Here's how it was explained to me back in October of 2006 by another fellow investor:
Note" The "p" stands for pounds which at that time the conversion was about 60cents/1pound.
To my understanding, after paying SPORTSBETTING their premium that
was due (several $mil), there wasn't enuff to pay Barclays bank the
remaining $30mil owing on the loan since WG was shutting down taking
US bets.
I'm told they were offered 2/different offers to buy them over a
month before all this happened. One by Craig Levett at BetonUSA,
and one from SBet at 1.45p/sh. They turned both offers down because
the BoD felt WG "was worth more than they were being offered". Both
of these were material events and should have been disclosed to
shareholders, and I'm also told that management/BoD can still be
sued for their mismanagement of both offers. Had they accepted the
SBet deal, it woulda finalized before Fristday the 13th and you'd
all be holding SBet shares now.
Here's some info I found on our dear Claude Levy's site. Despite
how much he's hated by most here, his reporting is usually spot-on
(save his throwing in a few "crooks", and "lying scumbag" remarks :)
----------------
"World Gaming recently obtained a short-term loan of $ 1.5 million
just to stay afloat. This money was borrowed from a licensee, a
pretty desperate sign. On a previous occasion, they also borrowed
from another licensee (NOTE by me: I'm thinking this was
BetonUSA,which is why they were able to so quickly obtain the
software and sportsbook - why else could they have gotten it so
quickly from the Administrator, on the same day the Chpt 11 was
filed?).
As a UK domiciled company, World Gaming will have no Chapter 11
protection from the U.S. bankruptcy code. Chapter 11 helps companies
rehabilitate or reorganize. During the process, a creditor cannot
pursue certain debts and so the debtor is given the chance to
restructure affairs to meet financial obligations.
When the debtor is an individual, once the liquidation and
distribution are complete, the bankruptcy court may discharge any
remaining debt. When the debtor is a corporation, upon liquidation
and distribution, the corporation becomes defunct. Remaining
corporate debts are not formally discharged, as they are with
individuals. Instead, creditors face the impossibility of pursuing
debts against a corporation that no longer exists, making formal
discharge unnecessary.
The deal that World Gaming struck with their licensee involves the
source code of their software and their hardware as security for the
$ 1.5 million loan. World Gaming is mortgaged right up to the hilt,
ready to go under. Creditors can take it over for peanuts and the
shareholders, not for the first time, will get screwed. Starnet at
one time had a very profitable porn business, which they "sold."
However, the money was never paid so the shareholders got nothing,
just another insider's crooked deal. The same trick will probably be
done with the gaming business.
The deal also includes a waiver for the licensee fees until the loan
is repaid. That means that World Gaming's revenues will be hit, and
the chances are the crooks will find bankruptcy staring them in the
face that much faster.
Under English law a company that can't pay its debts as they fall
due is technically bankrupt and if they don't file for bankruptcy
soon, the directors are taking the risk of being sued personally and
on behalf of the company."
So, with the software & SPORTSBETTING gone to BetonUSA,
there's really not much left for paying off their creditors. About
all that's left is the smaller Licensees which will probably be
going up for sale to the highest bidder, and under the same terms
that BetonUSA got? And I do know for a fact that there are two
groups in the UK & EU that're flush and trying to acquire some of
those holdings.
Hope that helps Sloth? I just wouldn't hold much hope there'll be
anything left over to pay shareholders. Also, Krom mentioned that
he thought shareholders could get anywheres from $0.32 to $1.00, but
that seems highly unlikely to me considering the SP was $0.13 at the
time trading was suspended. And if by some miracle there were money
left over, does anyone really think that shareholders would get
compensated before management was paid for their $0.13+ Options?
Hope that helps some. It was a painful walk down memory lane for me.
Sloth
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