Everton’s potential new owner 777 Partners is facing a new lawsuit after an investor launched legal proceedings claiming damages of more than $30 million (£23.6 million).
The American company is being sued by the British High Court for $28.5 million over alleged unpaid aircraft leasing costs.
Now Athletics reports this that according to a subpoena filed in New York last week, Change Lending LLC invested $17 million (£13.4 million) in 777 and its sister company 600 Partners in two tranches of preferred stock in September 2022 and February 2023.
Under the terms of the deal, if 777 were to fail to provide the requested financial information to Change, or if there were “reputational risk,” Change could have 777 repurchase the preferred shares at the same price , plus any unpaid dividends.
The subpoena claims there is “no dispute” about the breach and details Change’s efforts to get 777 to provide financial statements, including an audited balance sheet of the company’s assets.
A potential takeover at Everton moved a step closer last month after 777 Partners’ bid was approved by the Financial Conduct Authority (co-founder Josh Wander pictured)
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Frustrated by “delays and excuses,” Change told 777 it was activating its buyback rights in September 2023.
In the court document, Change suggests that 777’s “failure and refusal to provide audited financial statements and other material financial information to counterparties appears to be a pattern.”
Citing media reports of 777’s proposed takeover of Everton and takeover of Belgian side Standard Liège in 2022, Change says questions have been raised about 777’s ‘business practices’ and the source of the money it uses to make these investments.
In summary, Change says it “determined that the 777 Entities were in an unsatisfactory financial condition” and that 777 “exposed Change to unacceptable reputational risks.”
As a result, Change is entitled to ‘compensatory and consequential damages’ and all legal costs. 777 must now respond to the complaint within twenty days of January 9, the day the summons was served.
777 Partners are also being sued for $28.5 million (£22.4 million) in the UK High Court over alleged unpaid aircraft leasing costs.
Everton were suspended 10 points earlier this season for breaching Financial Fair Play rules
777 Partners, whose investment portfolio includes sports, insurance and aviation, are being pursued by Irish companies Corvus Lights Aviation, Columba Lights Aviation and MAM Aircraft Leasing of four aircraft previously operated by Canadian airline Flair Airlines, a regular part of the 777- investment portfolio .
In March last year, four aircraft leased to Flair – three Boeing 737 Max 8s and one 737-800 – were repossessed due to outstanding fees, leading to operational problems for the airline. As a result, two notices of default were issued to Flair.
Following these seizures, 777 Partners initiated legal action themselves in a Canadian court in Ontario, seeking $37 million (£29 million) in damages from Airborne, the intermediary company that managed the leases on behalf of the three companies pursuing 777 in the High Court. Court. The pursuit of damages relates to 777’s claims that Airborne’s seizures had negatively impacted flight operations and caused reputational damage. That legal action is still ongoing.
777 typically declines to comment on active cases but has strongly denied all allegations of fraud.
A potential £500 million takeover at Everton recently moved a step closer after US investment firm 777 Partners’ bid was approved by the Financial Conduct Authority (FCA).
Everton boss Sean Dyche has admitted he does not expect to do much business in the January transfer window amid ownership and financial uncertainty at the club.
The Toffees were deducted ten points by the Premier League for breaching FFP rules in November, but bounced back with four straight wins before losing their last three games.
Everton’s future owners 777 Partners have been hit with a transfer ban at Standard Liège (photo)
Despite the threat of relegation, finances remain tight at Goodison Park, amid construction costs for their new stadium at Bramley-Moore Dock, losses in recent years and uncertainty surrounding 777 Partners’ proposed £500 million takeover of the club, which is still awaiting approval.
One of Everton’s future owners’ clubs, 777 Partners, has been handed a transfer ban.
Belgian Pro League team Standard Liège was placed under a transfer embargo by the country’s football association after failing to make transfer payments for two players.
As reported by the Liverpool Echo, the two transfers in question are that of Ilyes Ziani from Union Saint-Gilloise in May 2023, as well as Aron Donnum, now at Toulouse, who signed from Norwegian side Valerenga in 2021 – a deal that was completed before 777 . Partners took control of the club.