The poker world is still buzzing from the Lederer Files interview that PokerNews released in seven 30-minute segments last week. So far I have given you my thoughts on the concept of the Lederer Files, as well as Parts 1 and 2 of the interview. In this installment I’ll take a look at the important points we learned from Parts 3 and 4, along with some of my commentary on these new revelations.
Where the first hour of interviews dealt with the founding of Full Tilt Poker and the inner-workings of the company, Parts 3 and 4 of The Lederer Files started to get into the nitty-gritty details of the lead-up to Black Friday and the companies handling of player funds. Unlike the first two parts where Lederer was fairly candid with most of his responses, in Parts 3 and 4 the “I don’t know’s” and “I don’t recall’s” started flying with a bit more regularity.
Here are some of the important points from each installment of the Lederer Files:
Part 3
• Lederer was ok with the backlog (from the unprocessed e-checks) except for the fact that it put the company over the edge in terms of its cash coverage and there was no Board approval allowing these phantom deposits. Lederer stated, “there wouldn’t have been a problem if there was cash on hand.”
• When asked how distributions could be authorized in the lead up to Black Friday (when the company’s internal memos said Full Tilt Poker would run out of money in months) Howard simply said, “It’s horrible.”
• Lederer claims he was never shown a balance sheet or financial document that would lead him to believe that the company was in financial trouble.
• If Black Friday didn’t happen Howard feels he would have gotten to the bottom of the backlog and he doesn’t think Ray Bitar would have continued on as the CEO.
• Lederer tried –painfully at times– to explain the backlogs in this segment.
Part 4
• Howard made the meaningless point that the backlog was the best argument for skill in poker, because the players making the deposits were losing players.
• In the first member meeting after Black Friday some shareholders were already being represented by lawyers (Perry Friedman). According to Lederer, nine or ten board shareholders were represented by their attorneys. Lederer felt this was a harbinger, yet offhandedly comments that Full Tilt’s own lawyer was doing the roll-call.
• Howard said his only goal was to get players paid, not finding blame, saying something to the effect of, “If we figure out who was at fault it doesn’t get people paid, and that was the only thing that mattered.” The whole group of shareholders couldn’t get on that page.
• According to Lederer, some owners didn’t put getting players paid as a first priority, and some wanted to make sure that a deal was profitable for them.
• Lederer discussed the initial deal from Jack Binion, which called for a 40% dilution of ownership and got booed off the phone. Gus Hansen was named as a person who tried to calm the cat-calls by saying, “let him finish”.
• Lederer was ready to take any deal, and was “preaching from Day 1” that a deal may not be available down the road.
• There was never any legitimate deal rejected (just offer sheets).
