Friday, August 11, 2006

Los Angeles-based television production company Bluemoon
Entertainment has withdrawn its lawsuit against online gaming operator Bodog.com due to the defendant's offshore status and lack of U.S. assets, both of which make it very unlikely that Bluemoon could collect any potential judgment in the U.S.

Filed last April in Los Angeles Superior Court, the case withdrawn today
involved several causes of action against Costa Rica-based Bodog, Bodog
Entertainment Group and CEO Calvin Ayre. It also named Costa Rican entity
Riptown Media, a marketing company based in Vancouver, Canada, that apparently serves only one client -- Bodog and its related companies. The complaint set forth causes of action for breach of contract, breach of confidence, and misappropriation of ideas in relation to a reality television series created by Bluemoon Entertainment.

"This case was not dismissed on the merits," said plaintiff attorney David
Beitchman of Beitchman & Zekian. "It is unfortunate that Bodog's 'judgment
proof' offshore status will preclude our client from pursuing what we believe is
a very strong case." Mr. Beitchman added that offshore companies that do
business in the U.S. but have no domestic assets can, if so desired, shield
themselves from U.S. civil court judgments.

Statements made by Bodog lawyer James Nguyen of Foley & Lardner in a news
release dated August 9th refer to the case as "frivolous" and "baseless." But a
detailed breakdown of the similarities between the Bodog and Bluemoon programs
proves otherwise (a breakdown is included in the lawsuit -- case #BC 350152).
The fact is that during a series of in-person meetings that occurred May-August
2005 with senior Bodog representatives, Bluemoon provided Bodog with complete
project disclosure, and submitted numerous proposal and development materials,
including project overviews and synopsis, episodic outlines, distribution and
marketing breakdowns, and production schedules with full budget analysis. Prior
to providing these details, Bodog representative Susan Mainzer entered into a
non-disclosure agreement on behalf of Bodog. It has been reported that prior to
Bluemoon's development of the original poker-themed reality series, Bodog's only
other foray into reality television involved a proposed but never produced
series in which women would compete to bear Mr. Ayer's child in exchange for a
$10 million prize.

"Bluemoon elected to dismiss this case because Bodog and Mr. Ayre have shielded themselves from U.S. civil as well as criminal law," said Bluemoon spokesperson Grace Williams. "Bodog's lawyers can spin the dismissal any way they choose in the press, but their PR efforts won't change the fact that Bodog deliberately maintains all of its assets outside the reach of U.S. civil court judgments. Even serving routine court papers, let alone trying to collect a judgment, was a challenge"

It has been reported on several online poker news sites that Mr. Ayre, whose
earlier legal problems involving insider stock trading in Canada are well
documented, is reportedly avoiding entry into the U.S. due to concern over the
Justice Department's crackdown on online gambling.

Evidence of Bodog's approach to the Bluemoon lawsuit began to surface shortly
after the lawsuit was filed. In a formal response to the Los Angeles Superior
Court on April 11, Bodog stated "We are planning to meet with the plaintiffs and
their counsel to attempt to resolve this matter without recourse to further
litigation." But as Interactive Gaming News reported on May 3rd, Bodog's
lawyers, led by James Nguyen of Foley & Lardner's Los Angeles office, informed
Bluemoon and its attorneys during a meeting that Mr. Ayre would make sure that
Bodog had no assets in the United States for the plaintiffs to collect. The
story went on to report that Bodog's lawyers warned the plaintiffs that if the
lawsuit was not withdrawn within 24 hours, Bodog would file a countersuit to
discourage future litigation (no such countersuit was filed).

"While Mr. Ayre's 'catch me if you can' statements regarding efforts to
criminalize online gaming have been widely publicized, people in the
entertainment industry are probably not aware that he has also positioned
himself, Bodog and all of the company's assets beyond U.S. civil judgments,"
added Williams. "This case should serve as a wake-up call to U.S. companies
considering doing business with such firms."