the United States. The company is currently restructuring and will focus its remaining resources on consolidating its non-U.S., rest-of-the-world operation and software business. Unfortunately, this also means an immediate need to downsize and streamline operations significantly at both online poker rooms, with a view of becoming more efficient in the way the business is conducted.
Today’s decision has not been made lightly, or in haste. It comes after considerable review and analysis of the impact that ‘Black Friday’ has had on the business as a whole. All affected employees have been informed of this necessary restructure, and staff will be reduced across several areas of the business.
A company spokesperson said: “We regret that we have been compelled to take these actions. We have worked tirelessly to create a truly amazing company that is filled with extraordinary people. We have always been and still remain fully committed to our employees and players. At the same time, we are confident that this restructuring will strengthen the company and its future.”
In addition, the company’s legal counsel is in continuing discussions with the U.S. Attorney’s office to formalize an agreement that would facilitate the return of funds to U.S. players. Further information and timely updates will be provided to players moving forward as our legal team works to resolve the outstanding issues.
To: All Staff
From: The Executive Management Team
Date: Monday, May 2, 2011
As all of you are aware, action was taken by the U.S. Department of Justice on April 15th and we have closed our US-facing operations. We now have to focus our resources on developing our non-US operations and software business. Unfortunately, this also means we must immediately restructure our organization and significantly downsize our operations.
It is a very sad day for all of us, as we have worked so hard to create a truly amazing company that is filled with extraordinary people. We have always been and remain fully committed to the employees and consultants of this business.
TBT employees will be paid full liquidations in accordance with Costa Rican labor laws. Consultants will be paid severance based on length of service. IDS liquidations have been previously funded in full to Olman Rimola.
Some of you will be approached by the business for a new role with a much smaller company that is focused on continuing our non-US operations and software businesses.
HR or direct managers will initiate individual meetings with everyone to provide full details, and we hope to get through all of these over the next few days.
Today’s decision has not been made lightly, or in haste. It comes after considerable review from all angles of the impact Black Friday has had on the business as a whole. We are disappointed that events of the past two weeks have effectively forced us to take this action, with downsizing of the business now unavoidable.
We ask that all of you work from home tomorrow and you will be updated with new work arrangements soon.
It truly has been a pleasure working with all of you. We thank you for the significant time and dedication you’ve all shared with us over the years and wish you all the best in your future endeavors.
Haley seems to either be quoting the 2+2 thread or has also received a very similar version (shorter, and Haley’s does end strangely so maybe it is truncated).
Haley also cites second-hand reports that there is no actual plan to form another company and this is simply a move to buy time so that assets and key personnel can be moved out of the country.
And another 2+2 member, Mookman5, posted a letter he received which was sent to the original Absolute shareholders:
April 30th, 2011
Dear Madeira Fjord, AS Shareholder,
Since the last meeting of shareholders, there have been a number of developments that affect our Company.
Most importantly, Blanca Gaming has provided notice to our subsidiary Avoine that it is currently unable to make any payments toward its debt obligations. Additionally, Blanca has further advised that there will be no future payments.
Over the past 60 days, the Company has accumulated current debts in excess of $250,000 which are increasing at $100,000+ per month. These obligations are primarily legal and professional fees in Norway.
With no cash on hand and no prospects for any cash flow for the foreseeable future, the Board of Directors is required by Norwegian law to enter the bankruptcy process. The Oslo court will appoint a Receiver who will review the affairs of the Company including the assets, liabilities, and its recent transactions. After a full assessment, the Receiver will make a determination how to enforce any applicable rights, obligations, and obtain the maximum value for its assets in the best interest of the Company.
As the Receiver is a court appointed 3rd party, we can be assured that the Receiver will evaluate all relevant options including any applicable soliciting proposals from interested parties related to the assets of the Company. Funds accumulated through the Receivers’ efforts will be disbursed according to Norwegian law.
As of the date of the filing, the Board of Directors is relieved of duty, and all future matters are in the sole control of the Receiver.
Madeira Fjord, AS Board of Directors
If you don’t know how that fits into the whole Absolute/UB thing, check out this article that I linked to the other day outlining some of the shadier sides of the people behind UB and Absolute. You can learn all about this shell company set up in Norway in the article but the most relevant part is this:
Along with the bad news about Absolute Poker’s financials, shareholders learned that Madeira Fjord might be in the crosshairs of tax officials in Norway. The company hadn’t withheld taxes on the 2007 dividends. And that $250 million in notes held by the Portuguese subsidiary turned out to be taxable in Norway, creating a multimillion-dollar bill. To avoid the liability, Janusz simply canceled the notes. Norwegian officials are likely to question that move.
What Does All of This Mean for UB and Absolute Customers?
That’s what people really want to know, right? Well, everything I’m about to say is speculation. Informed speculation due to the fact I’ve worked in the business and followed UB and Absolute in the press but nonetheless it is just speculation.
I’ve always had my doubts about the management at both UB and Absolute. Just the entire way they handled their business seemed too cowboy for my likings. It seemed too much like frat boys living the balla lifestyle. Some people like that but it just isn’t my cup of tea (I don’t even like tea).
I also never expected them to come out of this DOJ thing on the other side. I never saw them operating in a non-US facing capacity. They simply didn’t have enough non-US business. If you look at what I’ve written here, said in the 2+2 PokerCast, and on QuadJacks, I rarely mention a future going forward that includes UB or Absolute. I have focused on what happens next for Full Tilt and PokerStars because both companies do have the ability to survive without their US customers.
Someone asked me the other day what I thought was going on at UB/Absolute and I jokingly said that I wouldn’t be surprised if they’re still allowing US play just so that they could rake as much as they could before the DOJ forced their hand. I was speculating a cynical view that the AB/Absolute lawyers thought they could toy with the DOJ lawyers and drag out the negotiation for the deal that Full Tilt and Stars signed giving them back their .com domains. And that sooner or later the DOJ would offer them a take it or leave it deal with X number of hours to decide. I was also thinking that their long-term plan was to get as many people to churn their accounts empty so they had to return less money.
Even though I was half-joking at the time I’m beginning to believe that this is exactly what’s happening. Maybe it was the fact that even non-US customers were being limited to withdrawing $250 a week that sort of got the cynical side of me going. You don’t do that if you’re trying to instill trust in your brand. And with the completely unprofessional way they handled the cheating scandals I couldn’t help but think that there might be something more going on.
In my most humble opinion, I think UB players are going to get screwed. There is nothing I have seen in the past from any of the people involved at UB or Absolute that makes me believe that they will do anything whatsoever to put the player’s interests first. I’m siding with the view that Haley published which is that basically this whole thing about refocusing the company is a smokescreen while they scramble to figure out how much they can salvage and pocket for themselves.