June 16, 2024

The potential acquisition of the Premier League football club, Everton, by Miami-based firm, 777 Partners, is in limpbo following allegations of fraud. London’s Leadenhall Capital Partners and Leadenhall Life Insurance Linked Investments Fund have accused 777 Partners and co-owner Josh Wander of orchestrating a “fraudulent scheme.” The lawsuit has been filed in a New York civil court.

With the looming troubles around the deal with 777, there may be fresh opportunities for other potential buyers as early as this week. These prospective buyers could include Middle East’s sovereign state funds, such as the Qatar Investment Authority (QIA).

The filed allegations accuse Wander and 777 Partners of pledging over $350m in assets as collateral for credit facility agreements. Yet, these assets either “did not exist” or were actually not owned by Wander’s entities. The claim seeks to recover “millions of dollars in damages from a house of cards on the brink of collapse.”

These developments further deepen doubts over 777’s attempts to take over Everton. Last year, they had agreed to buy Farhad Moshiri’s 94 per cent stake in the club. Despite delays and financial troubles, they sent over £16m to Everton for operational costs last week. Now, they must seek approval from the Premier League to finalize the deal.

Leadenhall’s court filing in the US warns others about this situation. The filing reads, “Everton is the latest shiny object of Wander’s fraudulent scheme, solvency aside.” The filing accuses Wander and Steven Pasko, co-owner, of running what could be an outright Ponzi scheme.

Keith Wyness, former Everton chief executive, opines that alternative buyers could quickly overtake 777 considering the intense acquisition talks. Everton’s financial advisers at Deloitte have reportedly reached out to sovereign wealth funds in various Gulf nations, including the QIA, to attract fresh bidders.

These potential new entrants could find the revenue potential of Everton’s new stadium to be quite appealing. The stadium, in addition to increasing ticket sales for matches, can also host other large events like concerts, leading to more revenue.

Despite the financial troubles, 777 has requested an extension for repaying £160m of lending to MSP Capital and other businesspeople. They have assured that the acquisition of Everton will be completed by the end of May. Everton has been under the control of British-Iranian businessman Farhad Moshiri since 2018, who has reportedly invested approximately £750m in the club thus far.

As this drama unfolds, Everton, 777, Deloitte, and QIA refrain from commenting on the matter.

Frequently Asked Questions

Who are the prospective buyers of Everton Football Club?

777 Partners have shown interest in acquiring Everton. However, due to accusations of fraud, other potential buyers might emerge swiftly. These could include Middle East’s sovereign state funds, such as the Qatar Investment Authority (QIA).

What are the accusations against 777 Partners?

London’s Leadenhall Capital Partners and Leadenhall Life Insurance Linked Investments Fund allege 777 Partners and co-owner Josh Wander of operating a “fraudulent scheme.” The allegations claim assets pledged as collateral for credit facility agreements didn’t exist or weren’t owned by Wander’s entities.

What is the appeal for new bidders?

The increased revenue potential because of Everton’s new stadium could be quite appealing to new bidders. The stadium, in addition to boosting ticket sales for matches, can also host other large events, resulting in more revenue.