Macau’s Court of First Instance has declared the bankruptcy of VIP promoter Sang Lung Gaming Promotion Co Ltd, a company linked to VIP gambling investor Iao Kun Group Holding Co Ltd. The decision follows a request for bankruptcy made last year by Galaxy Casino Co Ltd – a subsidiary of Macau casino operator Galaxy Entertainment Group Ltd.
The court additionally said that Sang Lung creditors should make their claims within 45 days following the publication – on March 22 – of the court’s decision in Macau’s Official Gazette.
The court had in December summoned another company linked to Iao Kun – Sang Heng Gaming Promotion Co Ltd – to respond to a request for bankruptcy made by Galaxy Casino Co. No decision from the court has been made public so far regarding Sang Heng.
On September 15, Galaxy Entertainment said it had terminated agreements with Iao Kun for what the casino group alleged was a breach of contract by the VIP gambling sector investor.
The contract concerned two VIP rooms at, respectively, Galaxy Entertainment’s venues Galaxy Macau, on Cotai, and StarWorld Hotel on the Macau peninsula. Iao Kun had operated the rooms via its business partners.
The bankruptcy application against the two VIP promoters relates to a letter from the subsidiary of Galaxy Entertainment. According to information previously disclosed by Iao Kun, Galaxy Entertainment’s unit stated that the two VIP promoters had “defaulted” on obligations to repay lines of credit amounting to HKD312 million (US$40.2 million).
Nasdaq-listed Iao Kun said in a filing in December that the lines of credit for Sang Heng and Sang Lung were guaranteed by the group’s chairman, Lam Man Pou, and its chief executive, Vong Hon Kun.
Earlier this month, Iao Kun announced the resignation of Mr Lam and Mr Vong from their respective positions. Both are leaving the board but will remain with the firm. Mr Lam will serve as chief marketing officer, while Mr Vong becomes chief operating officer.
The changes to management and the company board were announced after Iao Kun said it had completed the acquisition of a software technology development company, as the junket investor tries to shift the company’s overall strategy away from gaming.
Iao Kun has since September shut down four of its five promoted Macau VIP rooms. The junket group now only promotes a single VIP room in Macau, located at City of Dreams Macau, a property run by casino operator Melco Crown Entertainment Ltd.
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Amount that each Macau casino operator paid for the circa six-month extension of their respective contract