A federal judge in Nevada on Thursday denied a request by Australian-based gaming company PlayUp for a preliminary injunction against its former U.S. division CEO, whom PlayUp had claimed sabotaged a potential $450 million sale of the company.
The ruling came in a legal dispute in which the ex-CEO, Dr. Laila Mintas, has also sued PlayUp executives for alleged fraud for their filing of the lawsuit on Nov. 30.
A key factor is that an email in late November from cryptocurrency firm FTX, the would-be buyer of PlayUp, was not presented to the court by PlayUp when it made its initial claims of Mintas’ alleged efforts to disparage the company. U.S. District Court Judge Gloria Navarro initially granted a temporary restraining order in the case — but reached a different conclusion last week.
“The threat that was claimed by the plaintiff seemed very real at the time; and under the circumstances, the Court issued the order that was necessary,” the judge wrote in her ruling.
“But now we have more information. The plaintiff has failed to demonstrate that the defendant [Mintas] breached the non-disparagement provision under the employment agreement. … It was just as likely or more likely that the actions of Daniel Simic are the ones that caused the negotiations [with FTX] to cease irreparably.”
Navarro said that there was a lack of evidence that Mintas had made disparaging statements to FTX officials. The judge also focused on a letter from FTX to Playup global CEO Daniel Simic following a Nov. 15 meeting in The Bahamas.
The letter that turned the tide
In the Nov. 24 letter, FTX executive Ramnik Arora stressed, “The current US team has been incredibly important to getting the market access agreements. To our surprise, key personnel from the US business are not a part of the future plans of the business.
“There seems to be mistrust and lack of communication between the US and Global business. … Based on these concerns which were discussed in your visit we’ve decided against pursuing a full acquisition at this time.”
Those “concerns” included an effort by Simic to add $170 million to the proposed purchase price, covering the sale of a Simic-run company called PlayChip and $65 million in bonuses to “key personnel” including Simic.
The letter undercut Simic’s claim that the deal had failed because Mintas had met separately in The Bahamas with the same FTX executives and spoke negatively about PlayUp and Simic.
Instead, it appears that Simic’s decision not to renew the contract of Mintas — the company’s first U.S. employee hired two years ago — as it was about to expire on Nov. 30 factored into FTX getting cold feet.
Navarro wrote in her ruling that the FTX email to Simic “was definitely relevant to the issue at hand and does certainly place things in a much different light.”
The counterclaim details
In Mintas’ counterclaim, her attorney writes: “After submitting affidavits to this Court containing false and perjurious statements and intentionally withholding from this Court two key emails disproving their representations, PlayUp received the ex parte temporary restraining order.
“Thereafter, after receiving counter-evidence, the Court denied PlayUp Inc.’s motion for preliminary injunction, finding that PlayUp Inc. would not likely succeed on the merits.”
Mintas is a 15-year veteran of the U.S. gaming industry, a frequent panelist in national industry conferences, and was named one of 25 “Executives to Watch” in 2019 by the Global Gaming Business trade magazine.
But as negotiations got underway in November, Mintas was informed of Simic’s bid to renegotiate the preliminary terms of the deal with FTX. She emphatically objected and, by all accounts, bad blood ensued.
Mintas sought to double her salary from $500,000 to $1 million upon signing a new contract, but instead PlayUp sued her on Nov. 30, the day that her contract expired.
A claim of attempted intimidation
In the counterclaim, Mintas’ attorney wrote: “PlayUp Inc. commenced this lawsuit and sought an ex parte temporary restraining order against Dr. Mintas not for the purpose of resolving a legitimate legal dispute but to use Dr. Mintas as the public scapegoat for the failed FTX deal in front of their shareholders.
“PlayUp Inc. is continuing to try to intimidate Dr. Mintas, spreading false statements to others within the industry. … PlayUp Inc. sought to frame Dr. Mintas in a desperate attempt to avoid a lawsuit by the shareholders.
“This abuse of process has caused Dr. Mintas irreparable harm and damages, including, but not limited to, harm to her reputation, loss of income, devaluation of her shares, among other damages. As a direct and proximate result of the acts and omissions of PlayUp Inc., Dr. Mintas has suffered and will continue to suffer direct, incidental, and consequential damages in an amount to be proven at trial.
“In committing the acts herein above alleged, PlayUp Inc. is guilty of perjury, oppression, fraud, and malice towards Dr. Mintas. Therefore, in addition to general damages, Dr. Mintas is entitled to recover punitive damages from PlayUp Inc. for the purpose of deterring it and others similarly situated from engaging in like conduct in the future.”
Mintas’ attorney compared the case to that of Jussie Smollett, an actor who was convicted last month for having made false claims about being assaulted in Chicago.
“And, just like Smollett, this Court has already realized [Simic’s] story is false,” Mintas’ attorney concluded.
PlayUp offers legal sports betting in New Jersey and Colorado and, prior to the lawsuit, was said to be seeking regulatory approval in several other U.S. states.