Update on £200m loan The Friedkin Group want to settle to complete Everton takeover

Update on £200m loan The Friedkin Group want to settle to complete Everton takeover

Everton's prospective new owners, The Friedkin Group, are awaiting approval of an agreement reached with A-CAP

Dan Friedkin, Farhad Moshiri and Josh Wander

The Friedkin Group (TFG), the prospective owners of Everton, hope to have an important issue in relation to the the takeover settled in the coming weeks.

Last week, the Houston-based firm, led by US billionaire and AS Roma owner Dan Friedkin, announced that it had reached an agreement with Blues owner Farhad Moshiri to acquire his 94.1% shareholding in the club he has through his Blue Heaven Holdings Limited firm.

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A share purchase agreement has been reached and TFG are now already moving through the process of gaining regulatory approval from the Premier League, the Football Association, and the Financial Conduct Authority, with few problems anticipated. That process is expected to conclude in late December/early January.

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Back in July, TFG had decided to step away from a takeover deal owing to concerns over the £200m-plus debt that lay on the club’s balance sheet to 777 Partners, the crisis-hit Miami investment firm whose long-doomed bid to buy Everton eventually failed at the end of May when they failed to meet a deadline set by Moshiri.

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The 777/A-CAP debt was an issue for TFG. That was due to concerns they had over the ongoing litigation in a New York civil court, where 777 Partners were the defendant in a case brought by London-based lenders Leadenhall Capital.

Leadenhall Capital alleged ‘fraudulent’ activity on behalf of 777 through putting up collateral that either didn’t exist or wasn’t owned by the co-founders to secure $350m of funding. 777 Partners have denied the allegations and the case continues.

But while another US billionaire, John Textor, came into the picture with regards to a potential takeover bid of the Blues, TFG remained in dialogue with other club creditors due to having a position as a club creditor themselves, as well as having to be repaid £200m on completion of a deal had the club been sold to someone else.

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Having sought legal counsel and after continued dialogue with A-CAP, who had been the lenders behind 777 Partners operations but who were now in the process of clawing back some of its money from 777-owned assets, the ECHO was informed early last week by sources that a deal had been reached between A-CAP and TFG, with that agreement to be put before the New York civil court, with both hope and expectation that it will be accepted as part of the Leadenhall case, removing some of the perceived risk that TFG saw in having 777 debt on the balance sheet given the severity of the allegations and potential ramifications.

That situation is set to move on in the coming days and weeks, with a letter to the New York court from the lawyers of Leadenhall, King & Spalding International LLC, addressing the agreement that had been struck between TFG and A-CAP over the 777 debt. While an agreement is in place, the proposed transaction between the two has not taken place, and won’t take place until such time a decision is communicated via the New York court on whether it is acceptable.

A letter from the a member of the Plaintiff’s legal counsel, Leigh Nathanson, submitted to Judge Koeltl, presiding, read: “Press reports indicate that A-CAP has taken control of Standard Liege from 777 Partners and is marketing the team for sale, and A-CAP has reached agreement with Everton’s new prospective buyer, including the disposition of a £200m loan extended to Everton by 777 Partners and /or its affiliates.

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“Because Leadenhall is concerned that these transactions amount to asset-stripping in violation of the preliminary injunction, it sought further information about them. Starting on September 9, 2024, Leadenhall reached out to counsel for the 777 Entity Defendants requesting information about the terms of these transactions to assess whether either or both transactions implicate any assets of 777 Entity Defendants subject to the preliminary injunction in this matter.

“777’s counsel did not share terms of the transactions and represented that they had no information about the Everton loan.

“On Monday, September 30, three weeks after Leadenhall first raised the issue with the 777 Entity Defendants, counsel for A-CAP belatedly provided Leadenhall, ING Capital LLC, and National Founders LP with notice of the Everton transaction.

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“A-CAP has not provided any details regarding the terms of the transaction but has committed to do so subject to a non-disclosure agreement. A-CAP has represented that the transaction will not close until Leadenhall, ING, and National Founders have the opportunity to review the terms and address any concerns with Defendants.

“Leadenhall with endeavour to work co-operatively with the parties and seek the Court’s guidance as necessary.”

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While some of the tone of the letter may raise some concerns among Everton supporters, the crux of the matter is that Leadenhall wants to review the terms of the deal between TFG and A-CAP to ensure that it would not be detrimental to the case that they are making against 777 and A-CAP in the New York civil suit in terms of getting money back which is owed to them.

A hearing on the matter was expected to take place at 3pm this afternoon, Eastern Daylight Time (8pm GMT).

According to sources close to TFG, the stance remains the same on the A-CAP issue. It has to go before the court for approval, and there is confidence that the agreement will be approved by the Court and Leadenhall and that the issue can be resolved in a timely manner, with the focus for TFG then very much on ensuring all things are in place to gain regulatory approval and complete the takeover of the Blues.

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