The Bankruptcy Court in Delaware has restricted transfers from the U.S. accounts of Papaya Gaming. This decision was made amid its dispute with FIRY (formerly known as Skillz), to whom Papaya Gaming owes approximately $730 million.
Papaya Gaming can no longer transfer funds to shareholders, insiders, and affiliated companies. It is now allowed only to make operational transactions, which must first be funded from the company's accounts outside the U.S. at 115% of the amount of each payment.
The court's concerns were triggered by the transfer of $70 million from the U.S. to Israel, made several months before the legal proceedings with FIRY began. This transfer was not reported to the court, constituting a breach.
Previously, a U.S. court found Papaya Gaming guilty of unfair competition with FIRY. The company was ordered to pay $719 million in compensation and $10 million in legal fees.
Meanwhile, bankruptcy proceedings for Papaya Gaming continue in Israel. A creditors' vote on the revised debt repayment plan is set to take place this Sunday, November 8.