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EBet breaks its silence on upcoming auction of assets
Lea Hogg
2 days ago
EBet says that the upcoming auction for the sale of EBet’s assets is a significant event and therefore warrants a detailed explanation. A spokesperson for the company said that its crucial to understand that this auction is not a signal of business disruption or discontinuity. On the contrary, it’s a strategic move designed to ensure the smooth and uninterrupted operation of the business.
“The auction process does not contemplate any intention of shutting down our websites or ceasing our iGaming
business operations.
We have sufficient liquidity to continue operations in due course through the pending auction date.”
SiGMA News once again reached out to EBet, and this time, EBet provided an in-depth explanation about the rationale behind its impending auction of assets.
EBet, Inc. engages in the provision of online gambling platforms focusing on internet gaming including casino, sportsbook, and electronic sports events. It operates under the following brands: Dansk777, Hopa.com, Karamba, Griffon Casino, Scratch2Cash, and BetTarget. The company was founded by Aaron Speech (pictured above) in September, 2020 who is also the CEO. It is headquartered in Las Vegas, NV.
SiGMA News was assured that EBet’s operations are projected to continue seamlessly, without any interruption, right up to the auction date. The primary objective of this auction process is to close a sale immediately at the auction, thereby ensuring the continuity of business operations without any changes or interruptions thereafter.
What this means for EBet, the corporation
Assuming a successful closing at the auction sale, EBet, Inc. will no longer hold or control any assets of substantial value. This implies that the corporate operations of EBet, Inc. are likely to cease.
According to EBet, the auction is a strategic move to sell its assets and certain subsidiary equity as a collective, ensuring the continuation of business operations under new ownership. Despite the cessation of EBet, Inc.’s corporate functions, the business operations are expected to continue seamlessly. This auction signifies a change in ownership, not a disruption of business operations.
The anticipated outcome of the pending auction is the continuation of business operations under new ownership. This means that the new owner will replace EBet, Inc. Therefore, any operations following the auction will occur independently and separately from EBet, Inc.
In essence, this auction is a strategic manoeuvre aimed at ensuring the continuity and stability of the business operations while transitioning the ownership from EBet, Inc. to a new entity. It’s a process designed to facilitate a smooth transition, ensuring that the business continues to operate effectively and efficiently under new ownership. This auction is not an end, but rather a new beginning for the business operations, marking a new chapter in its journey.
Bankruptcy – Chapter 7 or Chapter 11 ?
The route that Ebet has chosen is a more efficient alternative to any bankruptcy. Chapter 11 bankruptcies are typically expensive, take many months to finalize and are uncertain in terms of outcomes. While Chapter 7 bankruptcies typically lead to the cessation of business operations, the situation is different in this case. “Here, we’re dealing with an Article 9 process. This process is characterized by a swift timeline and is under the control of our Lender,” said EBet, further explaining that the anticipated outcome will be a smooth transition around 1 August, 2024, with minimal disruptions or alterations to the business operations to ensure continuity of the business during the change in ownership
The auction that EBet, Inc. is holding is not a fragmented sale of inactive or disparate segments of the company’s assets. Instead, it involves the sale of a collective of the company’s assets and certain subsidiary equity. These components together constitute the company’s business operations. The aim is to sell these as an ongoing business concern, ensuring the continuity of operations.
Upon the successful closing of the auction sale, EBet, Inc., as a corporation, will no longer hold or control any assets of significant value. This is due to the sale of its assets. Consequently, the corporate functions of EBet, Inc. are likely to cease. However, this does not imply a cessation of the business operations.
The current business operations, particularly those involving the company’s sites, are expected to continue without interruption. This continuity is anticipated despite the change in ownership. The new ownership will replace EBet, Inc., ensuring the smooth transition and uninterrupted operation of the business.
Tracing the path leading to the auction, a historical perspective
On 1 July, 2024, a public announcement was made by Hilco Streambank regarding the auction of certain assets associated with EBet, Inc. The auction is scheduled to take place on 1 August, 2024. The assets up for auction include the equity and business operations housed within EBET’s subsidiary, Karamba Limited. This notably includes several websites such as karamba.com, generationvip.com, hopa.com, scratch2cash.com, griffoncasino.com, bettarget.com, and dansk777.com.
The auction is being conducted by EBet’s lender, with whom the company has cooperated to the extent required under the defined Loan Agreements. The auction is the culmination of a series of events that began with the extension of waivers of defaults and forbearance agreements in connection with funds loaned to EBET under the Loan Agreements by their senior secured lender, CPBF Lending, LLC.
After many months of extensions, the lender decided to commence an orderly foreclosure on EBet’s assets. This decision came after 17 June, 2024, when EBET exhausted the last forbearance period with the lender. The foreclosure process is being carried out through an Article 9 sale, a statutory procedure under the Uniform Commercial Code in the United States. This procedure allows a creditor to foreclose on a borrower’s loan default, take control of the borrower’s collateral assets, and sell them. The creditor can also use its debt as credit to bid for and purchase collateral assets.
The Article 9 process is more efficient and less costly than bankruptcy and occurs on a much faster timeline. The auction process does not intend to shut down EBET’s websites or cease its i-gaming business operations. Instead, the real value of EBet’s assets lies in the continuous operation of its sites. EBET has sufficient liquidity to continue operations through the pending auction date. All of EBets gaming websites will continue to operate without change, and player deposits and withdrawals will be taken and made in the ordinary course up to the sale.
The objective of the sale, as positioned by EBet’s lender and its advisors, is to ensure a seamless transition occurs on or about 1 August, 2024, without any disruption of operations after that. This marks a major transition for EBet, Inc., but one that is designed to ensure the continuity and stability of its operations.
SiGMA East Europe Summit powered by Soft2Bet, will take place in Budapest from 2-4 September 2024.
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