Chris Moneymaker bankrupt ?

[Buck 65]

I was in veags, on a turn-around trip, with my dad. I went off to play some 3/6 at the Mirage. At the table the convo mentions WSOP and Moneymaker, which often happens at one point at any table, I've noticed. Well, somebody there said that he went bankrupt, the dealer at our table seconded to hearing this. I wasn't sure what to believe. I mean, the guy is an acountant, how could that be?
Is there any merit to this rumor?

65_Buick

[Toro]

I'm no accountant and wouldn't know the first thing about how to go about this, but wouldn't declaring bankruptcy be a great way to shelter 2.8 million dollars.

[Kurn, son of Mogh]

Don't quit your day job. In bankruptcy, the first thing the court does is to liquidate certain assets to pay off liabilities. His winnings (less taxes and the amount owed to those who staked him) are an asset. The court would order his debts paid off with those assets.

It's pretty hard to say you're bankrupt when you have enough cash on hand to cover your debt service.

[Toro]

I'm a registered engineer and I just see so often these big land developers declaring bankruptcy all the time but seem to able to maintain the high lifestyle with the big mansions, luxury cars, yachts etc.

I would never quit my day job, I'm just a working stiff who wonders how they do it.

[Wingnut]

It probably has to do with how they incorporated their business in order to shield their personal assets. I don't know the details, but I believe things like S-Corps and LLCs and LPs make sure that the only thing at risk to an individual is what he/she invested in the company, and personal holdings are not assets of the company.

[scrub]

Sounds about right. Nice work if you can get it...

scrub

[CrackerZack]

If he's bankrupt he sure blew threw that 200K he just won for the WPT tourney in SF real fast. I highly doubt this, just more sour grapes. Probably came from Russ G. in some ridiculous rant.

[midas]

It might be possible that he is bankrupt, let's consider the following things:

1. It has been rumored that he had some gambing issues prior to his WSOP win - gamblers often file for bankruptcy.

2. Also via table talk, that he had backers (a 3 way split) for his WSOP win - why would you need backers if it only cost you $40 to enter - he is bankrupt and couldn't scrape together the airfare and living expenses to get to Vegas.

More smoke for the fire - who cares - little guys go bankrupt and big guys like Donald Trump get propped-up by banks and live to have their own TV show!!

Only in America.

[B Dids]

Moneymaker didn't quit HIS day job, so unless he's got crazy gambling depts, I doubt he's bankrupt.

[Kurn, son of Mogh]

What you're seeing is the difference between corporate & personal bankruptcy. The assets you're seeing may be held by the entity that isn't declaring bankruptcy. Moneymaker is an employee in his job, so I doubt he can hide assets behind the corporate veil, or declare his business bankrupt, and hold onto his personal assets.

[AJo Go All In]

[ QUOTE ]
. Also via table talk, that he had backers (a 3 way split) for his WSOP win - why would you need backers if it only cost you $40 to enter

[/ QUOTE ]

well didn't see if anyone answered this already, but this is a pretty easy one. to lock up a nice 10K (or whatever) profit, when chances were he wouldn't make the money.

[Ray Zee]

i suspect they are confusing bankruptcy with being broke. two different things. and i doubt if he is broke yet.

[Gamblor]

Any idiot can start a firm in anything he's willing to go get educated in. Scrub, all it takes is a few years of school.

And the Commerce student gets to flex his muscles:

LLP = Limited liability partnership. Ownership is limited to a small group of "partners". Basically, if someone sues the pants off you, you're only liable for what you've invested in the firm. When you've been working at a firm a while and the big boys like what they see in you, and you've been saving salary, they give you a chance to invest in the firm, becoming a "partner".

In practice, LLP partners pay themselves a salary out of the profits every month and that money is protected because it becomes "personal", not "parnership" money. The salary is negotiated among the partnership, and is based on a division of profits of the firm. The partners salaries are almost never arbitrary, and are standardized depending on length of service, investment, etc. etc. To the extent that the partner has invested in the ownership of the firm, all firm-owned assets are all "live", and the partner is required to forfeit his stake in the firm if it goes bankrupt.

Therefore, if someone sues the pants off the firm (and Pamela Anderson wouldn't even need to sue me), only the firm's assets and the partners' investments are available for collection.

[midas]

Let's think about that logic - MM ("dead money") sells shares in his potential winnings - $0. Smart move by MM. Investors buy shares in MM who would be a million to one longshot to win. Dumb investment strategy that luckily paid off well - with that type of luck - they should have invested in lottery tickets for a better pay off.

Look for the MM movie, books and instructional tapes!!

[mosch]

To quote a Las Vegas Sun article about Moneymaker's use of the money:
[ QUOTE ]
He used the prize money to buy a Toyota Land Cruiser for Kelly and a BMW for himself and to pay off their mortgage and other bills. After giving his father and two friends their portion, totaling about $1 million, most of the rest went into a college fund for his daughter. A small amount also went into his online gambling account.


[/ QUOTE ]

I'm thinking the story is sour grapes.

[Pipedream]

Nice use of the word 'yet' at the end of the sentence Ray. /images/graemlins/grin.gif

Pipedream

[jedi]

[ QUOTE ]

2. Also via table talk, that he had backers (a 3 way split) for his WSOP win - why would you need backers if it only cost you $40 to enter - he is bankrupt and couldn't scrape together the airfare and living expenses to get to Vegas.


[/ QUOTE ]

The story about people backing Moneymaker is that he was going to use that money to play in some satellite tournaments to gain experience in live play. The backers would take a cut of anything he won over the course of the weekend (satellites + main event), so it was a good move on MM's part, and it turned out to be a great move on the backer's part. I think the backers were mostly his dad and close friends and relatives.

[Oski]

[ QUOTE ]
Any idiot can start a firm in anything he's willing to go get educated in. Scrub, all it takes is a few years of school.

And the Commerce student gets to flex his muscles:

LLP = Limited liability partnership. Ownership is limited to a small group of "partners". Basically, if someone sues the pants off you, you're only liable for what you've invested in the firm. When you've been working at a firm a while and the big boys like what they see in you, and you've been saving salary, they give you a chance to invest in the firm, becoming a "partner".

In practice, LLP partners pay themselves a salary out of the profits every month and that money is protected because it becomes "personal", not "parnership" money. The salary is negotiated among the partnership, and is based on a division of profits of the firm. The partners salaries are almost never arbitrary, and are standardized depending on length of service, investment, etc. etc. To the extent that the partner has invested in the ownership of the firm, all firm-owned assets are all "live", and the partner is required to forfeit his stake in the firm if it goes bankrupt.

Therefore, if someone sues the pants off the firm (and Pamela Anderson wouldn't even need to sue me), only the firm's assets and the partners' investments are available for collection.

[/ QUOTE ]

Well, to further your statement about "in practice" depending on the entity's credit standing, the principal is often required to personally guarantee most substantial loans, leases, etc. (Your statement is about closely held entities, whether corporate or non-corporate).

Furthermore, even though one may avail oneself of corporate protections, the veil may be "pierced" if the principal did not run his corporation as a true, seperate entity from the principal. One such factor is whether assets are commingled. Where the veil is pierced, creditors (judgment, or otherwise) can pursue you individually.

So, most "idiots" as you have put it, would often find themselves on the hook for liabilities assumed to be of the business entity. Not as easy as it looks...

[WDC]

I heard he sold a piece of himself to his Dad and a friend who payed his airfare, room and board.

BTW I tried to check bankruptcy court filings in Tenessee but did not find a filing.

[Ray Zee]

true oski but in practice it is not easy and very costly to get a judgement throught the corporate veil. you have to have alot of assets and most people that do, act like a corporation.

[Oski]

[ QUOTE ]
true oski but in practice it is not easy and very costly to get a judgement throught the corporate veil. you have to have alot of assets and most people that do, act like a corporation.

[/ QUOTE ]

Ray, there is a distinct difference between piercing the veil of a fortune 500 company vs. that of a closely-held, "family" business. The "any idiot who goes to college" comment, means we are talking specifically about that type of business. When you are a principal of such type of business, you will be required to personally guarantee most of the company's liabilities until it can be proven viable.

In my profession I see people trying to hide assets behind the corporate structure very often. Very often, they do not follow corporate formalities and it is no problem to "get them," personally - especially when intentional torts are involved. Even where the company is gutted out in BK, you just step right around it and go right for the principal. (Its somewhat easier when a BK is involved because you involve the trustee who can "recapture" assets for you).

Of course, when you step up in class to a corporation that is run like a corporation for the sake of the corporation - you have a different animal. In such case, you are indeed correct: only in rare cases is it even possible to pierce (legally) and the standard of proof is usually hard to reach.

[scrub]

I was pretty much joking around with the "nice work if you can get it" line. Hell, isn't starting up a company, having it go bust and leaving creditors and investors holding the bag the new American Dream?

God knows I'm going to give a shot someday. Well, at least the whole starting a company part...

scrub

[jayadd]

i think the real american dream is to win a million dollars or more and be bankrupt in less than a year. Isnt varkoni bankrupt also. I heard that young girl from georgia who hit the mega million is also bankrupt. Geeze who cares unless they lose it to me at my table. And there was a time varkoni did here in NY ahhh the diamond club good old days.

[Wingnut]

[ QUOTE ]
Let's think about that logic - MM ("dead money") sells shares in his potential winnings - $0. Smart move by MM. Investors buy shares in MM who would be a million to one longshot to win. Dumb investment strategy that luckily paid off well - with that type of luck - they should have invested in lottery tickets for a better pay off.

[/ QUOTE ]

I think you just adapted "The Producers" for the poker world. I smell another dozen Tonys!! /images/graemlins/smile.gif

[ohkanada]

Read this article. Chris is even amazed on what he has heard what he lost.

http://www.sptimes.com/2004/02/22/Sports/Moneymaker_has_lived_.shtml

Ken POklitar

[CrackerZack]

Good article.

People are so obnoxious. People actually tell him how lucky he was... real classy. Congratulate the guy and move on. If you think he was the luckiest SOB on the earth, why would you even stop to say hi to him. He's so much more polite than I could ever be. If I won and someone came up to me to tell me how lucky I was, I'd probably respond with something like, "Yeah, I know. Its great. If you were this lucky you could get your skank mom out of the rundown retirement home you dumped her and get your whore sister off the crack pipe. After that, you'd probably have some left to pay off your deadbeat alimony to you wife and your best friend's kids. You're right, I am lucky." Alas, I didn't win and I'm not witty.

[scotnt73]

lol. but would you really be able to think of that quickly or would you say "thanks" and think of all that later. /images/graemlins/grin.gif

if i won they would really have to give me some good money not to change my handle to another one or else id have to play with my chat off which im sure he does. hes placed in one more big one so now i figure people will cut him a little more slack. i looks like hes going to be around a long while.

[toots]

I continue to be amazed by the degree to which people feel that they have to dismiss his achievements and/or discount his abilities.

In wondering why people get so defensive over CM:

1) Are they sore that they didn't win?
2) Does it threaten their image of poker to think that someone could learn the game relatively quickly, or at least fast enough to "come out of nowhere"?
3) Does it threaten their image of poker to think that a relative novice could win, based on things like luck or naked aggression (thus trivializing NLHE)?

In a way, I find a lot of parallels between Moneymaker bashing and all the controversy over poker bots, although I confess to having much warmer feelings toward Moneymaker than some third-rate software.

[M.B.E.]

[ QUOTE ]
BTW I tried to check bankruptcy court filings in Tenessee but did not find a filing.

[/ QUOTE ]
Really? How could that be when the information that he's bankrupt comes from such a reliable source. You'd better pore over those bankruptcy filings again, you probably just overlooked it. Those 3/6 players at the Mirage have never been wrong before, as far as I know. And don't forget, the dealer seconded it.

[Lee Jones]

Really? How could that be when the information that he's bankrupt comes from such a reliable source. You'd better pore over those bankruptcy filings again, you probably just overlooked it. Those 3/6 players at the Mirage have never been wrong before, as far as I know. And don't forget, the dealer seconded it.

Best post of the thread, by far.

Regards, Lee

[wayabvpar]

According to Chris himself, he isn't anywhere near broke- linky (http://www.sptimes.com/2004/02/22/Sports/Moneymaker_has_lived_.shtml).

[krazyace5]

[ QUOTE ]
I heard he sold a piece of himself to his Dad and a friend who payed his airfare, room and board.

BTW I tried to check bankruptcy court filings in Tenessee but did not find a filing.



[/ QUOTE ]

Come on, Poker Stars would have covered his airfare, room and board. The other conclusion about practicing some satellites is more realistic.

[MCS]

From the linked article:

"Sometimes it gets old. I just accept it most of the time," Moneymaker said. "A lot of times people just say how lucky I was. . . . How do you respond to that?

"I really don't care. Some think I'm pretty good, others think I'm really bad. I haven't gone around and asked. I won the tournament, I won the money, think what you want."

Pretty much says it all.

[MicroBob]

yeah....i thought stars covered room and airfare for the wsop events. i know they do on some of their promotions so i am assuming moneymaker also didnm't have to pay his own way.

if i won my way there (rather unlikely to happen since i don't play too many of those satellite thingees) i would DEFINATELY sell shares of my stake to my Dad and others.
i would love to play in the WSOP....but also wouldn't mind having 10k.
getting to play in the wsop AND getting to keep 5K of it is the best of both worlds, even if i did happen to be fortunate enough to have any prize-money cut in half.


the question is, would you be interested in playing in the WSOP for 1/2 the entry-fee and 1/2 the prize-money?? some would while others would not.

[jayadd]

that was a great link..... nice article.....

[jayadd]

btw in the article he said he heard he lost 2 million in mohegan sun, going to start a new rumor NO poker there so it must of been in the slots. Saw him at the $100 slots $100,000 in 15min. Then he picked up the first 2 rounds at the wolf den.......
i think the only thing i feel bad for him is that he's 28 and married with a kid.......

[cero_z]