Australian gaming firm sued
This week’s reports include news about the litigation initiated by the administrators of a bankrupt Las Vegas mobile gambling firm Sona Mobile Holdings Corporation against the Australian company eBet Limited. Namely, the mobile firm demanded at least $1.2 million from eBet, alleging that it failed to fulfill promises of financing, with the possibility that a conflict of interest may be involved.
The Sona Mobile’s bankruptcy filing described the company-developed software as "real-time, multiplayer wagering on games that accommodate an unlimited number of players" on cell phones or any carrier.
However, it was reported that the company’s rivals developed similar technology for "on premises" mobile gambling at major land casinos the States, and that Sona allegedly entered a strategic alliance with Shuffle Master on products of this type.
In terms of the litigation against eBet and its CEO, Anthony P. Toohey, it is claimed that eBet committed to paying a $2.5 million license fee to Sona Holdings, and agreed to provide it with advisory services and software development and maintenance services in exchange for a payment, with eBet reimbursing Sona Holdings for these costs through a chargeback arrangement. In addition, it was eBet’s right to designate the CEO of Sona Holdings, so from late 2008 Toohey was CEO of both companies.
However, over time, the two partners encountered differences, arguing over finances, staff deployment and transfers to the eBet payroll. It was also alleged in Sona’s complaint that Toohey "failed to authorize and direct eBet's reimbursement of Sona's chargeback costs under the MSA and failed to authorize reimbursement to Sona for its employee costs resulting from eBet's refusal to assume and transition Sona's technical employees."
As this is a conflict of interest, it was added, as well as a breach of contract, breach of the implied covenant of good faith and fair dealing; and breach of fiduciary duty by Toohey, the company decided to initiate the action, which remains uncommented by eBet.
