The CEO of Las Vegas-based casino supplier Galaxy Gaming Inc. today accused Bank of America of “bullying tactics” that have caused unnecessary scrutiny by gaming regulators, and he reported that Galaxy is countersuing the bank in a dispute over a $1.1 million loan.
B of A last month filed suit in Clark County District Court charging that in 2007, when it made the loan to an entity called Galaxy Gaming LLC, false statements were made about the ownership of the limited liability company and that the bank was later victimized by an allegedly fraudulent transfer of assets from Galaxy Gaming LLC to Galaxy Gaming Inc.
The bank lawsuit is against Galaxy Gaming Inc. and a trust benefiting the daughter of the company’s CEO, Robert Saucier.
The suit demands that Galaxy Gaming Inc. pay the outstanding balance of the loan plus interest and legal fees. Saucier, of the Spokane, Wash., and Las Vegas areas, has managed both Galaxy Gaming LLC and Galaxy Gaming Inc. in recent years, and he’s now the CEO of Galaxy Gaming Inc.
“Our position is that this is completely false and we examined the claims and made the decision that Bank of America with its bullying tactics is trying to get us to be responsible for a note that we never agreed to be involved in,” Saucier told analysts and investors on a conference call today, one day after the company reported a quarterly profit.
Galaxy Gaming Inc. lists the B of A loan on its balance sheet as one of the components of its long-term debt, with a balance of $1.1 million as of Sept. 30, monthly payments of $9,159 and a balloon payment of $1 million in 2017
“The note agreement with the commercial bank remains in the name of Galaxy Gaming LLC and we have no direct obligation to the commercial bank, but rather to Galaxy Gaming LLC, a related party,” Galaxy Gaming Inc. said in a regulatory filing today.
“We intend to vigorously defend ourselves in this matter and to pursue all available remedies against B of A, including but not limited to, recovery of damages caused by them. Our executive leadership team believes the matter will be resolved favorably and without material effect to our business, however, we could be subject to penalty interest and acceleration of the outstanding (loan) amount if unsuccessful,” Galaxy Gaming Inc. said in the regulatory filing.
Besides suing Galaxy Gaming, the bank has initiated foreclosure proceedings against a Las Vegas property owned by relatives of Saucier and that Galaxy Gaming leases as its headquarters.
The company’s counterclaim filed Tuesday in Clark County District Court asserts allegations including abuse of process and slander of business.
“The existence of Bank of America’s wrongful litigation against Galaxy Gaming Inc. has become widely known, both in business circles, and through required governmental reporting by Galaxy Gaming Inc. to gaming regulators and other administrative agencies,” the counterclaim says. “The disclosure of the existence of this wrongful litigation has caused substantial damage to Galaxy Gaming Inc. in the form of negative media reporting, unnecessary scrutiny by governmental agencies, reluctance on the part of business associates to continue in business relationships and other general and yet unknown damages that will continue throughout the pendency of the wrongful litigation.”
B of A has not yet responded to the counterclaim, and it’s unknown whether the lawsuit will proceed or be settled.