Oh, how the wheels of justice roll slowly. If it feels like we’ve been covering the Xyience takeover story for years, it’s because we have. This story goes all the way back to 2007 when a blogger named Rich Bergeron got sued for claiming Xyience was under investigation for fraud and all sorts of other crap.
Unfortunately for Xyience, they picked the wrong guy to try and bully. Rich spent the next few years investigating the shit out of Xyience and laid out evidence that the Fertittas set Xyience up to fail so they could take the company over. And finally, years later, we’re starting to hear the same story being told in court. Forbes has an article on the current situation:
A federal bankruptcy judge has ordered sanctions against Fertitta Enterprises for failing to turn over e-mails from its chief financial officer suggesting the firm might have had a hand in the bankruptcy of sport-drink maker Xyience. The Fertittas, Las Vegas gambling tycoons who also own the Ultimate Fighting Championship franchise, are accused by the trustee of bankrupt Xyience of lending the firm $12 million at a time of crisis and then using the loan to strip the company’s assets from its shareholders.
E-mails were later found on computers at a Las Vegas beer company where Bullard also works. They detailed how Fertitta proceeded with the loan even though there was a potential $150 million buyout offer from Canada’s Cott Corp. Judge King said Fertitta’s “wilful, bad-faith discovery behavior justifies the imposition of monetary sanctions” to be determined at a December hearing.
Now this is just sanctions for attempting to hide the sketchy stuff they did. It will be interesting to see what former Xyience stockholders – who were left high and dry – will be able to get out of this case now that we’ve learned about this buyout from Cott. I have no idea how crap works in court but that seems like it could be the smoking gun that proves the people running Xyience willfully ran the company into the ground so the Fertittas could take it over.