This is the second part of Bonus’s deep dive into PlayUp’s legal case against its former CEO, Dr. Laila Mintas. Read Part 1 here.
The ongoing battle between online gambling company PlayUp and its former US CEO, Dr. Laila Mintas, has hit a lull but may pick up again next week. PlayUp’s attorneys, Michael Popok and Amanda Brookhyser filed their latest motion against Mintas on August 8. Mintas has until August 20 to respond.
The Australia-based technology supplier, which is preparing to make its US online casino debut, continues to blame Mintas for scuttling a $450 million acquisition offer by the cryptocurrency exchange FTX. Mintas had raised concerns about the terms of the deal, which may have caused FTX to balk. At issue is whether she was in the wrong to do so or whether her concerns were valid and raised in the best interests of both FTX and PlayUp’s shareholders.
The two sides have been attacking each other in court since last November when PlayUp asked for a temporary restraining order against Mintas. That request was initially granted but then overturned by another court. Mintas has since launched a countersuit, claiming PlayUp ruined her reputation.
Our previous story looked at the externally visible aspects of the company’s history and the failed FTX deal. Perhaps even more important to the story, however, is what was happening inside the company simultaneously.
Contract Negotiations Gone Wrong
The relationship between Mintas and PlayUp – specifically between her and the company’s global CEO and cofounder Daniel Simic – appears to have taken a turn for the worse in the second half of 2021. That’s when FTX appeared on the scene. Around the same time, Mintas had begun asking Simic to renegotiate her contract.
US expansion had been going well during Mintas’s time with the company. That being the case, she was attempting to secure better compensation for her efforts.
A motion filed by Mintas in December 2021 states:
Based on objective market studies confirmed by headhunters and the fact that she created a valuation of at least an additional $400 million for PlayUp, she requested an increased salary from $500,000 to $1 million. Assuming she had approximately 10% in stock as she received 11% when she started and invested an additional $1.2 million, she was asking for an increase in shares to get topped up to 15% based on her overperformance without support from PlayUp Ltd.
Other earlier motions by Mintas claim that Simic essentially led her on. She says that, in the early going, he seemed willing to give her what she asked for. However, even Mintas presumably realized that Simic would need board approval before agreeing to any terms.
Messages from Simic to Mintas on October 25, 2021, read “lets do a joint board approval,” followed by “asap,” seemingly in response to her requests for a better deal.
Simic followed up with a brief text on November 8: “Yep. Let’s speak tomorrow about how we close it…”
Extra Payments in the FTX Deal
It all started to go wrong the following day, however. On November 9, Mintas says she became aware of various “extras” included in the FTX deal. These included $105 million for PlayChip, a company Mintas says she hadn’t heard of before. There was also another $65 million to secure “key” Australian staff, of which $25 million would go directly to Simic.
In Mintas’ first motion, she claimed that Ross Benson, a 10% shareholder in PlayUp Ltd., told her that he’d informed Simic before he met with FTX that he could not ask for $105 million for PlayChip because it would harm the PlayUp Ltd.’s shareholder’s interests.
When Mintas dug into PlayChip’s provenance, she discovered that the company – controlled by the same board members as PlayUp – had declared bankruptcy years earlier but somehow held a 5% stake in PlayUp.
Mintas claims that Simic gave her verbal assurances that he’d also negotiated $25 million for her. She says she challenged him on it verbally at the time, then put it in writing:
Why are you still talking about FTX? Those are two separate items. I don’t allow you to negotiate with them about me… If there is anything to negotiate about me and FTX, I will do it on my own.
Popok – one of PlayUp’s attorneys – claims that Mintas reached out to FTX at this point and began denouncing Simic. He speculates that she had even tried working out a deal for herself with FTX simultaneously.
A Fateful Meeting in the Bahamas
Whatever the case, neither side disputes that on November 6, FTX invited Mintas to the Bahamas to join Simic and Costa in negotiating with the company on behalf of PlayUp. On November 13, however, Costa emailed Mintas telling her it would be “inappropriate” for her to attend.
In her motions, Mintas says she then spoke to board member and PlayUp U.S. executive Dennis Drazin about the FTX deal. During this conversation, she says she questioned Simic and Costa’s integrity. Mintas says that Drazin told her to go to the FTX meeting anyway, though he has since signed an affidavit that he told her no such thing. Drazin, who had originally recruited Mintas for PlayUp, went on to replace her in December 2021.
In any event, Mintas flew down to the Bahamas but met only with FTX; she did not sit in on the meeting between FTX and Simic and Costa.
At some point, according to her motions, Mintas also learned the identities of eight “key employees” at PlayUp, who Simic told her deserved to be paid $1 million each. All worked in Australia, none for the company’s US division. One was Scott Simic, Daniel’s brother.
It’s unclear whether Mintas discovered the list before or after the Bahamas meeting. In an affidavit, however, Simic attested that: “The discussion about the PlayChip was abandoned before PlayUp met with FTX in the Bahamas.”
A Possible Power Struggle
Mintas remained in the Bahamas after FTX had concluded its meeting with Simic and Costa. That’s the point at which Popok claims that Mintas betrayed him and the company.
According to PlayUp’s legal team, Mintas spent that time with FTX continuing to undermine Simic’s reputation and attempting to persuade the crypto company that she – and not Simic – should lead PlayUp after the acquisition.
Shortly before filing his early August motion, Popok had this to say about Mintas:
Once the FTX deal fell through, she had the audacity to offer herself up as the fireman—she was the only one who could save the deal with FTX, because everyone at PlayUp was stupid and she was the one who’d built up the company. ‘I’m the only one who can bring FTX back to the table.’
Whatever happened during those discussions, FTX backed away from the deal and informed Mintas of that before Simic. According to Mintas’s filings, the reasons FTX gave her were:
- They’d wanted Mintas to stay as PlayUp’s CEO after the sale, but Simic had told them that Mintas’s contract had expired on November 30, and the company had already chosen a new CEO.
- They were skipping on the deal because it was too “messy.”
- They thought Simic was “dodgy.”
Mintas then met with PlayUp’s board, where she laid out everything FTX had told her. Simic denied it all.
An Email from FTX
Despite Simic’s objections, an email arrived from FTX cofounder Ramnik Arora shortly after that, addressed to PlayUp and its board.
(Mintas claims she only saw this email because Drazin shared it with her. She says he did this before being named CEO and giving his affidavit to Popok, in which he denied most of what Mintas has claimed.)
In the email, Arora lays out the company’s rationale, which has some similarities to Mintas’s version despite the differences in phrasing:
1. To our surprise, key personnel from the US business are not a part of the future plans of the business.
2. There seems to be mistrust and lack of communication between the US and Global business.
3. The Global leadership has conflicts of interest with other business activities, for example, PlayChip.
4. There is discontent within the team and the board on the valuations.
Popok’s take on that is:
So of course FTX bailed. What buyer wouldn’t after hearing all the lies Mintas was telling them. Even if they knew she was being entirely truthful, who’d want to buy into a company that’s still got someone like her to deal with.
On December 13, PlayUp and Popok initiated their legal action against Mintas.
A Villainous Portrait
As part of the case, Popok presented affidavits given by various PlayUp higher-ups: Simic, Costa, and the company’s attorney, Farshad Amirbeaggi.
These include numerous claims about Mintas’s behavior in late 2021. For instance, one reads:
On November 10, 2021, Mintas had two phone calls with Mr. Simic. In the first, she told him that unless PU Ltd. gave her all that she demanded in compensation and equity, she would ‘burn the company to the ground,’ and she demanded that Mr. Simic resign by December 1, 2021, or she would ‘contact everyone and make sure they don’t work with PlayUp.’
She also claimed that all of the Company’s regulatory gaming licenses were hers personally and that she would take them with her when she left. She ended the first call by telling Mr. Simic that she was ‘not negotiating any more’ and that he should just ‘make it happen.’ Later that same day, she informed Mr. Simic that she would “go out of her way” to ‘destroy PlayUp’ unless she was given what she wanted. She also claimed that Mr. Simic was “not smart enough” to know what Mintas was capable of.
Amirbeaggi claims that on a call with Mintas:
Mintas told the counselor that the firm would see the ‘real Laila Mintas’ very soon and then issued (reiterated) the following threats:
‘Simic doesn’t deserve to be involved [in the FTX deal] and either he is removed, and I am made the global CEO, or I’ll burn it all to the ground.’
‘I’ll contact all the regulators and tell them that the company is delinquent and can’t be trusted and is run by frauds and request that they undo the licensing.’
‘Farshad, like [in] the Italian gangster movies you know, I’m just cutting off and posting [mailing] you guys the fingers. Soon it will be the whole body. I’m just warming up.’
‘Do as I ask and get rid of Daniel or watch me burn PlayUp to the ground and make it bankrupt.’
PlayUp, via Amirbeaggi’s affidavit, even accuses Mintas’s husband of leveling his own threats at the company’s Australian leadership.
Legally, what’s at issue may not be so much what Mintas said to FTX. Each side’s arguments have more to do with why she said it and her legal obligations at the time.
Popok’s version is that Mintas had a contractual obligation not to disparage PlayUp, especially to potential buyers. He paints her decision to talk to PlayUp as personally motivated:
She could see the writing on the wall, so she started going after FTX—first by badmouthing PlayUp and everyone at PlayUp. Then by telling FTX that they can’t do the deal without her. That she owns all the licenses, she’s the one who brought in all of PlayUp’s customers.
All this time, she’s still a fiduciary, which means that she was bound by contract not to compete and certainly not to badmouth her own company and its management.
Mintas claims she didn’t intend to scuttle the FTX deal but felt ethically uneasy about it and wanted to provide some transparency. Her December 2021 motion states:
Dr. Mintas has not breached her fiduciary duties, her employment contract, or violated Nevada trade secret laws. Dr. Mintas attempted in vain to save the FTX deal for everyone’s benefit. . . . There is no basis to grant a preliminary injunction when it is PlayUp Inc. that breached its agreements with Dr. Mintas and PlayUp Ltd.’s other board members who breached their fiduciary duties.
He Said, She Can’t Say
So far, rulings in court have generally gone Mintas’s way. Judge Gloria Navarro denied the motion for a preliminary injunction in December 2021, stating that:
The defendant provides substantial evidence in her response to the preliminary injunction that her comments did not cause the sale to fail; and plaintiffs did not otherwise provide evidence that the defendant even likely made a disparaging comment to FTX. It was just as likely or more likely that the actions of Daniel Simic are the ones that caused the negotiations to cease irreparably.
The US Court of Appeals for the Ninth Circuit upheld that ruling in July.
Even so, Mintas still cannot speak on the record about PlayUp or the case. Her attorney Jennifer Braster wants her freed up to talk, find work, and give her side of the story.
For now, though, the conversation with the media is one-sided. PlayUp has been giving its version to anyone who will listen. Mintas can only respond in court filings. For instance, part of her December 2021 motion reads:
Simic attempts to paint a picture of Dr. Mintas as the irrational woman, stating in his affidavit, ‘I have found her to be quite irrational in her behavior.’ Dr. Mintas is quite rational and appropriately reacting to watching her two years of hard work and $1.2 million investment go up in flames due to Simic’s misconduct.
Regarding PlayUp’s efforts to silence her, she told Gaming America in January, after Judge Navarro’s ruling:
If someone tries to prevent you from speaking to the U.S. regulators, that says everything.