Just over six years ago, I wrote a piece about Farhad Moshiri and him kicking the can down Goodison Road (here). Never in a million years did I think in 2024 the charge would still stick. In fact, not just stick but become something that, if chargeable, would see Moshiri become a multiple offender.

The protracted potential sale of the club (to the most unsuitable partners) exemplifies this most baffling of characteristics. Announced on 15 September 2023, initially thought to be completed in “10 to 12 weeks”, we have had numerous briefings as to the likely completion date. In the midst of this, investigative journals such as Josimar, my own analysis, and valuable contributions from the media including the FT, Bloomberg, The Athletic, New York Times, Washington Post, the Guardian, The Times and many others as well as insurance trade journals have built a compelling body of evidence as to why it wouldn’t happen.

In the meantime, through various PR agencie,s Moshiri and 777 Partners have insisted it would. Moshiri, never the most willing nor (it has to be said) capable of communicators, has treated the Everton fanbase with utter contempt. Faced with the PSR points penalties and a largely uncompetitive squad, this last season would have been difficult enough without the associated ownership and financial issues surrounding the club and the lack of communications to their most important stakeholders.

The Fan Advisory Board requested a meeting with  Farhad Moshiri in February which was ultimately held in mid-May. In the meeting, it is reported that Moshiri apologised for the delay in engaging with the Fan Advisory Board and for the lack of regular communication with fans generally, insisting whilst bound by the terms of the share purchase agreement (SPA – valid until 31 May 2024) he could provide no detail of the status of the proposed sale to 777 Partners other than he had been approached by other parties regarding the sale of the club. 

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It seems extraordinary to me that, under Moshiri’s ownership (I am ceasing to use the word leadership any longer), we find ourselves in the position we are in.

Moshiri claims that, up to 31 May, he can’t talk to other parties because of the share purchase agreement. No doubt, back in the late summer of 2023, when this deal was cobbled together, 777 Partners will have insisted on such a provision given that they were (as they hoped) funding cash flow for a short period in expectation of a speedy approval.

As we all now know, that approval has not been forthcoming, not as a result of the Premier League per se – (although the Directors and Owners Test is surely not fit for purpose), but as a result of 777 Partners' inability to meet the initial requirements and then the further requirements, the so-called “minded to approve” conditions at the end of March 2024. 

Throughout this period, 777 Partners’ already poor initial condition at the beginning of the process has deteriorated markedly (as predicted) to the extent that they have gone from an organisation boasting (at least claiming) initially perhaps $10 billion or more of assets, albeit with a reputation for tardy or non-payment of bills and some questionable business practices, to the point that they have:

 (i) Had to appoint their own corporate restructuring advisors; 

(ii) Had to dispose in a fire sale of multiple assets and/or have assets clawed back by their previous backers, A-Cap; 

(iii) Seen their principal Partners, Josh Wander and Stephen Pasko, step back from running their businesses; and, perhaps most damaging of all, 

(iv) They face serious civil allegations (among others) in the Southern District of New York Court, of double pledging assets, real or otherwise, as security for loans to London-based Leadenhall Capital whilst knowingly having pledged the assets to A-Cap and others as collateral against their loans. 

All whilst continuing to draw down funding from A-Cap (and associated parties) to keep Everton and their proposed purchase afloat. All-in-all, a considerable stretch from Moshiri’s initial justification – claiming they remained the “best partners to take our great Club forward, with all the benefits of their multi-club investment model”. 

Everton’s ability to remain in business, to remain a going concern, has been dependent on the provision of loans from 777 Partners and furthermore, the additional goodwill of several creditors in extending existing loan agreements – the denial of such extensions would have placed the club into administration. 

The question is, what happens when the share purchase agreement (SPA) lapses on 31 May 2024?

The simple answer, initially at least, is probably nothing. The cash-flow issues and capital constraints upon Everton, of course, continue. June is a difficult month for the club. We have considerable trade creditor payments to make, we have to meet any operational cash-flow shortfalls including interest costs, and must continue the Laing O’Rourke payments regarding the stadium. 

However, the transfer window opens mid-June and represents an opportunity (not welcomed by fans) to sell players. It’s a difficult balance and, in footballing terms alone, difficult to justify, but sadly cash-flow and PSR compliance means sales are inevitable before the end of June. 

All of the above assumes the continued support of Everton’s existing creditors, including MSP who are beyond their original mid-April (subsequently extended) repayment date. 

With regards to selling the club, the ending of the share purchase agreement should open the doors to other bidders (those waiting in the wings) to formally approach Moshiri. However, given the deterioration of Everton’s financial position, the prospect of any buyer offering Moshiri anything like the terms proposed by 777 Partners (and confirmed by the Premier League’s previous “minded to approve” conditions) seems minimal if not impossible. 

Much however, will depend on the terms within the loan agreement between 777 Partners and Everton, as to what happens once the SPA lapses. Equally what happens in the New York Southern District Court may well determine what happens next. To the creditors of 777 Partners (ie, those who are owed monies) the loan provided to Everton represents an asset.

It is important, not least to GlassRatner Advisory & Capital Group, LLC dba B. Riley Advisory Services, 777’s appointed corporate restructuring advisors, and to A-Cap (the originator of the funds provided by 777 Partners to Everton) that this loan is not seen as impaired in any way.

Papers presented to the Court suggest that 777 Partners assets are as little as $3 billion (a figure provided by A-Cap). $609 million is owed to Leadenhall, $185 million to a subsidiary of Credigy, numerous other creditors and independently, I believe A-Cap has provided as much as $3 billion in loans and unspecified funding. Assets have been sold or re-captured by A-Cap, yet from a distance, their exposure to 777 Partners et al is significantly greater than the sums likely to be recovered.

Difficulty facing incoming purchasers

The extent of Everton’s indebtedness is a real barrier to a future investor or purchaser. Any incoming purchaser will not countenance paying all outstanding debts and providing the future working capital required.

People point to the gleaming stadium nearing completion at Bramley-Moore Dock as an asset set to attract investors. However, it’s only an asset when paid for. There’s a huge difference between paid for and financed. The truth is that, in combination with all the accumulated losses, the stadium has been financed using short-term, unsustainable debt.  Everton’s on-going debt burden is greater than the debt the stadium can sustain. A debt burden significantly increased by Moshiri’s choice of 777 Partners as would-be investors.

So, what will happen?

Sadly, and frustratingly, I can only see the can being kicked down the road, albeit for a small number of months – 3 perhaps?

Moshiri may blindly hope 777 Partners can somehow acquire the club. The reality is (as I have said since day one) that that is not going to happen. Everton’s creditors are reluctant to pull the plug – for different reasons. 

Incoming investors, not only those of the vulture kind – we can do better than that, will not want to carry the existing debt burden given the Capex still required, so not only does Moshiri have to take a total write down of his unsecured shareholder loans, other lenders – of which 777 Partners are the most vulnerable and therefore will carry (after Moshiri) the greatest losses, must feel some pain too.

Despite all of the above having been obvious for many months, the reality has not hit Moshiri. Player sales in June will forestall any thoughts of administration; however, avoiding administration is hardly the standard or expectation our club should set itself.

If we don’t want to see another exercise in can-kicking – which (as proven) benefits no-one, least of all the club – Moshiri has to be decisive and use the end of the SPA to conclude a deal with credible buyers. He and other creditors, including 777 Partners, will lose money, but that’s because of their poor judgement, nothing else.

In the meantime, we have a football club to be run properly and, as always supported to the n-th degree by its true custodians – the fans.

Reader Comments (24)

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Hans Fyhrqvist
1 Posted 27/05/2024 at 01:06:23
Everton secured their place in the Premier League after a great run-in. The players, manager, coaching staff and supporters made it possible and can be proud of the achievement after all the difficulties during the season, especially the points deductions.

Now the owner of Everton, Farhad Moshiri, must follow suit. From 1 June, his duty is to find Everton a new owner which is stable and trustworthy. After so much financial mismanagement during his tenure as Everton´s majority shareholder, he should in this takeover process at last show that he is an accountant. And that for the good of Everton, not himself. If he must take a big financial hit, then it´s self-inflicted.

Farhad Moshiri, although an instigator of our new magnificent stadium, and we thank him for that, ought to understand that his legacy in the history of Everton will be defined by how he handles and concludes this takeover issue. And if Mr Moshiri is at all a man of honour, he should in this matter respect and take into account the views of Evertonians, the core of our great club.

Christine Foster
2 Posted 28/05/2024 at 05:07:07
Paul, depressing isn't it?

I cannot help feel there is far more to this than a simple loan-to-equity deal gone wrong. 777 Partners will (should) almost certainly have a fallback / get-out-of-jail clause, should they not meet a purchase price or agreement.

Whether it's a short-term loan repayable, long-term loan, or option for equity, it can only be in the detail. Otherwise, it's a mug's loan. No security? After laying down £200M+? Honestly must be something in the detail we are not privvy to.

Who would loan money to 777 Partners under those conditions? Who is backing them and continuing to back them if not A-Cap? Unless it has nothing to do with A-Cap or their normal investors. (Unless of course 777 Partners really are a bit dodgy?)

Isn't an alarm bell clanging somewhere?

Tell you what, Paul, if 777 Partners suddenly find the money from an unknown to purchase, we may wonder if the transaction was in rubles!

Phillip Warrington
3 Posted 28/05/2024 at 05:25:11
I still can't understand why no court action could be taken against Farhad Moshiri? After all, he wanted to buy the club… hasn't he neglected his duties as an owner of a football club by not using his money and running the club in a standard model for a football club?

As the registered owner of the club, he is now plundering the club deeper and deeper into debt by using the club to gain loan after loan while he does nothing to change that situation.

Jerome Shields
4 Posted 28/05/2024 at 07:40:00

Moshiri's 'kicking the can down the road' could simply be he cannot make a decision. He is a Muppet set up with all the trappings of a billionaire, but in reality he is nothing more than a messenger boy in an office, with an accountancy qualification and three passports.

From a Everton context, nothing makes sense. But as an extensive money-laundering operation, it does. But to do so, the extent of it would have to be believed, which is an enormous stretch in credibility.

All the parties involved have unknown investors, many from offshore origins. The Everton known assets are all shocked out either by charges or confidential agreements. The ownership of the 200-year lease on Bramley-Moore Dock is unknown, Everton being tenants on 40-year lease for part of it.

So where is the intrinsic value? The value is in the Everton debt which has probably been sold on as part of debt packages which has been securitized to give it as high a debt rating as possible, to be sold to investors such as offshore Investors, foreign investor groups, pension funds, crypto funds and financial trading houses.

Much of the ownership is unknown due to the institutionalized (particularly so in the baby boomer pensions industry) and offshore confidentiality or lack of government regulation. We do not live in the captial age, we live in the age of creditism. Even so-called cash can have layered credit support.

Everton is obviously not run on sound management principles and there has been no interest in doing so for years, and it is the case even now. The value was always in finding a greater fool. Football was a entertainment sideline.

On and on we go.

Christine Foster
5 Posted 28/05/2024 at 08:06:33
Jerome, I get that, all of it, I really do.

Having spent a considerable part of my life dealing with Blue Sky investors and overseas funding, it's clear to me that this goes way beyond what the norm is.

Many wealthy investors are happy to take a punt for a few million if the rewards are there, but, and a really big but, the debt ratios are a killer, the returns are just not there to justify the level of debt and return on investment.

Long term? That's a high risk based on us staying in the Premier League too chancy. This is more to do with the real estate and redevelopment around the dock area. Bit like Peel Holdings buying up on speculation years ago, but in this climate, spreading the risk across many just doesn't add up.

If, as 777 Partners have done previously, pension funds are raided, there is no way in heaven and earth that there will be any undue risk to pension funders! Especially US ones.

So, if the money miraculously appears to buy us, you can put money on a single wealthy investor or state who wants the club for status, wealth creation, or part of a much larger portfolio.

I suspect the money 777 Partners raised was done so outside of their normal model. When all around them is falling to pieces, they still found the cash to drop into our kitty?

Yeah, I know, its all speculation... probably all bullshit... but you know the old saying "If it walks like a duck..." Just the hairs on the back of my neck...

Jerome Shields
6 Posted 28/05/2024 at 08:47:01
Christine, it is very high risk, but a drop in the ocean of world finance. From what I have gathered, there is at least four more years of mileage in it, but normally it can go on at least two years after that. I am currently offloading as fast as I can.

The International Media interest is built on the underlying financial story aspect regarding Everton. A new Everton owner is pie in the sky, it will take corporate recovery experts negotiating haircuts and restructuring, something Paul The Eek asked for 2 years ago.

The Premier League is powerless and government regulation will be on the never never. Budgetary control at Everton is being dictated by PSR, inclusive of administration; otherwise, Everton is not interested in budgetary control.

There is a underlying "tuff it out" attitude. Much of the money put in largely does not matter, having original questionable value, it is the money that can be got out. That is where the value is. Everton has been run this way for over 30 years.

Reasonable solutions will be put forward but all facts are unknown, even by the protagonists themselves.

Tony Abrahams
7 Posted 28/05/2024 at 08:57:54
I got told it was murky, murky, murky, but I didn't realize it was also very fucking congealed.

Hopefully someone is working on evaporating the fatberg (I've heard many times that there is) but those high=interest loans are not only killing us, they are also lining the pockets of others, so my guess is that not everyone will be wanting this to suddenly en.

You can possibly understand why Moshiri put Brands on the board now but, when you're only a frontman and not really around much, then the mice just reproduce and get along fine without you!

Usmanov is going to lose another fortune at a time when the sanctions must be causing him massive headaches and loads of anger. He must be fuming, but hopefully he realizes that “most” Evertonians are good people and loads of them were tucked-in by the same fella, meaning we have got a lot in common really!!

The Premier League must also surely be getting ready to call time on this charade between Moshiri and 777 Partners? (Possibly not…)

I think we have all definitely had enough of this daily medication time so hopefully Usmanov takes his haircut and decides it's time to let everyone move on.

Tony Abrahams
8 Posted 28/05/2024 at 09:02:09
It is the money that can be got out. This is where the value is, and it's the way Everton have been run since the saviour, came into power.
Mal van Schaick
9 Posted 28/05/2024 at 09:05:29
Supporting Everton is more dramatic than all of the soaps put together.

The fans did not write this script, as all we ever wanted was to be solvent and successful, as a club and a team, and yet the fans find themselves witnessing the demise of the club, and potentially, the sale of some of our better players. Yet another backward step, and the story doesn't finish here.

We have 777 Partners as potential buyers, but they can't get the show on the road, for various business and financial escapades, and then John Textor appears on the scene, maybe with an investment? Of what size or proportion is anybody's guess?

I would rather see 777 Partners fail in their attempt to buy Everton, and Textor may play a part as an investor?

Talk about last-minute com, we have a few days to stave off interest in our better players, and a few weeks for any other bids to emerge.

The drama and saga continues.

Martin Farrington
10 Posted 28/05/2024 at 09:15:37
Having seen many movies regarding corporate theft and fraud in all its different guises over the years, I consider myself somewhat of an expert. More so than the hapless Moshiri. Therefore I can safely say that 777 are shysters.

I can't help but joke. The whole thing is way beyond serious and scary. The Esk is spot on. There is no positive answer staring the club in the face. We owe the most money of any club. However, a vast chunk of that debt is the new stadium.

We are being punished by the Premier League for improving its appeal, for which no other club who did the same were held accountable for, let alone tarnished with points deductions. That huge debt is the responsibility of the present incumbent and those recently departed from its board. In one case, literally.

I truly believe that all of that person's borrowed fake Faberge eggs were placed in the one basket. No Plan B after the golden goose was exiled.

It does say something that Moshiri has kept the stadium build going under unbelievable financial strain. Furthermore, he has managed to get numerous parties to part with hundreds of millions. The club too.

The sale is a complete head spinner. Like "What the Fuck?" In a global financial storm, we are akin to Oliver Twist. We owe almost as much as Arsenal, Liverpool and Man Utd combined (source: Onefootball Club Debt 2024) but have had the worst ride in terms of footballing success ever to get to this all-time low.

What is going to happen to us in future terms bewilders the experts. Crowd-funding, anyone???

Larry O'Hara
11 Posted 28/05/2024 at 09:17:52
Paul, this is all very worrying, but thank you for all your work here and over the years trying to piece together the pieces of this shattered jigsaw.

As you say, on one level, Moshiri's antics are inexplicable: which shows something very dodgy is going on.

If we could get away with selling Onana (and giving Maupay away to a circus) we will have done well.

On a related matter, what do you make of this Textor guy? Who has been very disrespectful to Palace — that's for sure.

Sam Hoare
12 Posted 28/05/2024 at 09:41:33
It feels like things may have to get a lot worse before they can get better.

If, as Paul suggests, the only way forward includes creditors taking massive haircuts, then I suspect we may need to teeter right over the edge of administration before they are forced into losses. Perhaps we are there already?

It sounds as though there are at least committed Evertonians like Andy Bell and George Downing working behind the scenes now to try and facilitate an outcome that serves the club as much as the vultures.

Such a shame that the great work of Dyche and the players will have only managed to buy us an inch of breathing space rather than a solid platform on which to build. Selling our best players just to service the debt is really an indictment on what has transpired at Everton over Moshiri's tenure.

Tony Abrahams
13 Posted 28/05/2024 at 09:42:29
Completely off subject, Larry, and because it's very hard to keep up with everything that gets published nowadays, but why has Textor been very disrespectful to his club, Crystal Palace?
Denis Richardson
14 Posted 28/05/2024 at 10:12:21
Lot of doom and gloom. Also been a lot of doom and gloom for a few years now and we're still here and standing. Trying to see the positives:

A) We're still in the top league and whilst we stay there are guaranteed a minimum of £130M a year in TV money alone,

B) We will have a brand new amazing stadium open in 12 months time, which will also be able to generate income above and beyond the usual match day receipts.

C) We have a few players who are worth well over £50M (Branthwaite, Calvert-Lewin, Obana etc …apparently!)

The debt mountain is unsustainable but surely there is a way to consolidate some of it against the stadium (once complete) and refinance at a much lower interest rate. The current all-in cost in interest is eyewateringly high (and the lenders are no doubt happy to keep getting paid).

There's no magic bullet. First, the debt needs to be managed then work gradually to reduce it and increase revenues on the other side, ie, run the club professionally, which has not been the case for several years.

What no one on here has any idea about is what is really happening behind the scenes. Who are the real holders of the debt (not just the corporate fronts)? To what extent is Usmanov still involved? (I'd be very surprised if he's not in touch with some or all the lenders — he may well be one of them!)

Lots in the shadows which may never come to light but we'll still be here when the new stadium opens.

Larry O'Hara
16 Posted 28/05/2024 at 10:17:37
Tony (13),

He is recorded as saying it is great that Everton is outside London and a fallen giant, it would be great to see rise again.

If I was a Palace fan, I would take exception to that.

Jerome Shields
17 Posted 28/05/2024 at 10:24:16
Purely in football terms it's about a hodge podge team with a formula coach on a very limited budget being robbed of talent with a dedicated DNA fanbase of Evertonians. Something one person in particular wished to be part of and never was.

What is being achieved football-wise in all fronts, and is continuing, is remarkable by any standards and it is the most likely aspect that will win through in the end, no matter what happens off the pitch.

As for the rest, we can do little but try to know more, which in itself will keep us going. The financial world is marvelling at this aspect. The team needs Evertonian support more than ever.

Prophecy is an affliction of the articulate, and probably the inarticulate in my case, but out of frustration and despair, both transient things, Evertonians will be reborn with new words and new power. This is something that we all can have confidence in.

Tony Abrahams
18 Posted 28/05/2024 at 10:48:15
Thanks, Larry.

I suppose I still take exception to Margaret Thatcher, and her plans for a managed decline of our wonderful city!

Pat Kelly
19 Posted 28/05/2024 at 10:54:05
There are too many fingers in the pie. Meanwhile, we're still waiting for Moshiri to get his finger out.

The only rationale for new investors is a return on their capital. It's hard to see where any profit can be made on new investment, given the Club's existing debts far exceed its assets. Future earnings are uncertain and depend largely on staying in the Premier League.

Our ability to do that is being increasingly compromised by the debt burden, forcing player sales and further increasing debt. We will eventually run out of road to kick the can down. The investors can't play chicken forever. Administration is the next stop.

John Hall
20 Posted 28/05/2024 at 12:24:10
The Oligarch has multi-billions stashed away and still maintains his lavish lifestyle. Moshiri is holed up in his favorite and very very expensive Monaco pad.

Who would have chanced lending the crooks that run 777 Partners over £200M with no security or assets required?

Quite clear who is lending them the money in order to try and get back as much as is possible from their initial investment.

Seems there is no hurry to get a deal done as is exemplified by the many months kicking the can down the road.

Moshiri and his dosh or Usmnv's dosh is safe as houses whilst waiting for the deal to be agreed, hence no other parties involved in genuinely trying to scupper the gentleman's agreement they have with Josh and his dodgy mates.

Recovering as much as is possible is simply a waiting game for those who control the purse strings and who care nothing about our club.

Peter Hodgson
21 Posted 28/05/2024 at 12:45:27
I did pose the question in a different thread (777 Partners look to offload Standard Liege – Post #13) on the same day as The Esk posted his much longer synopsis.

I mentioned that, looking at their respective track records over the past 8 months or so, that everything was possible. It was partially said tongue-in-cheek, although given their past records, anything was possible.

Will it – won't it? Not long to wait now, Hope not, fingers crossed

Ed Prytherch
22 Posted 28/05/2024 at 17:00:29

777 Partners are being prosecuted for overstating their assets, that is how they fraudulently got their loans from insurance companies.

Trump was successfully prosecuted for similar actions in New York.

Adrian Evans
23 Posted 28/05/2024 at 20:04:34
John Texter sounds like he's too good to be true.
That said, Everton would be his biggest football club. But the Belgian side got relegated and the pans heard nothing.

I read they look at stats, data, players, teams. That's all very good, but we won against Forest, Liverpool, Brentford?? That wasn't in the stats. Nor was Man Utd beating Man City at Wembley.

Well we won nowt the old fashioned way… maybe his football club can bring back glory, success. Just get rid of Moshiri, the creditors, debt, give us a decent squad, and have stability for a few seasons.

No stress, mid table above, win 12 home games draw 4, lose 3, that would do me. Make the move, all calm and steady, good football.

Can this man deliver us into a successful modern era of football? I am praying he can.

Greaser Garcia
24 Posted 29/05/2024 at 14:32:22
I agree, stability and sound management is what Everton need right now.

Let's hope John Texter can lead us to new heights.

Raymond Fox
25 Posted 30/05/2024 at 14:53:31
The financial difficulty is the result of Usmanov being forced to disappear. Moshiri wouldn’t have started to build the new stadium if he knew Usmanov would be black-balled. That’s the only thing that makes sense to me.

If we manage to survive, we can at least thank him for a great new stadium. Sure he's made some strange and bad decisions but hes been let down by most of the football 'experts' he has employed.

He and/or Usmanov gambled big time but the gamble has not paid off, unfortunately; it happens.

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