Court documents claim 777 ‘house of cards began crumbling down’ as deadline nears

Last week saw potential new Everton owners 777 Partners have a face-to-face meeting with the Premier League in relation to the investment firm’s ongoing attempts to acquire the football club.

 

777 co-founder Josh Wander, who had been among the delegates to be found in the foyer of the Biltmore Mayfair in London the week before as the Financial Times held its annual Business of Football Summit,

 

remained on British soil, taking in the defeat to West Ham United at Goodison Park on March 2 before being summoned for a meeting with the Premier League.

 

Precisely what was discussed at the meeting and the outcome of it won’t be known for a little while yet, with the Premier League

 

continuing to want answers to certain questions around funding from 777, who had agreed to purchase Farhad Moshiri’s majority shareholding back in September.

 

The process has yet to reach a conclusion despite the process now having dragged on some six months, well over the 12 weeks that had been hoped for at the start of proceedings.

 

The Premier League met with 777 last Tuesday, and the anticipation is that the information they now have is the information they will analyse and decide upon.

 

So far, 777 has provided the club with around £180m of funds for working capital, to help them meet payroll obligations and to

 

ensure that the payments for stadium construction are met on time, with any change to that likely to see a change in the agreement that was reached around protection over rising costs.

 

Another month passes and the club moves closer to another cliff edge in terms of requiring more funding, and with Moshiri seemingly

 

having all but checked out on that front, 777 is unlikely to meet those costs without some kind of security of a decision.

 

Back in December, the ECHO were told by sources that the company would not fund the shortfall ‘indefinitely’.

 

777’s bid to take over at Everton has seen the company come in for more scrutiny,

 

with a number of legal cases having been brought against the firm across its large number of investments, which as well as sport also includes finance and aviation.

 

Last week, a complaint was filed against 777 at the Supreme Court of New York by investment firm Obra Capital. The legal case centres around a $55m sum that Obra Capital,

 

a company part-owned by RedBird Capital Partners, the investment firm that owns 11% of Liverpool owners Fenway Sports Group.

MORE EPL STORIES 

Everton’s PSR stance criticised amid Newcastle United and Aston Villa developments

King makes ‘sticky’ claim as 777 takeover update emerges

Match of the Day pundit lauds Wolves star as ‘the difference’ against Fulham

Everton shock Andy Gray with what they did vs Manchester United

 

The complaint stems from the collateral that 777 offered up to get the loan in 2020, which was shares in an insurance company in the company’s portfolio of assets.

 

Obra claim that 777 was handed three extensions of the loan before Obra then called in the debt via the collateral, with that debt reduced from $63m with interest to $22m.

 

The two firms have been at odds over the numbers, but Obra has now filed a complaint where it claims that 777 moved two ‘cash-rich’

 

subsidiaries (Sutton Speciality Insurance Company and Sutton National Insurance Company)

 

to 777 co-owner Steven Pasko for no money, and that the move was done to “shield those assets from creditors.”

 

As outlined in the documents, which the ECHO has seen, Obra are seeking the money owed, interest, legal fees, as well as “punitive damages.”

 

Everton are referenced in the court filings due to the increased scrutiny that 777 have come under ever since its bid to acquire the club.

 

The filings claim that “with this enhanced scrutiny, 777’s house of cards began crumbling down.”

 

The court filing also claims that 777, having told Obra Capital that they were sufficiently capitalised as a business to meet the payment requirements,

 

under the third extended loan agreement in 2022 it failed to make any of the required payments, which is when Obra sought to claw back funds owed through the collateral against the loan.

 

The filing also goes on to list the multitude of other ongoing legal cases over alleged unpaid debts, which the filing claims come to around $47m.

 

777 Partners are not responding on record to the ongoing litigation, as has been its long-standing position around not commenting on legal action.

 

For the Premier League, the arrivals of further questions in relation to the group’s potential ownership of the club,

 

coming after last week’s meeting between League chiefs and 777, is likely to exacerbate an already difficult situation.

 

But it is a situation that needs to be addressed either way, very quickly, so that the club can plan for what comes next, in any eventuality.

 

The reportage of the Everton takeover in the ECHO, as well as other publications, was cited in the Supreme Court filings.

 

For More Stories Like This, Check Our Sport Page.

3 Trackbacks / Pingbacks

  1. Benfica warned about ‘electrifying’ Rangers atmosphere at Ibrox...
  2. President says he rejected €20m offer from Nottingham Forest....
  3. Wolves record-breaker set for summer exit after Gary O'Neil......

Leave a Reply

Your email address will not be published.


*