James Smith
Well-Known Member
Read the court happenings this morning here http://www.coventrytelegraph.net/news/coventry-news/coventry-city-owners-back-high-6351066
Read the court happenings this morning here http://www.coventrytelegraph.net/news/coventry-news/coventry-city-owners-back-high-6351066
Could you put the article up on here please James?
http://www.coventrytelegraph.net/news/coventry-news/coventry-city-owners-back-high-6351066©Coventry Telegraph & Les Reid said:The owners of the Sky Blues were today back at the High Court to challenge Coventry City Council’s £14million “bailout” of the Ricoh Arena.
Companies related to hedge fund Sisu claim the £14.4million support for the partly council-owned Arena Coventry Limited in January was an unlawful use of public funds under European legislation.
Today’s renewed application sought Mrs Justice Thirlwall’s approval for the case to go forward to a full judicial review.
After both sides gave their submissions, she adjourned and will announce later this afternoon if she will make her judgment today or tomorrow.
In court was Sisu boss Joy Seppala, and club directors Tim Fisher and Mark Labovitch; council assistant finance director Barry Hastie and council solicitor Christine Forde.
The oral hearing follows Justice Males’ rejection of the case in August - which was based on each sides’ paper submissions. He had ruled there was no arguable case that the council’s loan to ACL had constituted an unlawful “state aid”.
Instead, he judged it was made on commercial terms to protect the council’s investment in ACL when ACL’s bank was threatening to call in its mortgage debt.
He had also ruled that - had the council not bought out ACL’s Yorkshire Bank mortgage and refinanced it as a loan to the Ricoh firm - ACL could have become insolvent in circumstances where the club was withholding rent “as a means of exerting pressure in commercial negotiations”.
James Goudie, for the council, told the court this morning that judgment had been “spot on”.
He added Sisu and the club had “deliberately adopted a tactic of a rent strike, whether a total or partial rent strike. It was that which lead to the (club’s) administration”.
Rhodri Thompson, QC for the Sisu companies, told the judge the loan’s real purpose was part of a “secret plan to drive us out of Coventry”.
He claimed the council wanted new owners of the club. ACL in March filed for CCFC Ltd’s administration in the High Court and Mr Thompson claimed the entire plan was concocted “months before”.
Mr Thompson said the Sisu companies - Arvo Master Fund, Sky Blue Sports & Leisure Limited and Coventry City FC Holdings - asserted the £14m transaction was intended to prevent a deal emerging from negotiations, which would have seen the club acquire a 50 percent stake in ACL and bring in events management company AEG to run the stadium.
The club claims the loan to ACL using council cash balances was “state aid” because it interfered with fair competition between international businesses operating sporting and entertainment venues, and with the negotiations between the club, ACL and its 50percent shareholder, the Alan Edward Higgs Charity.
Mr Thompson alleged the council was “riding two horses” by negotiating with Sisu while “behind their backs” the council was seeking a deal with the bank to buy out the mortgage itself.
He claimed there had been prejudice against Sisu and that council finance director Chris West later said in a minuted meeting that “hell would freeze over” before the Ricoh was sold to Sisu.
The Sisu companies allege a commercial investor would not have made the £14m transaction.
Sisu companies allege the council’s justification, that it was protecting its commercial interests in ACL, was unjustified as the council’s freehold ownership of the Ricoh was not under threat.
Is this bit here not irrelevant?
Mr Thompson alleged the council was “riding two horses” by negotiating with Sisu while “behind their backs” the council was seeking a deal with the bank to buy out the mortgage itself.
Unless some sort of exclusivity agreement had been signed then I don't understand why they are bringing that up.
It does appear that CCC had very little to say, whilst SISU said quite a lot.
I wonder if that's what actually happened....
Sorry to repeat this I put it on the wrong thread:
One thing against SISU is they had a chance to buy a share in the stadium and didn't take it. It is not like the council have always refused to sell to them?
They are claiming dirty tactics by CCC when their own dirty tactics didn't work. It's a bit like claiming someone dived for a penalty after their leg has been put in plaster!
Is this bit here not irrelevant?
Mr Thompson alleged the council was “riding two horses” by negotiating with Sisu while “behind their backs” the council was seeking a deal with the bank to buy out the mortgage itself.
Unless some sort of exclusivity agreement had been signed then I don't understand why they are bringing that up.
good point, it's not uncommon practice in business to be pursuing 2 options so as you say unless exclusivity had been agreed there's no arguement to make there.
Because it demonstrates that the council were seeking to distort the market.
So what should they have done?
Because it demonstrates that the council were seeking to distort the market.
Mr Thompson alleged the council was “riding two horses” by negotiating with Sisu while “behind their backs” the council was seeking a deal with the bank to buy out the mortgage itself.
Did the council make a deal with the bank to buy out the mortgage? That says to me the council were speaking directly with Yorkshire Bank and made a deal to buy the mortgage off the bank for a certain % of the total amount owed. Essentially in the hope YB would sell it for that % as they feared ACL would default.
Is that was actually happened? Or did the council make a loan to ACL which ACL then used to pay off their outstanding debt to the bank?
They are 2 very different scenarios.
And SISU don't? Players contracts? share to play in League? How much debt? No published accounts?
Contradicting statements from board members?
My understanding was CCC bought the mortgage out so ACL got a better rate, protecting the Ricoh as a facility for the people of Coventry. That meant CCC would get the money back with interest.
What market is that distorting and how much state support I they using to distort it?
In which case the question would be did the pay off the loan in full or buy it off Yorkshire bank ata discounted rate.
In which case the question would be did the pay off the loan in full or buy it off Yorkshire bank ata discounted rate.
I may be missing something here. Would you mind explaining the difference and your take on the two scenarios?
1. The council pay off the loan in full and then borrow money to lend to ACL
2. The council renegotiates the terms with Yorkshire Bank
I thought CCC borrowed money to buy the mortgage and then ACL were paying the mortgage to them at a preferential rate to what they had with the Yorkshire Bank?
Which is different to your two options?
Let the market operate. SISU were also guilty of distorting the market but in their world they're allowed to do that. Councils are not supposed to intervene.
I am not taking sides here I'm just stating what I think SISU's argument is. It's an odd position as ACL are a private company that aren't a private company really.
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