Youbet called in default of loan

Youbet.com, the online horse race broadcasting and wagering company, has agreed to pay a lender $100,000 and place restrictions on its financial dealings with its offshore rebate shop, International Racing Group, as a result of a default on a loan agreement because of the seizure of $1.5 million in IRG bank accounts by federal investigators in early October.

The seizure of the money by investigators from U.S. Immigration and Customs Enforcement on Oct. 11 put Youbet.com in default for the terms of a $19 million loan with Wells Fargo Foothill Inc., Youbet.com said in a Tuesday filing with the Securities and Exchange Commission. Wells Fargo provided the loan last year so Youbet could complete its acquisition of the bet-processing company United Tote.

Hud Englehart, a spokesman for Youbet, said the company was only in a technical default of the loan because the seizure violated a provision in the credit agreement, and that Youbet had made all the payments on the loan to Wells Fargo that have been required.

"The reason this got resolved so quickly is because Wells Fargo understood the situation Youbet is in," Englehart said.

Wells Fargo waived the default, Youbet said in a statement, on several conditions, including that Youbet pay the bank $100,000 as an "accommodation fee."