Tsoukernik vs. Kirk: A Witness Account of the $2M Poker Lawsuit Clash
The lawsuit that began with a "friendly" heads-up battle for millions of dollars in the middle of the night on May 27, 2017 between King's Casino owner Leon Tsoukernik and Australian high-stakes poker player Matt Kirk has taken some interesting turns, with the ARIA Resort and Casino being implicated in the latest counterclaim from Tsoukernik.
The heads-up game took place primarily in the early morning hours of May 27, a day before the start of the ARIA Super High Roller Bowl, which would be followed by the annual World Series of Poker starting May 31. According to the initial suit filed by Kirk, he had lost a poker match to Tsoukernik a day earlier that resulted in Kirk paying Tsoukernik $1.5 million. This was included in the case to establish a relationship of good will between the two players.
In the now-famed heads-up rematch, it has been alleged that Tsoukernik was intoxicated during the game and proceeded to borrow $3 million from Kirk, all of which he lost to Kirk during the match. Of the $3 million loan, only $1 million was paid back to Kirk (on June 3). Kirk filed a lawsuit against Tsoukernik on June 5 for the remaining $2 million, and after a court ruled a split decision on that case, Tsoukernik struck back last week with a countersuit against Kirk and Aria. But that is only part of the story...
Over the weekend, Rob Yong, the owner of the Dusk till Dawn poker club in Nottingham, England, offered his own witness account of the ordeal between Tsoukernik and Kirk. Yong was involved in brokering a deal between Kirk and Tsoukernik hours after the game concluded that involved an agreement for Tsoukernik to repay the $3 million loan at a discounted rate. Yong shared his story in a blog post published on Sunday, Nov. 12 in an effort to resolve any inaccuracies that have surfaced regarding his involvement in brokering a deal, and to "tell the poker community the stone cold facts."
But before we get into Yong's facts, let's go over what we know so far.
The Initial Suit
Matt Kirk's lawyers filed a civil complaint against Tsoukernik in June and a Summons was issued, demanding a response from Tsoukernik. The complaint stated that Tsoukernik made "a partial payment of $1,000,000 on June 3, 2017" and Kirk was suing for the remaining $2 million, plus interest, attorneys fees and cost of suit.
The Claims
Eight of the ten counts in the suit were listed as "breach of contract" or "breach of implied covenant of good faith and fair dealing" in regard to Tsoukernik for the varying loan amounts that Kirk doled out to Tsoukernik during the course of the heads-up match at ARIA.
The final two counts included "fraudulent inducement" and "unjust enrichment" as to Tsoukernik.
The fraudulent inducement claim indicates that Tsoukernik entered into the agreement with fraud or malice, not intending to repay the loan in the case of losing the money in the poker game.
According to the court document, Tsoukernik represented to Kirk "that he would repay the loans at the conclusion of the poker game on May 27, 2017" and that prior to each of the four loans, Tsoukernik "expressly requested the loan and expressly represented that he would repay [Kirk] when the poker game concluded," but then refused to pay back the loan after the game.
The documents cite evidence that shows "recording of the debt" in the form of text messages between Kirk and Tsoukernik that documented the loans as well as surveillance video that shows the exchanges. Kirk's lawyers, Richard Schonfeld and David Chesnoff, also obtained unreleased video surveillance of the game and noted that at least two other people were at the table when the exchange took place.
The count then states that Kirk "relied upon the representations made by [Tsoukernik] in providing him with $3,000,000" and "[Tsoukernik] intended that [Kirk] would rely upon those representations; however, [Tsoukernik] knew that the representations were false at the time that they were made. [Tsoukernik] did not intend to repay [Kirk] in the event that [Tsoukernik] lost in the poker game. [Tsoukernik] did in fact lose in the poker game and has refused to repay the loans in full."
Twelve minutes after confirming receipt of the entire $3 million loan with an "OK" response, Tsoukernik wrote "Not valid." Then, two minutes after that, he sent a message that said, "0 now."
Kirk's lawyers cite the text message exchange as evidence of fraudulent inducement and expressed in the complaint that Tsoukernik's "conduct was undertaken with oppression, fraud, or malice, and [Kirk] is entitled to an award of exemplary damages."
The unjust enrichment count against Tsoukernik states that by paying only $1 million of the $3 million owed to Kirk, Tsoukernik "has not lived up to his end of the bargain."
It further states, "The fact that [Tsoukernik] has had [Kirk]'s funds without the intent to repay the loans in full, results in inequity and confers a benefit upon [Tsoukernik] that [Tsoukernik] is not entitled to.
"As a result of the forgoing, Defendant Leon Tsoukernik, has been unjustly enriched, to the detriment of [Kirk]."
Tsoukernik argued that he did not have to repay the remaining $2 million as it was "an unenforceable gambling debt."
A Split Decision
The court's decision, which was released to the public less than a week before the start of WSOP Europe at Tsoukernik's casino in Rozvadov, Czech Republic, was divided.
The first eight claims were indeed thrown out by District Judge Linda Marie Bell on the grounds cited by Tsoukernik, ruling that gambling debts are not unenforceable and "whether in the form of casino chips, cash, or gold bars, Mr. Tsoukernik received a loan for wagering against Mr. Kirk."
Bell did, however, decide that Kirk could still pursue the money he believes Tsoukernik to owe him, along with punitive damages, based on the "fraudulent inducement" and "unjust enrichment" accusations.
"Tsoukernik entered into the contract intending to use its unenforceability to refuse repayment. If proven, this could place Mr. Tsoukernik at the greatest moral fault in this matter."
The Las Vegas Review-Journal included a statement from one of Kirk's lawyers, Schonfeld, who said after the ruling, "We're pleased with the court's ruling that we are able to maintain our lawsuit and seek damages from the defendant."
Tsoukernik's Counterclaim
On Nov. 8, Tsoukernik went on the offensive, filing a counterclaim against Kirk and the ARIA Resort & Casino.
In a statement the day after the filing, Tsoukernik said, "Before any legal pleading was filed, I chose to resolve this matter amicably, with the help of several of the most respected members of the poker community. But, as a result of the behaviour of Matthew Kirk and the third-party defendant, I was taken advantage of and can no longer remain silent."
In the claim, Tsoukernik faults the Aria staff for essentially over-serving him during the game resulting in Tsoukernik being so drunk that he was unable to count his chips, needing the assistance of Kirk and the dealer to do so. He also claimed that he misread his hand on many occasions, all of these factors "rendering the game unfair, dishonest and non-competitive."
Enter Rob Yong
For the rest of the story, we have to go back to the day of the game.
According to Yong in his blog, Kirk told him that day at Liquid that the heads-up game originally broke with Leon owing Kirk $2 million. Kirk explained that the two talked at the Aria elevator on the way to their room and they decided to go back to Ivey's Room to continue playing, at which time Leon borrowed another $1 million and proceeded to lose that back to Kirk. Kirk expressed regret for lending Tsoukernik the money while Tsoukernik was in a drunken state, but told Yong that he did it because Tsoukernik expressed to Kirk that he wouldn't play him ever again if he stopped playing.
Yong wrote in his blog that he suggested to Kirk that if he feels bad, he could offer a small discount to Tsoukernik as a "goodwill gesture." When Kirk asked Yong for a suggested discount, Yong proposed "$2M cash and play heads-up for the $1M loaned after 'the lift' as clearly the game should never have re-started with Leon in that state."
According to the court filing, "That afternoon of May 27 [Rob] Yong, Kirk and Tsoukernik met at the Liquid Pool at the Aria, where Kirk and Tsoukernik confirmed the discount, and Kirk shook hands with Tsoukernik confirming the settlement, in Yong's presence."
Yong confirmed in his blog post that he called Tsoukernik, who came to the pool where Yong explained the proposal. Tsoukernik agreed and Kirk and Tsoukernik proceeded to hug and shake hands on the deal.
Deal Gone Wrong
Yong then explained that Kirk called him over to the entrance of Liquid about 20 minutes later where he was on the phone with someone and told Yong, "There is no deal, Leon has to pay the full $3M." When Yong asked why, Kirk told him that the person on the phone said "no deal" and it was "out of his hands." Yong also wrote that Kirk passed him the phone but no one was there.
When Yong told Tsoukernik that the deal was off, Tsoukernik was clearly upset and responded, "This is ridiculous, you get me out of bed after 2 hours sleep, I don't remember anything but I agree to everything, I even offer to get the money brought here now, I shake hands and now you tell me this!" before leaving the pool.
Yong wrote in his blog that a couple days later while he was back in the UK, Kirk and Tsoukernik called him on speakerphone and asked him to witness a settlement.
According to the blog post, Tsoukernik told Yong, "Myself and Matt are here at the Rio Cage, we have agreed a settlement and we would like you to be a witness to it. I am giving Matt $1M and he accepts this as a full and final settlement for the game" to which Yong responded, "eh, $1M, are you serious! Matty, WTF." He confirmed that Kirk came on the speakerphone and said "Yes, it's fine, we are all settled, I want to move on" so Yong agreed that he witnessed it.
According to the court filing, a couple hours after the new settlement, Kirk phoned Yong, saying he "was going to destroy Tsoukernik." He told Yong he would "use the $1 million he had been paid to sue Tsoukernik" and put the story "in every poker magazine and website in the world."
This story was corroborated by Yong in his blog post where he wrote that Kirk skyped him the night of the $1 million settlement, telling him he would use the money to ruin Tsoukernik's reputation in the poker world. According to Yong, Kirk was upset that when the two sat down to discuss settlement of the debt, Tsoukernik spoke to Kirk like he was a child, and told him "This is a lesson for you, you shouldn't loan money to drunk people." When asked why he accepted $1 million, Kirk told Yong that "Leon proposed $1M and he was so mad with how Leon had spoken to him that he just took the $1M."
According to Yong, he received a message from Tsoukernik a couple days later about the court summons, and when Yong messaged Kirk about it, Kirk told Yong that his lawyer said he could no longer speak to Yong.
Yong mentioned that though he did not witness the match between Kirk and Tsoukernik, he had confirmation from persons present during the game that Tsoukernik indeed folded the winning hand at one point due to his inebriated condition. Yong wrote that he is "comfortable with the advice that I gave Matty at Liquid.
"I was not present while the game took place so all I could do was suggest a solution based on the facts presented to me with no bias towards either party and I would be happy to appear in court in Nevada and repeat this word for word under oath on behalf of either Matt's or Leon's attorney."
Tsoukernik Claims Unethical Practices on the Part of Aria
A couple shocking accusations from the court filing on Nov. 8 allege Aria-affiliated persons of wrongdoing. In the counterclaim, Tsoukernik alleges that the Aria or individuals connected to the casino were backing Kirk financially, claiming they "financed Kirk with Aria poker chips and other considerations and may have shared in any winnings of Kirk in poker games in the Ivey Room."
In addition to financial backing claims, the filing accuses Aria representatives of aiding the continuation of a game that perhaps should not have endured. "Several individuals in the Ivey Room recognised Tsoukernik's intoxication and attempted to help him leave the Ivey Room, but Aria and/or its agents, employees or representatives prohibited these individuals from assisting Tsoukernik."
In a statement by Tsoukernik about the counterclaim, he said: "I was taken advantage of and can no longer remain silent.
"As a casino operator, I feel it is my obligation to never allow a patron to be treated as I was and to alert the poker community of the risks they take in situations like mine. I believe that my response shines light on some of the unethical practices that target poker players. It would be easy to remain silent and make a business decision but too much has been said and too much damage has been done for me to keep quiet."
Tsoukernik is now putting his faith in the justice system.
"I have great confidence in the United States judicial system. I will allow the legal process to speak for me from this point forward."
This story is ongoing and PokerNews will continue to bring the latest as it develops.
