Purple Lounge Enters Liquidation
Thursday, 31 May 2012
According to a release by the new management of Media Corp Plc, Purple Lounge's parent company, the “corporate failings” of the previous management has forced the new management to liquidate Purple Lounge and fire all Purple Lounge staff.
Specifically citing former managers Justin Drummond (Previous Executive Chairman) and Sara Vincent (Previous MD of Purple Lounge and Interim CEO of Media Corporation) in the release, the statement attributes “historic operational and financial failings within the business” to be the cause of the Purple Lounge's failure. The site's spectacular failure has resulted in an uproar in the poker community resulting from unpaid Purple Lounge player balances.
According to the company's own statement, the company has instructed its liquidators to “look into the financial arrangements within the Purple Lounge group.” Should this investigation reveal that the previous management had not separated player funds from operational funds, then former management may face legal inquisition as they would have fallen foul of their legal obligations under the terms of their gaming license; a serious offense.
The company has instructed its liquidators to “review the position as to player funds”, but has not given any indication of the status of those funds.
Additionally, website pokerfuse.com has reported that it may seek action against the group or its former management on behalf of players. Depending on the results of further investigation into the segregation and reporting of player funds, allegations against the previous management on these grounds may include fraud, or if as in the case of Full Tilt Poker, operating a Ponzi-Scheme, a type of investment fraud that famously got Bernie Madoff convicted and sentenced to 150 years in prison.
Drummond is currently listed as CEO of Ascend Capital Plc. according to his profile on business social media site Linkedin.com. In its 12 year history Media Corp Plc. peaked at a valuation of £50m, however the company's market cap is now at just £2.4m (down approximately 95% from peak). The new management team have indicated that they feel they will bring the company back to profitability.