Phil Ivey vs. Tiltware Legal Complaint

June 1, 2011 - 7:54 PM EDT
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Subject: Poker has obtained a copy of Phil Ivey’s legal complaint against Tiltware LLC and other people and companies related to Full Tilt Poker.1 In the complaint, Ivey’s lawyers request over $150 million in damages and freedom from the non-compete clause in his contract with Tiltware, alleging that Tiltware et al. violated their contract and severely harmed his reputation.

The complaint centers around four principal allegations: That Tiltware violated its agreement with Ivey to “provide software and related support for the conduct of legal internet poker” (emphasis added); that Ivey was not informed of the fraudulent activity alleged in the April 15th indictment against Tiltware and others or of United States Attorney for the Southern District of New York’s “repeated warnings and clear notice” that Tiltware’s conduct was illegal; that Full Tilt’s “failure to maintain sufficient player’s reserves to return player’s [sic] funds” represents a failure to act in good faith; and that Phil Ivey’s reputation has been irreparably harmed by Tiltware et al.’s actions. Ivey asks to be released from his non-compete clause immediately as a result of the breach of contract and for “an amount that exceeds $150,000,000″ for damages to his reputation.

Ivey’s non-compete agreement with Tiltware appears to be stressed quite heavily in the complaint. Freedom from this is requested in three of the six causes of action, and it is the principal demand in two of them. The last cause claims that Ivey had endorsement opportunities with other companies that Tiltware et al. refused to allow but provides no details about what the nature of the potential deals. It appears that the alleged harm to his reputation together with the non-compete agreement are the primary motivation for the demand for over $150 million in damages, implying that Ivey anticipated extremely lucrative endorsement deals with other companies.

Subject: Poker considers this story to be extremely relevant to our readership. We are actively working to learn more, and we plan to continue covering this story and to provide more thorough analysis in later articles.

Edited on 6/1/2011 10:14 PM EST: Removed a misleading paragraph about Phil Ivey’s knowledge of Full Tilt’s inner workings. While the complaint does express Ivey’s general lack of knowledge about such matters, our discussion of it incorrectly identified the use of anonymous defendants (a common legal practice that likely reflects the complexity of Full Tilt’s corporate structure) as further evidence of this. S:P apologizes to our readers for any confusion and thanks S:P writer Karak and commenter Grange95 for bringing this error to our attention.

Footnotes

  1. Thanks to Oskar Garcia of the Associated Press.

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9 Responses to Phil Ivey vs. Tiltware Legal Complaint

  1. JinkyMcNuts
    June 1, 2011 at 9:37 PM EDT

    Hell, if Phil Ivey gets his money, then the U.S. players won’t get squat unless he pays them himself. Glad I played on Pokerstars, but feel sorry for the Full Tilt players.

  2. Grange95
    June 1, 2011 at 9:52 PM EDT

    Don’t read too much into the “Unknown” defendants. In some jurisdictions this is standard practice to make it easier to bring in more parties later. It doesn’t necessarily mean that there will be more defendants or that Ivey is in the dark about Tilt’s corporate structure. Most likely, his contract was solely with TiltWare, and they will be the primary if not sole defendant,

  3. Noah Stephens-Davidowitz
    June 1, 2011 at 10:29 PM EDT

    Grange,
    Thanks so much for pointing that out. The article has been modified to reflect your point.

    Apologies to our readers for any confusion.

    • Grange95
      June 2, 2011 at 12:19 AM EDT

      This was just a small legal point to clarify your excellent summary of the lawsuit. Just one of those arcane legal procedures that keep us lawyers employed!

      And to clarify, there could be more defendants added later, if evidence supports it. Parties get added & dropped rather routinely, particularly when dealing with affiliated corporations. For example, it wouldn’t be shocking to see Bitar, Lederer, Pocket Kings, etc. get added as parties depending on how Full Tilt (errr, TiltWare) defends the case. In fact, this case may give poker players a peek behind the Byzantine Tilt corporate structure.

  4. SteveCut
    June 1, 2011 at 11:18 PM EDT

    So every informed online poker player in the world was aware of the hoops being jumped through to get U.S. players’ deposits and payments processed – except for Phil Ivey? However he *was* aware of the DOJ’s repeated warnings and clear notice. Hmmm… Does anyone have any further information about these clear warnings and notice? Why would the DOJ do that? “Hey guys, we’re assembling this secret, expensive case to sue you for billions but if you stop allowing Americans to play with you, we’ll throw it all in the trash?” That makes sense, right?

    I am shocked that Phil is jeopardizing the return of thousands of ordinary Joes’ funds apparently in order to enhance his own saleability and put a few more million in his pocket. It seems so out of character. Has he picked up some unsavoury advisors? But he’s the greatest poker player in the world, right? Whatever the leeches may have advised him to do, he must have planned his hand, surely?

    His reputation has been harmed to the tune of $150 million? Maybe there’s still more to this but for the time being I feel that, to paraphrase Phil himself, ‘Phil Ivey’s reputation has been irreparably harmed by’ *Phil Ivey’s* actions.’

    • Noah Stephens-Davidowitz
      June 1, 2011 at 11:27 PM EDT

      Steve,
      The complaint says that Ivey was NOT aware of the DOJ’s warnings.

      It’s not hard to imagine that the DOJ would warn someone that they were breaking the law and ask them to stop before prosecuting them, especially when the laws being broken are fairly complex.

      • SteveCut
        June 2, 2011 at 12:58 AM EDT

        Sorry, I misread that. The reason I thought Ivey was aware of the warnings was because he included them in his complaint, but presumably he was aware of them only after BF. And yes, the DOJ may have issued warnings before investing heavily in the case. Just not seen it mentioned elsewhere.

  5. Acer 3692wlci Battery
    June 1, 2011 at 11:51 PM EDT

    Phil Ivey attorney also represented Doyle Brunson, Shawn Sheikhan, Michael Jackson family & Britney. Let’s see where it goes….. poker

    • Nofx Fan
      June 4, 2011 at 11:00 AM EDT

      A a Hell’s Angel.

      If you’re curious the story behind that is pretty crazy. HA’s stormed Harrah’s in Laughlin, NV as a rival motorcycle club was in force there (Mongol’s). After a barrage of guns, hammers, chains, even an axe…3 men were dead and dozens injured. All in the middle of the day and right on the casino floor. There’s lot’s of video of it from security cameras, in fact the video was used extensively in identifying and charging most of the participants.

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