WA gaming billionaire Laurence Escalante sued for sixty million dollars over contract breaches
Perth-based Virtual Gaming Worlds founder Laurence Escalante faces fresh legal action as investment firm Akru Jessy Capital lodges writ in WA Supreme Court seeking up to sixty million dollars in damages for alleged breach of corporate agreements and unpaid advisory fees dating back to 2015
PEOPLE & COMMUNITY
Western Australian online gaming billionaire Laurence Escalante is confronting fresh legal turmoil after a writ lodged in the WA Supreme Court revealed he is being sued for up to sixty million dollars over an alleged breach of contract involving capital-raising and financial advisory services provided to his Virtual Gaming Worlds empire between 2015 and 2020. Escalante, the owner of the Virtual Gaming Worlds empire which operates a network of casino-style online games in the United States, is already facing a number of criminal charges including persistently engaging in family violence, criminal damage or destruction of property, and multiple drugs charges, but this latest civil action marks a significant escalation in his mounting legal troubles.
The investment firm Akru Jessy Capital Pty Ltd and its principal, Perth investor Jasveer Jessy, have hauled Escalante and his company to court over what they allege is a breach of corporate mandate agreements, fee contracts, buyback deeds, and dividend distributions entered into during the period when Jessy and AKRU provided capital-raising and financial advisory services to VGW Holdings. At the heart of the dispute is an alleged outstanding sum of almost twenty million dollars relating to these financial arrangements, with Jessy and AKRU alleging they are owed a capital buyback principal based on 2.6 million VGW shares valued at 4.60 dollars per share and collectively worth 11.96 million dollars.
In addition to the share buyback claim, the investment firm is seeking unpaid historical dividends valued at 6.77 million dollars, unpaid options at 286,800 dollars, and unpaid bridge capital fees of 147,000 dollars according to the writ lodged in the WA Supreme Court. However, the investment firm is also seeking an alternative claim allegedly valued at 59.86 million dollars based on damages for breach of contract arising from an alleged failure to deliver 6.6 million performance shares or options as agreed, calculated at market value, which represents the bulk of the sixty million dollar figure cited in the legal action.
Jessy and AKRU have also proposed a secondary alternative claim based on damages for an alleged breach of a binding settlement agreement made in 2020 that was allegedly rebuffed by Escalante, under which they seek 500,000 company shares and 500,000 personal shares transferred by Escalante along with a cash sum exceeding 500,000 dollars. According to the writ, Jessy and AKRU are also seeking payment of fair market remuneration on a quantum meruit basis, also known as fair pay, for work including financial advice, option structuring, and capital raising of more than 10.9 million dollars between 2014 and 2018, adding another layer of complexity to the already intricate legal dispute.
VGW Holdings has been contacted for comment regarding the allegations but has not yet issued a public statement addressing the specific claims made by Akru Jessy Capital and Jasveer Jessy in the writ. The legal action comes at a particularly challenging time for Escalante, who has been embroiled in multiple criminal proceedings including recent drug-related charges that brought his total number of criminal accusations to 17, which includes an alleged assault on his former partner, according to earlier court appearances in Perth Magistrates Court.
The dispute highlights the complex web of financial arrangements that accompanied the rapid growth of Virtual Gaming Worlds, which has significantly increased Escalante's wealth to approximately 4.5 billion dollars through its operation of online gaming platforms across the United States. Legal experts suggest that the quantum meruit claim for fair pay on work performed between 2014 and 2018 could prove particularly contentious, as it requires the court to determine what constitutes reasonable remuneration for financial advisory services rendered nearly a decade ago without a clear contractual framework governing the compensation.
Jasveer Jessy, through Akru Jessy Capital, has maintained that the investment firm fulfilled all its obligations under the various agreements entered into with Escalante and VGW Holdings, providing crucial financial advice and capital-raising services during a pivotal growth period for the online gaming company. The writ alleges that despite these services being rendered and various agreements being executed, Escalante and his companies have failed to honor their financial commitments, leaving Akru Jessy Capital with substantial unpaid obligations spanning share buybacks, dividends, options, and advisory fees.
The legal proceedings are expected to shed light on the inner workings of Virtual Gaming Worlds' financial arrangements during its formative years, potentially revealing details about how the company structured its capital-raising efforts and compensated its financial advisors during the period when it was establishing its presence in the competitive US online gaming market. For Escalante, who is already managing multiple criminal defense matters, this civil lawsuit represents another significant distraction and potential financial liability that could complicate his ongoing efforts to defend against the criminal charges he faces in Western Australian courts.
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