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Everton bidders in new lawsuit

 

777 Partners, the Miami-based investment firm trying to buy Everton, has been described as a “crumbling house of cards” in a lawsuit filed in New York this week.

The dispute is between 777 and Obra Capital, an American investment firm that lent Everton’s would-be custodians $55million in July 2020. As collateral for the loan, which was meant to be repaid a year later, 777 put up shares in an insurance company it owns and agreed to provide Obra with regular updates on its financial position.

According to documents filed at the Supreme Court of the State of New York on Thursday, Obra agreed to extend the loan three times when 777 asked for more time to repay the debt. But its patience ran out in June 2022, when it triggered its option to buy the shares in the insurance firm 777 had put up as collateral for the debt. Obra claims this reduced the debt, which had grown with interest to $63million, to just over $22million.

777 disputes these numbers and the two firms have been arguing about it ever since but Obra has now raised the stakes by accusing 777 of transferring two “cash-rich subsidiaries” to its co-founder Steve Pasko without any money changing hands “to shield those assets from creditors”.

When asked for comment, 777 said it does not discuss ongoing litigation but it has previously dismissed its various legal entanglements as baseless or opportunistic.

777 is currently embroiled in a remarkable number of lawsuits, as Obra points out in its court filing. In the last 12 months, nine different companies or individuals have started legal proceedings against 777 for unpaid fees, loans or rent. The sums claimed total more than $100million.

Obra’s filing also notes that 777’s proposed takeover of Everton has still not been approved by the Premier League 25 weeks after it was first announced by the Premier League club’s current owner Farhad Moshiri. League approval was expected to come within 12 weeks.  Referring to the stakes in seven other football clubs that 777 has bought since 2018, Obra said its “flashy shopping spree” has “raised questions about the source of its funding and the health of its business operations… (questions) it has not been able to answer”.

“With this enhanced scrutiny, 777’s house of cards began crumbling down,” it added. There is a football angle to this dispute, though, as Obra is owned by RedBird Capital Partners, the investment firm founded and run by American financier Gerry Cardinale. RedBird owns Italian side AC Milan and French team Toulouse, as well as owning a minority stake inl Liverpool.

 

 

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