Papaya Gaming is taking decisive and strategic legal actions to safeguard its interests while it challenges a staggering $719 million verdict imposed on July 27 by a federal judge in New York.
Papaya, which has its headquarters in Israel and U.S. offices in Delaware, announced on August 3 that the company behind Solitaire Cash has received a temporary stay of proceedings from the Tel Aviv District Court. Concurrently, Papaya has initiated an ancillary proceeding in the U.S. Bankruptcy Court for the District of Delaware to create a unified legal structure while its appeal is in progress.
The company asserts that these legal filings will facilitate the ongoing operations of its “profitable business,” safeguard its employees, players, and all stakeholders as they navigate the U.S. appeal process. While Papaya’s statement did not explicitly mention “bankruptcy,” the case is classified as a Chapter 15 filing, designed for cross-border insolvency and international asset protection.
Casino.org has acquired a copy of Papaya’s Chapter 15 bankruptcy filing. The document indicates that Tel Aviv District Judge Iris Lushi-Abudi granted the temporary stay on August 2.
Judge Lushi-Abudi recognized that if the appeal doesn’t favor Papaya, the company could face insolvency.
“The Applicants acknowledge that they cannot pay the debt owed to Skillz if it becomes enforceable, along with their other debts,” Lushi-Abudi stated.
Skillz, now operating under the name Firy Inc., successfully sued Papaya, alleging that the mobile skill gaming company and its peer-to-peer platform deceived users by failing to disclose the extensive use of computer bots. In April, a jury found that Papaya had violated federal laws on false advertising and consumer protections.
Papaya’s Appeal
Papaya was held financially accountable for harming Skillz’s financial and reputational status. U.S. District Judge Denise Cote mandated that Papaya pay Skillz $719 million.
The company, which asserts it has ceased using bots in its real-money head-to-head mobile skill games, is appealing Judge Cote’s ruling. Meanwhile, should the District of Delaware’s U.S. Bankruptcy Court approve the Chapter 15 petition, it would halt Skillz from commencing collection actions until the appeal is resolved.
“Given our financial achievements, this move—aligned with both Israeli and U.S. laws—enables us to continue our normal operations until the U.S. appeal is determined,” stated Papaya. “This represents a proactive, responsible strategy to protect the Company’s operations and the rights of all parties throughout the potentially lengthy appeal process. Papaya’s business continues to operate as usual, fulfilling all obligations to employees, players, vendors, and service providers without interruption.”
Status of the Appeal
Papaya has not yet officially filed its appeal against Skillz Platform vs. Papaya Gaming, but it has declared its intent to do so. The case will be presented before the U.S. Court of Appeals for the Second Circuit in New York City.