A lawsuit has been filed in a Canadian court against the Cake Poker Network alleging that the current owners did not fairly compensate the people who say they were the “brains” behind its creation.
In the lawsuit filed in the Supreme Court of British Columbia on April 5th, two men – Ryan Bennett and Francois Piette – accuse Cake Poker of a laundry list of complaints. Included in that list are breach of contract, fraudulent and negligent misrepresentation, and conspiracy. Bennett and Piette are seeking compensation for an agreement that was first laid out in 2004.
According to court documents and PokerScout.com, Bennett and Piette formed a company called Legacy Entertainment, which was promoting a plan developed by the duo called the Legacy Project. The Legacy Project would form an online poker operation that, according to statements by the duo, would be revolutionary in the industry. After two years of development, Bennett met Nicholaos Mellios, who is listed as a defendant in the court action.
Mellios, the Director of Cake Poker, Yummy Interactive, Inc., and Yummy Interactive Canada, allegedly admitted to Bennett that Yummy needed a new business “project.” After several months of e-mail correspondence, Bennett and Piette, in May 2004, presented the idea for the Legacy Project to Mellios and two other defendants, Christopher Ruck and Douglas Freese.
After this discussion, a deal allegedly was brokered, with Yummy Interactive holding an 80% interest in the new company, which would be called LegacyPoker.com. Legacy Entertainment held the remaining 20% stake.
Bennett and Piette allege that they had to teach the Yummy Interactive staff the “ins and outs” of poker, stating that people such as Mellios, Ruck, and Freese “had very little knowledge about both poker, generally, and online poker, specifically.” An Agreement in Principal was signed at the end of May and, by November 2004, Mellios allegedly told Bennett and Piette that the Legacy Project would be started as an offshore entity due to laws prohibiting British Columbia businesses from operating an online poker site.
Bennett and Piette allege that the business arrangement went off the tracks shortly after the November discussion. After a company called 711157 B. C. Ltd. was formed in December 2004, work continued on the project. By March 2005, however, Mellios allegedly bumped Bennett from the team after a personal disagreement. Approximately a year later, Piette was also eliminated from working on the Legacy Project.
Cake Poker went live in mid-2006 and Bennett and Piette state in their complaint that, while they have received “some” dividends, they feel they have not received the 20% that was agreed upon when the contract was first signed. Bennett and Piette also claim that Cake Poker is still using the Legacy Project in its multiple entities and, as such, they should be receiving compensation.
It could be some time before any other action is heard regarding the complaint. According to court documents, it can take anywhere from three to seven weeks for the defendants to respond to the complaint, depending on where the defendant is located. If the defendants fail to reply or issue a counterclaim, the British Columbia court can pronounce judgment.
Since its introduction in 2006, Cake Poker has become one of the largest poker operations in the industry. It encompasses 67 online poker rooms including Victory Poker, Phil Laak’s Unabomber Poker, and Only Poker. If the court decision goes against the defendants, it is possible that compensation could total tens of millions of dollars for Bennett and Piette for their 20% stake.