Directors of limited companies have a number of duties, their primary duty of course, being to look after the interests of the shareholders (members) through the wellbeing (promote the success of) of the company. However additional duties apply also. Under the Companies Act 2006 those duties include to exercise independent judgement, to exercise reasonable care, skill and diligence and to avoid conflicts of interest.

In the case of Everton Football Club Company Limited, our directors comprise of Farhad Moshiri, Colin Chong and John Spellman.

The requirements of the Companies Act 2006 cannot be viewed in isolation however. The fiduciary or equitable duties arising from previous case law remain relevant, as do the duties within other Acts. One such Act is the Insolvency Act 1986. Contained within that Act, amongst other duties, is the issue of what to do around insolvency or a reasonable prospect of insolvency.

Insolvency occurs when a company doesn’t have the cash to pay its bills on time (cashflow insolvency) or when its liabilities (what it owes) exceed its assets (what it owns) – balance sheet insolvency. An insolvency event can occur suddenly (for example when a major debtor can no longer pay its bills, or funders/lenders/banks decide to cease supporting a company) or more gradually over time as a company’s financial position deteriorates to the point it can no longer meet its obligations.

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Directors have a duty to act at this point or beforehand, if there’s there’s no reasonable prospect of meeting current and future obligations. Their duties turn to protecting the interests of their creditors (i.e. the people they owe money to).

Going Concern?

The question for the Everton board of directors is when do they recognise the latter point in particular? It is not enough to point at the last set of audited accounts and point to the “going concern basis”.

The Everton Accounts ending 30 June 2023 were signed off on 14 January 2024 when directors firstly recognised “a material uncertainty that may cast significant doubt about the Group’s ability to continue as a going concern”.  This was qualified with “the board are confident that funding will be secured or refinanced and that they will be able to achieve the levels of revenue and savings to allow the Group to continue in operational existence for a period of 12 months…” It is this belief that permitted the preparation of the Accounts on a going concern basis”.

The question for the board and individual directors to answer is this still the case?

Acquisition by 777 Partners

As discussed in detail here, the Premier League placed four major conditions on the proposed new purchasers of Everton, 777 Partners to successfully conclude their acquisition. All of the conditions have to met. They are (as reported by Josimar):

(i) Conversion of working capital  loans by 777 Partners totalling just over £150 million (now circa £180 million) into equity,

(ii) Funds into an escrow account to keep the club going for the rest of the season,

(iii) Proof of funding to complete the new stadium, and repayment of MSP’s £158 million stadium loan by mid (15th) April.

(iv) Payment to Moshiri : £64 million up front, rising potentially as high as £130 million if a series of milestones are met.

All of the above minimally require an immediate cash injection of £340 – 360 million (assuming £80-100 million to Laing O’Rourke) by 777 Partners to effect the takeover. If the conversion of loans to equity require refinancing elsewhere within the 777 Partnership then the cash requirement is likely and reasonably calculated to be over £500 million.

Even such an amount only gets the club to the end of the season and does not  factor in the potential costs of relegation.

777 Partners (as initially reported by Sky News) have requested a stay until the end of May to repay MSP. Thus the confidence of the directors is totally reliant upon (i) MSP’s willingness to extend (ii) the Premier League’s acceptance of the extension and (iii) most importantly, 777’s ability to raise a minimum of £340 – 360 million in a little over 6 weeks. This having failed to raise the funding required at any time in the last 7 months other than the working capital loans, borrowed from third parties, to keep Everton afloat. Those loans are believed to be highly expensive with interest costs believed to be in the mid-teens per cent. They additionally may have to be repaid in order for 777 to convert to equity (should they meet the other conditions).

MSP are the key and most immediate participants in this situation. Through Blythe Capital they hold security over 50% + 1 of Everton’s share capital (MSP – Blue Heaven Holdings charge document) and additionally security over the entire capital of Everton Stadium Development (Blythe ESDL 1) and (Blythe ESDL 2).

It should be remembered that MSP are creditors and the responsibility of MSP’s managing partners (the decision makers within MSP) is to their limited partners (investors) not Everton Football  Club per se.

MSP have three choices (i) allow 777 Partners more time (ii) exercise the acquisition of 50%+1 of Everton’s shares, becoming Everton’s majority holder or (iii) take control of the lease, land and stadium at Bramley-Moore Dock).

Each is fraught with risk and additional costs. Each has potential knock-on consequences for each party

Option (i) is a leap of faith – do they believe 777 will raise the required funds in the next 6/7 weeks given all that’s gone before, and do they trust the Everton board to keep the club solvent until such a time as MSP are repaid. There must be significant doubts as to either outcome. The list of cash and capital calls in the near term are significant – working capital, stadium repayment and contingency funding for potential relegation. 777 have demonstrated no ability to raise the capital required to purchase Everton and the Everton Board is (in my opinion) failing in its duties to members and creditors.

Option (ii) gives MSP control of Everton but then requires MSP to solve Everton’s immediate cash and capital demands. Those demands include Everton’s working capital requirements in the short term, any obligation to other creditors arising from the change of control, the remaining stadium repayments, and the contingency funding required for potential relegation.

It would require MSP to commit additional funding or have the support of alternative investors immediately available.

Option (iii) provides a stadium worth considerably more than the debt owed to MSP but (a) the stadium is not complete and requires additional funding and perhaps more importantly (b) the stadium’s value is entirely tied up with Everton’s future solvency and capacity to play there in the future and in which League or division.

Acquisition of the stadium alone, does not solve Everton’s liquidity problems and may arguably push Everton Football Club Company Limited into balance sheet insolvency, as without the stadium its liabilities are surely greater than its assets

Duty to other creditors

Everton’s directors have an equal duty to all other creditors which include Rights and Media Funding, remaining Metro Bank debt, football creditors, other trade creditors, staff and HMRC. They have a responsibility to 777 Partners as creditors and indeed the Isle of Man Company Bluesky Capital – the provider of the shareholder loans. Everton’s accounts have always recognised Moshiri’s control of Bluesky Capital but not his 100% ownership – an important distinction when compared to Blue Heaven Holdings, of which Farhad Moshiri is reported the sole beneficiary. Even if Bluesky Capital are prepared to write off their debt, until such a time as this occurs, the Everton Board has an equal duty to them as other creditors. (This should not be confused with the fact that the shareholder loans are unsecured and with no contractually agreed repayment date).

The role of Everton’s directors

I’ve talked endlessly about the role of Everton’s directors for many years. Never has the need for them to act responsibly been greater than it is now. Such is our plight that their legal duties must overcome any other interests or beliefs they may have.

Their recklessness in managing the running of a football club has been laid bare in the Commission hearings (regardless of how one feels about the Premier League, PSR, the Commission’s  decisions etc, this is irrefutable). Their inability to secure long term, sustainable funding for the stadium incomprehensible. To be fair, Colin Chong and John Spellman are recent appointees, but nevertheless carry the full responsibilities as directors.

The decision of Moshiri to agree the sale of his majority stake to 777 Partners and his unwillingness to seek alternatives is beyond comprehension.

He and they’ve got us to this point. A point in which realistically, despite there having been alternatives, the only realistic outcome is insolvency. Whilst I’ve stated previously (and stick by) the belief that the acquisition by 777 Partners was the worst of all outcomes, the second worst, administration is seemingly inescapable.

I don’t believe the directors can ignore this most likely outcome any longer.

It is the most desperate of times.

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Reader Comments (67)

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Tony Abrahams
1 Posted 11/04/2024 at 20:41:51
Serious question: What happens if Everton go into administration Paul? I know we will lose another 9 points, meaning certain relegation, but what would happen to the club?

Sorry that this seems a stupid question, but if you had the funds and wanted to purchase Everton, would you wait until the club went into administration, or would you try and buy the club now?

Andy Crooks
2 Posted 11/04/2024 at 20:57:36
Good questions, Tony.
Huw Jenkins
3 Posted 11/04/2024 at 20:57:49
As a director and a non-executive director of many companies, I think Mr Esk you are spot on. A totally irresponsible and narcissistic approach from those who control our club at board level.

We are a football club, but we are also a business... I would lose all of my director roles if I ran my businesses in the same manner...

Mike Gaynes
4 Posted 11/04/2024 at 21:00:29
Tony #1, it would depend on how the numbers crunched.

Would the club be cheaper to buy out of administration because of a lower value? Maybe so, assuming the associated costs of getting the club out of administration weren't prohibitive.

But... would the lower price be canceled out by the dramatically reduced inherent value and revenue potential of a club no longer in the Premier League?

Assuming relegation would mean top assets leaving the club, would that devalue the club by more than the reduced salary base would enhance it?

I think you'd need a sports accounting firm to figure this out.

Mike Hayes
5 Posted 11/04/2024 at 21:05:48
Mike Gaynes – ask Moshiri.

Oh no, hang on, wait a minute…

Huw Jenkins
6 Posted 11/04/2024 at 21:05:51
Mike #4

Forget our lifelong passion for the club, we don't need a sports accountant, we need business savvy approaches to sort things out behind the football.

I don't post much, but I'm really angry with what is happening...

Tony Abrahams
7 Posted 11/04/2024 at 21:16:11
Thanks Mike. When Paul writes that the decision by Moshiri to agree the sale of his majority stake to 777 Partners and his unwillingness to seek alternatives is beyond comprehension, I think this is when it gets easy to put two and two together.

Moshiri is a very rich man but I don't think he's rich enough to lose that amount of money without at least trying to be quite a bit more logical, whereas I don't think losing this amount of money would affect a man like Usmanov anyhere near as much.

A part of me genuinely thinks that Moshiri must have decided to go with 777 Partners because of a man who is no longer with us. But, without proof, I am merely just speculating.

Ken Kneale
8 Posted 11/04/2024 at 21:19:58
Tony - I posed the same question to my son on our regular 'all things Everton' chat.

I will be very interested in Paul's reply to your question – we seem to be in some form of unbreakable bind whereby no matter which way we move, there will be catastrophic consequences.
Kevin Molloy
9 Posted 11/04/2024 at 21:27:13
You can see how the west has sunk hundreds of billions into Ukraine. They aren't messing around, they are all in.

Now Everton has about a billion pounds of Russian investment keeping it afloat. I suspect those same western governments are absolutely determined that when the Ruskies pull out, they take back as little as possible, and if that means putting us out of business, then they won't blink about that.

We were just in the wrong place at the wrong time, and I fear are about to reap the whirlwind.

Brent Stephens
10 Posted 11/04/2024 at 21:30:27
As Paul says, Everton's directors' (not so much Chong and Spellman) recklessness in managing Everton "has all been laid bare in the Commission hearings; regardless of how one feels about the Premier League, PSR, the Commission's decisions etc, this is irrefutable".

"Their inability to secure long term, sustainable funding for the stadium is incomprehensible".

Brendan McLaughlin
11 Posted 11/04/2024 at 21:35:00
Tony #1

It's a difficult question.

To add to Mike's #4 post, a lot will also depend on how deep are the pockets of any potential investors and how risk-averse they are.

So, if you believe you can comfortably afford to buy Everton but don't fancy us coming back up pretty quickly (if relegated), I don't think you'd wait for administration to make your move.

If, however, you don't have very deep pockets and/or believe Everton will come back up pretty quickly... picking Everton up on the cheap could be very appealing.

Graham Fylde
12 Posted 11/04/2024 at 21:43:22
With three creditors each with a £200m stake I find it hard to envisage them letting it get to administration, especially given that I've heard Mike – convincingly – tell us that MSP are no mugs.

If there is a contract date of Monday for repayment of MSP, it at least concentrates minds, but it's oblivious from the Esk's piece that there are all sorts of difficulties to be addressed before it can happen.

Paul Birmingham
13 Posted 11/04/2024 at 22:01:17
Praying for salvation for Everton FC and staying afloat.

But how seems increasingly more complex, each passing day.

But hopefully there is way to acheive this, with out additional uxbs, to be looked after.

UTFTs!

Christine Foster
14 Posted 11/04/2024 at 22:18:46
We are no longer in the realms of "what if" but "what now" its the old adage oof put up ir shut up. Moshiri can't or won't, Rights and Media won't I think, 777 can't, so the decision seems to be in MSPs court.
I cannot see the logic of R&M standing in the way of MSP now even though they are secured creditors. Surely Moshiris game play with 777 is dead in the water now unless there is another twist in them..
Tony's White Knight better be saddling up and deciding when to get into the game otherwise events will overtake us and them. I wonder if the knight is going to ride along MSP or has their window of chance gone?
Peter Mills
15 Posted 11/04/2024 at 22:24:47
“How did you go bankrupt?”

“Two ways. Gradually. Then suddenly”.

Ernest Hemingway.

Phil Wood
16 Posted 11/04/2024 at 22:29:59
With Moshiri's insistence on 777 Partners, one could wonder if they are not connected in some way with Usmanov.

Dennis Stevens
17 Posted 11/04/2024 at 22:33:18
I suppose if Everton can survive this season and avoid relegation, then going into administration next season and taking the 9-point hit still gives them a slim chance of surviving yet another relegation battle, albeit with a near complete clear out of the existing squad.

Gotta look on the bright side!

Jerome Shields
18 Posted 11/04/2024 at 23:27:59
What is needed is a creditors agreement to park interest and a management team with ability to restructure the club management and finances over a 2-year period so that it is a properly run going concern.

This is a piece from an unknown contributor on Twitter who ToffeeWeb picked up on and posted in the On the Web section: Everton / MSP / 777 Partners; A Way Forward. He cites Elliot/AC Milan as an example.

I personally would like to see a Fergus McCann type character who came in and saved Glasgow Celtic from certain bankruptcy and left the fans with over 60% of the Club shares and a solid going concern when he left 5 years later.

Paul the Esk has called for professional corporate managers in the past, and in his article has given the results of failure to do so.

Simply put Moshiri has to walk away or, as I would put it 'to get the fuck out of the road', so that there is no doubt what has to be done.

Jerome Shields
19 Posted 11/04/2024 at 23:31:19
Phil @16,

The USA and UK authorities are cooperating to impose sanctions on Usmanov. This has came to light this week. So any possibility of such a connection has gone.

Don Alexander
20 Posted 12/04/2024 at 00:14:01
The Esk's welcome analysis could just as easily describe the previous 30 years in our boardroom in terms of lack of insight, ability and desire to do one sodding thing to improve the lot of us fans.

Moshiri has revealed himself as an utter incompetent when it comes to credible accountancy, football savviness, or public relations.

At best they've all fucked all of us over for many years to come and, Moshiri aside, become £millionaires in the process to the cost of all of us loyal fans/supporters (and he's minted anyway to no sympathy for him).

At worst, and it's a present-day reality, they've destroyed the most historic club in the history of English football.

Mark Taylor
21 Posted 12/04/2024 at 01:11:05
Tony @1,

That's an interesting question. It does of course depend on the price for the two options, which will be influenced by who, if anyone, is bidding for either or both options.

I have a very strong sense, especially if you are right about there being an 'angel' waiting in the wings, that this is a game of chicken to see who blinks first. That in turn will partly depend on whether 777 Partners, with all their myriad offshore links (or for that matter, Rights & Media Funding) have a way of funnelling money back to Usmanov.

Ben King
22 Posted 12/04/2024 at 01:19:10
What an incredible farce. Surely surely MSP have to take control and keep us up. Finish the stadium and then sell the club.

Even if they sell:

Branthwaite: £75M
Onana: £60M
Pickford £30M
Calvert-Lewin: £20M

Total: £185M

Give Dyche £60M to rebuild the squad and there's already £125M recouped.

Dyche has proven he can keep dog shite in the Premier League so he'd be the perfect man.

Surely surely administration and the ensuing loss of value would be inherently bad for all creditors??

The past, Directors including Billy Bullshitter, have ruined this great club and made the new stadium an albatross round the neck when it should have been cause for triumphant celebration.

Evertonians aren't allowed nice things, are they?


Don Alexander
23 Posted 12/04/2024 at 01:45:16
Usmanov vs Moshiri, a match none us know diddly squat about.

Is Usmanov as useless as Moshiri when it comes to so-called accountancy? Has he genuinely been financially hurt by Ukraine-gate sanctions? And in what spheres does one of the richest people on Earth have investments and serious sway over, especially as far as I'm concerned, the existence of Everton Football Club?

Is he (or others above him) so venal as to pose a serious threat to Moshiri's life?

I haven't a clue, but when it comes to the alleged credibility of mother Russia, they have a long-proven record of embarrassing folk simply being consigned to history by way of falls from windows, traffic accidents and the like.

Putin, Usmanov's for-now close pal, exemplifies it.

Laurie Hartley
24 Posted 12/04/2024 at 02:56:31
Paul - thanks for explaining our situation in so much easily understandable detail.

I have one question (for the time being):-

In your opinion, is it in the particular interests of any of 777 Partners, MSP, or Rights & Media Funding for Moshiri to put Everton into administration?

Christine Foster
25 Posted 12/04/2024 at 03:52:17
Paul, it's a great situational synopsis, but I would like to know exactly what are our best options:

1. To make the sale of the club attractive to a buyer going forward?

2. How can a secure financial footing be set in place without going into administration?

3. Who in your opinion would be best amongst known creditors?

4. Lastly, in your opinion, are we more likely to crash and burn?

James Flynn
26 Posted 12/04/2024 at 06:16:04
Regarding MSP, it is part of the Najafi Companies’ investments.

With that, the 5 football clubs and McClaren, that Najafi/MSP own minority stakes in, are in partnership with the other members of Global Football Holdings. (Link ).

Several of that Group have pieces of Crystal Palace, so can’t get into Everton too. But that's not my point in all this.

We are wondering what MSP is capable of financially if 777 fails. I have no idea how the sale of the Club will play out. I’ll see it when everyone else does.

I just want us to keep in mind that at the same time 777 has money people walking away from them, Najafi travels in the same financial circles as some of the most serious, even wildly successful, money men, among whom he and Moorad could easily (I believe) find partners.

Mark Murphy
27 Posted 12/04/2024 at 07:47:32
“When its liabilities (what it owes) exceed its assets (what it owns).”

Is Goodison Park one of those assets and what is it worth?

Tony Abrahams
28 Posted 12/04/2024 at 07:56:14
I remember Everton had plans to build a hotel, on the back of Goodison, Mark, and it got scuppered because there was already charges on the ground.
Colin Glassar
29 Posted 12/04/2024 at 08:00:54
After reading the related article in the Guardian today it’s quite clear, to me, that we are in a financial cesspit and the only way out could be declaring ourselves bankrupt and going into administration.

Only, imo, can radical surgery save this club from extinction now. All these groups hovering over the corpse like vultures need to realise that they will never be allowed to pick our bones. Let’s take the medicine and try and salvage something honest and decent from the remains.

Christopher Timmins
30 Posted 12/04/2024 at 09:26:27
The points deduction saga has been a distraction from the real game in town, the survival of our club. Monday's game will be a welcome distraction, particularly as it falls on the 15 of the month, a very important date in determining the future of the club.

Given our finances, I think that we might only because attractive to buyers in an Administration scenario.

Brent Stephens
31 Posted 12/04/2024 at 09:42:12
Colin #29 I fear administration. CitizenSuburbia suggest the following.

(d) The path to take, given all these questions and uncertainties, is to BUY TIME. You probably need a two year window for Everton's situation to resolve itself: - complete stadium; - remain in the PL; - visibility over future points deductions; - lower losses due to better cost control; - increased visibility/improvements in the club's state makes it more attractive to investors.

Jerome Shields
32 Posted 12/04/2024 at 09:54:14
Tony#1

Hopefully there are a lot more things in play before Administation and resulting sanctions.Moshiri needs to be gone. He is as incapable or least as unable as Kenwright of run a football club, if not worse.You could not have him near the place where a Coporate salvage job is needed.Hopefully this week will see the end of him.Creditors could demand his removal.

Moshiri is not fit to be a Director of Everton.The crunch for me, though only publically hinted at, was the inability to produce a Contract for the £20 million Sponsorship by USM Holdings, when asked by the Commission. Everton apparently admitted no paperwork was drawn up.Sanctions would not have prevented Everton for seeking payment under a legal Contract. This is gross negligence by a Director on top of other failures, especially around Cost Control, all which show he is incapable of running a Company business.

It is up to R&MF, MSP Capital and 777 Partners what happens, since they effectively own the Club.Even a administrator under administration would have to seek a solution with these parties.I don't think the Premier League would want to be part of the added burden of Adminstration and by their terms regarding 777 Partners takeover, have effectively forced Everton into a Creditors Management type situation.I don't think that Moshiri can force Everton into Administration since his shareholdings are collateral for loans from MSP Capital and 777 Partners, with MSP Capital having the upper hand, effectively backed by the Premier League.In a Creditors Management situation Premier League Ownership approval may not be officially required, since at the end of the Creditors Management period Everton would be sold on as a going concern to a new owner.

Two things that could prevent this are:

Moshiri decided to put in more money,or MAP Capital agree with Premier League approval to the 777 Partners extention,meaning 777 come up with the loot.

Of course relegation could tuck everything up.

Anyway it will all end with a Creditors agreement no matter what.

Dave Abrahams
33 Posted 12/04/2024 at 10:09:40
Tony ( various over the last few days) You're on holiday aren't you? Yet you're on here every bleedin' day.

Michael has asked me to ask you have you sorted his tickets out for the Luton game yet? Some bleedin' brother you!!

The good news is me and Michael have finished decorating Ava's room for her.

James Hughes
34 Posted 12/04/2024 at 10:23:23
Don't worry all, everything will be fine. I met a fella, whose best mate's cousin's, brother-in-law knows someone whose friend is connected to the club.

He said Moshiri has a cunning plan that was so impressive that a lawyer call Mr B Adder was in awe.

So chillax, everyone, and now I need to get this sand out of my hair…

Tony Abrahams
35 Posted 12/04/2024 at 10:24:36
I've been busy writing a play about our football club, Dave.

The title is easy, and there's also loads of unbelievable material, but after reading that the club needs to increase visibility improvements, I was just wondering if they have found the CCTV, showing Ms Barrett-Baxendale getting strangled by Oliver Jackson-Cohen?

Mike Doyle
36 Posted 12/04/2024 at 10:36:49
Tony 35,

I trust you'll find a role in your production for TW's resident thespian, Sam Hoare? (He might be available as a co-writer too.)

Paul [The Esk]
37 Posted 12/04/2024 at 10:40:34
Sorry I did not realise this had been published on ToffeeWeb. I will answer outstanding questions later today when time permits.
Jerome Shields
38 Posted 12/04/2024 at 10:50:19
Don @20,

100% correct. When Bill Kenwright sold his shares to Moshiri, the writing was on the wall some years before.

Everton were effectively overtrading, selling assets both on and off the field to keep going in the Premier League while running the club like pub team amongst mates.

Wages as a percentage of revenue were always one of the highest in the Premier League and the revenue stream was a joke for anyone who dealt with the various departments within Everton.

Normally in many such a situation, a 'Big Project' is sought in the hope of generating more cash-flow. But Everton under Kenwright could not even start one. By his own admission, he needed a billionaire. He got one through his advisor Philip Green.

Moshiri was the provider for the 'Big Project'. But the problem was that no amount of cash injection could turn around the already proven incompetent regime of Kenwright & Co and overtrading continued unabated.

The 'Big Project' started and was going to be the saviour of Everton by providing extra cash-flow. Moshiri proved to be equally incompetent and, bar a few attempts in 2021-22 to bring costs under control, lost control again in 2022-23 with glaringly ineffective cost control.

Christine Foster
39 Posted 12/04/2024 at 11:16:48
Jerome, they say the road to hell is paved with good intentions, but when it comes to Moshiri, what was his end game?

Because now it's pretty clear he never had one. He mouthed Kenwright's belief but, even in his funding of the new stadium, it was never clear what his intention was. Build a stadium, make money on the real estate? Sell on for double when the stadium is complete?

He was / is not a fan, he is an owner, but for the life of me I cannot work out his agenda, why he became involved at all... Unless he was and still is, the front man for Usmanov, who has seemingly given the whole thing away. Moshiri's interest has declined with the imposition of Russian sanctions... funny that.

Is he actually concerned about his money? Because at the moment it looks as though he will get a pittance if he is lucky.. One can only assume Usmanov has told him not to worry.

Peter Quinn
40 Posted 12/04/2024 at 11:18:20
Paul, you have in your usual excellent way set out the issues.

Clearly your view is 777 Partners are not the way forward. If however they had not put circa £180 million in to the club, we would now already surely be in administration, facing certain relegation and perhaps even bankruptcy.

So, as a very able accountant, what is your solution, if any, to the problems we face today? Yes, we all can blame Moshiri, Kenwright et al but where do we go from here?

We all now know the picture is very bleak and the article today in The Guardian only confirms this but is there a way forward or does this all mean those who have paid deposits for hospitality in the new stadium or purchased season tickets for next season face losing their money and those holding shares in EFC have share certificates which are worthless?

Is there anything positive you can think of or, put bluntly, are you now saying this is the end of EFC as we know it? Are we going from desperate times to oblivion… or is there a way out?

Dave Abrahams
41 Posted 12/04/2024 at 11:29:09
Tony (35),

Good idea Tony, any chance of me playing the part of Oliver Jackson-Cohen strangling Ms Barrett-Baxendale?

Denise can play herself, she'll do anything for money!

Martin Farrington
42 Posted 12/04/2024 at 11:41:43
Remember that we can't even sell Goodison. Kenwright sold off the land underneath years ago. I have no idea if it was ever repurchased.

Also, the new regulation for turning FFP into Subjugation regs were astonishingly approved by all 20 clubs yesterday. The 85% club earnings rule. It comes into force either next season or the one after.

Who from Everton agreed and why??? How the hell can we do anything other than break that new rule?

Stephen Davies
43 Posted 12/04/2024 at 11:50:48
This doesn't look good:

Everton paid £30m in interest to lender with links to tax exile, documents suggest

Brent Stephens
44 Posted 12/04/2024 at 12:03:27
Stephen #43, more muddy waters.

The more this goes on, the more that is revealed, the more Everton have made a bed that they now have to lie in. Who needs the Pemier League and Masters to take us down?

Martin Farrington
45 Posted 12/04/2024 at 12:04:19
Premier League: Profit and Sustainability Rules to remain next season ahead of vote change

The Premier League's current profit and sustainability rules are to remain in place for next season.

That is despite the fact that clubs agreed unanimously to change the rules in principle at a meeting on Thursday.

At present, clubs cannot report losses of more than £105m over a three-year period.

A vote on whether to move to a model adopted by Uefa, which permits squad spending to a ratio of revenue and player sales, will take place in June.

But with details still to be worked out, the current system will remain in place.

Everton and Nottingham Forest have both been deducted points for breaching the rules.

The Toffees have been deducted eight points in total, while Forest were docked four points.

Nottingham Forest manager Nuno says bottom of Premier League a 'mess'
Premier League clubs' £1bn of losses in 11 charts
The rules have been criticised by some for being overly prohibitive and for protecting clubs with greater revenues.

Under Uefa rules, clubs can spend no more than 70% of their revenue on squad costs - and at June's vote, clubs will decide whether they would prefer to move to a similar model.
Instead, it is thought an 85% limit is more likely, which the Premier League feels will allow for ambition at clubs who do not qualify for Europe.

The timescale on such a decision, though, means the rules will not change for next season.

And even if the details around squad cost regulations are agreed in time for the Premier League's annual meeting in June, they will initially be introduced in shadow form.

It is still to be decided how any transition would work and whether, as with Uefa, the Premier League would reduce to a final percentage over a period of time or whether it would be introduced immediately.

It is expected the principle of points deductions to punish clubs who exceed the limits will remain even if the new rules are brought in.

Christopher Timmins
46 Posted 12/04/2024 at 12:25:06
Given our trading record, I find it difficult to see how any entity that needs to borrow significant sums in order to finance a take over is going to be successful in obtaining the funding.

The risk element seems far too great.

Kevin Edward
47 Posted 12/04/2024 at 12:33:57
I'm firmly in the ‘they are all waiting to see if we get relegated or not' camp.

The Directors know that cash flows from the Premier League are crucial to the operations and debt servicing. So, if we go down as a result of FFP, or just being the worst team, then we are toast and administration will finish us off.

I can't imagine the new stadium not being finished at some point, but who will own it and who plays in it we will have to wait and see.

The amount of scrutiny that the club and owners (current and prospective) financials are under will probably flush out a few more skeletons while we wait.

Repayable loans I'm sure sometimes just get extended or amended so the saga may extend beyond any looming deadlines.

Stephen Davies
48 Posted 12/04/2024 at 12:36:51
Correct, Brent, it appears that points deductions may well be a regular occurrence (that's if we don't go into Administration).
Raymond Fox
49 Posted 12/04/2024 at 12:51:42
Very well explained, Paul, thanks.

To be fair to Moshiri, he has been severely let down by the so-called football people going back years. He spent a great amount of money on players who, with some exceptions, were not good enough for us to progress up the League.

Then he has the expense of our new stadium nearing completion which has cost an absolute fortune.

It’s the stadium which might sink us.

Laurie Hartley
50 Posted 12/04/2024 at 12:57:11
Paul - I would like to add a second question to the one in my post at # 24.

It is a bit “out there” but here we go:-

Could MSP, R&MF, and 777 partners form a consortium to take over the club, each taking a shareholding, and representation on a newly formed board, based on the proportion of debt each entity is owed?

Colin Glassar
51 Posted 12/04/2024 at 14:54:40
Tony @35,

Any chance of Kenwright getting a role in your play? He could play Jacob Marley or Casper.

Jay Harris
52 Posted 12/04/2024 at 15:16:54
Mark #27,

I believe Kenwright raised a mortgage of £15M on Goodison together with all the other assets he sold or mortgaged..

It is a stain on our history that that man was ever allowed to run our club.

Mark Taylor
53 Posted 12/04/2024 at 15:47:52
Paul, a question for you, or anyone else.

Would it be reasonable to assume that all of the 3 interested parties here, R&MF, MSP and 777 Partners are likely wishing they had never got involved? (I'm assuming that would be pretty certain for Moshiri!)

Do any of them have any kind of angle that gets them all their money back, if not safely, then at least with a decent chance?

It seems from what you have said about the loan agreements, that MSP might have the best chance, maybe even taking on the stadium for their £150m or so, if we went bust. But I imagine the other creditors might have a say about that and they might also not have an anchor tenant.

Of all of them, it's R&MF who perplex me. They have a lot of money at risk, yet blocked the supposedly more credible MSP in favour of the supposedly basket case 777 Partners. Why on earth would they do that? Who are they?

Anthony Day
54 Posted 12/04/2024 at 16:10:00
The Inescapable Reality of Everton's Directors is that they are either not fit for purpose or are fit for purpose but cannot act accordingly due to the owner.

Graeme Sharp is a club legend who took on an executive role out of loyalty to Everton. He deserves no criticism for choosing to do this (that belongs to those who appointed him).

Can you imagine any other Premier League team taking a club legend (with no corporate experience) and putting them in such a position? Anyone envisage Shaun Goater appointed to the Man City Board? Gazza on the Tottenham Executive team? Of course not, it's laughable!

It is just further evidence of how those who ran/run the club had lost total sight of their commercial, legal, financial and statutory responsibilities that come with being a Custodian of Everton FC.

James Flynn
55 Posted 12/04/2024 at 16:21:59
R&MF was watching 10s, then over £100 million floating all around them, but none of it planned to land on them. Even though they were first in line for debt payment.

They were willing to compromise if, as reported (rumoured anyway) they received a check from MSP in the high 10s of millions (£85-90 million?). MSP decided not to, which left Moshiri in a precarious position.

777 Partners jump back in and, on 15 September, R&MF's law firm trumpet a deal between R&MF and 777 Partners, Moshiri submits a new charge with R&MF, then Moshiri and 777 Partners announce their deal.

What MSP thought not their best move, 777 Partners jumped right in and cut the deal with R&MF; whatever that deal was.

Stephen Davies
56 Posted 12/04/2024 at 17:12:11
More EFC News (this time from Bloomberg):

Miami-based 777 held talks with private markets investor Blue Owl Capital Inc.about arranging a £360 million ($452 million) loan tied to the club's new stadium, said the people, who asked to not be identified because the details aren't public.

777's months-long pursuit of the Liverpool-based club hinges on repaying a £158 million loan to a group of investors led by MSP Sports Capital, a rival sports investor. MSP's loan is due to be paid on April 15. If the loan isn't repaid, MSP could take ownership of Everton, according to the people.

A deal with Blue Owl would help 777 repay MSP, though the people cautioned that a deal with Blue Owl is currently unlikely and discussions could end without an agreement.
New York-based MSP was originally in talksto make a direct investment into Everton last year, but withdrew after opposition from Rights and Media Funding Limited, one of Everton's existing lenders.

It is unclear whether MSP will enforce the conditions of the loan if it is not repaid. Earlier this week, 777 asked for more time to complete the takeover and pushed back the target date to the end of May.

Representatives for 777, Blue Owl, and Everton declined to comment. MSP did not respond to requests for comment.
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Everton has become heavily indebted after its current owner, Farhad Moshiri, ramped up borrowing to pay for high-profile players and build a state-of-the-art stadium in Liverpool's Bramley Docks.

Since agreeing to take over Everton last September, 777 has been funding the club's day-to-day financial needs, including keeping construction going at the new stadium. It has loaned Everton over $100 million to keep the club running, according to people familiar with the matter.

The Premier League said they were ‘minded to' approve 777's takeover last month, but added a number of conditions, including the investment firm's ability to repay various loans.

Jamie Crowley
57 Posted 12/04/2024 at 17:43:55
Stephen -

So 777 is borrowing, yet again (!!!), to facilitate their financial obligations.

Shocker.

777 is just nuclear-toxic. I'm praying MSP obtains the 51% shareholder majority and basically realizes they've obtained ownership of one of the largest sport brands and institutions in world football for $158 million. Then with their far vaster resources continue to invest and payoff debt - basically start running the Club.

Long shot, but that's gotta be the hope. If 777 Partners take over, we are screwed.

Ed Prytherch
58 Posted 12/04/2024 at 17:47:31
I don't believe that 777 partners will raise the funds they need to pay off MSP. US state regulators have told insurance companies to pull their investments in 777 who shuffle money around between offshore entities to obscure their true wealth. I cannot see even the shifty outfits they deal with putting that kind of money at risk.

My guess is that either Kenwright or Moshiri influenced R&MF to block the MSP equity investment. I don't trust any of these offshore outfits.

Mike Gaynes
60 Posted 12/04/2024 at 17:56:14
Tony #7, all of me is convinced that this is a 100% Moshiri transaction. It's my understanding that the gentleman who is no longer with us was not active in the club during his final illness.

There is much to blame him for, but this current mess is not on the list. Neither is Moshiri's worst decision, which was hiring Rafa -- the aforementioned gentleman was strongly opposed.

Laurie #50, I doubt it. From the limited information available, it would seem unlikely that MSP would partner with 777. There was a published allegation last year that MSP has had previous interaction with 777 and wants nothing more to do with them.

My personal, passionate hope is that, when the smoke clears, MSP owns the club. As I have said here many times before, they are smart, principled people.

Christopher Timmins
61 Posted 12/04/2024 at 18:19:54
Mike @60

I am not sure we would be in the financial mess that we currently find ourselves in if Moshiri's worst decision was the hiring of Rafa.

The financial damage was done and dusted well before Rafa arrived into town. He was here for less than a season and he purchased a few basement buys during his tenure and that's about it. He also brought Gordon back into the fold after a pretty uninspiring loan spell.

Paul Birmingham
62 Posted 12/04/2024 at 18:45:28
Colin a work colleague, messaged the link to the Guardian article early this afternoon. It's a sombre statement of the facts.

I'm praying for a miracle..

Can MSP, get control next week, and then design a new ownership structure for EFC and the new stadium?

Both scopes of ownership, without 777, as they will surely finish off Everton Football Club. How 777 have progressed so far with their takeover plan, God only knows.

I reckon there's a lot worse to surface, but we shall see. Fiscally how does 777, do their books... They don't have any books.

A frightening reality check.

Mark Taylor
64 Posted 13/04/2024 at 01:00:27
I have a very strong feeling next week is going to be pivotal in the life (or possibly death) of our club.

I am at a loss to understand how any of the parties can make money out of this unless somehow MSP can contrive to cancel all the debt.

Eric Myles
65 Posted 13/04/2024 at 12:49:57
Laurie #68, it's not new news, investments have been dealing in this way for years, and will continue unabated.

There's even a good chance that Blue Owl or TA's 'White Knights' source their funds from exactly the same source as 777 Partners.

It's not like anyone has £1 billion in cash stuffed in their mattress, except maybe Ken Dodd?

Tony Abrahams
66 Posted 14/04/2024 at 15:25:58
I think Moshiri's worst decision was not telling Usmanov that he didn't want to work with Bill Kenwright, Mike @60. I remember being told that it was Usmanov and not Moshiri who had told Bill Kenwright to be quiet during one Zoom call. A story I believe to be true.

I remember a Liverpudlian boasting about having all ex-Everton players at his house a few weeks before Bill Kenwright died and he told me Mr Kenwright was having a bit of banter before answering a question that was posed to him, by saying, "We don't want to sell, but the pot is empty."

All hearsay and conjecture, Mike, but I think Bill Kenwright was involved until the end, and I also have a sneaking suspicion that MSP and this other unnamed American investment group might have been turned down because it would have been the end of Bill Kenwright.

James Flynn
67 Posted 14/04/2024 at 16:46:04
777 keep books. They don't want the league to see them, though.
Ed Prytherch
68 Posted 14/04/2024 at 19:33:01
James,

By shuffling funds between various offshore entities, 777 Partners make it hard for anyone to see the big picture.

Charles Ward
69 Posted 16/04/2024 at 08:59:23
Ed nothing new there. Kenwright was doing it for decades with the likes of the BVI off shore funds, Philip Green etc.

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