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Judge Orders Sanctions Against Fertittas In Xyience Case

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grappler0000

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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.

Xyience is a major sponsor of Ultimate Fighting Championship, which the Fertittas bought in 2001 for $2 million and quickly turned into a cash machine. The energy-drink company was founded by a twice-convicted felon and sales genius named Russell Pike, who raised millions of dollars from Midwest labor unions and other investors who later accused him of fraud. The Fertitta brothers also control Station Casinos, which emerged from bankruptcy in 2009.

In an Oct. 28 order, U.S. Bankruptcy Judge Lloyd King held that William Bullard, the chief financial officer of Fertitta Enterprises and a manager of Xyience, failed to comply with discovery requests for documents related to the company’s bankruptcy. Bullard said e-mails had been destroyed, yet he was obligated to keep them since he knew the loan deal might spawn litigation and trigger rules requiring the retention of all relevant documents. (At a November 2007 Xyience board meeting, before the loan was made, he refused to serve as a director because of threatened shareholder litigation.)

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...



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Post #1   11/3/11 3:06:53PM   

matt_black

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Something sneaky and underhanded happening to make a profit in the business world....I dont believe it...

Post #2   11/3/11 5:00:37PM   

bojangalz

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On a side note... I love me some Cherry Lime Xyenergy. Easily the best tasting energy drink I've ever had. A gas station had them on sale last month 2 for $3. I cleaned out their shelves and took 24 of them home with me the other night.

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Post #3   11/3/11 7:33:57PM   

prophecy033

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Posted by bojangalz

On a side note... I love me some Cherry Lime Xyenergy. Easily the best tasting energy drink I've ever had. A gas station had them on sale last month 2 for $3. I cleaned out their shelves and took 24 of them home with me the other night.

damn, have you slept since Bo?

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Post #4   11/3/11 7:37:15PM   

bojangalz

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I haven't even broken into them yet... Only use them when I'm short sleep jumping shifts/jobs. They should last me a couple of months. Just gotta take advantage of the prices when they are that good.

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And as El Guapo always says- "God speed, and party on. Whoap!"

Post #5   11/3/11 8:24:56PM   

ncordless

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Nailed 'em on email destruction. Will probably cost 'em more to pay the lawyers that lost than the sanctions themselves.

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Flame Not, Lest Ye Be Flamed Yourself.

Post #6   11/3/11 8:33:50PM