Scottish Premier League side Livington is in advanced talks with two groups of potential US investors
- Livingston is in advanced negotiations with potential US investors
- John Ward claimed last month that a civil war in the boardroom was scaring off investors
- A courtroom battle is underway to oust the current board at the Tony Macaroni Arena
Livingston is in advanced negotiations with two groups of potential investors from the United States.
Lions chairman John Ward claimed last month that a civil war in the boardroom has prevented investors from pouring vital funds into the cash-strapped Premiership club.
And court documents seen through Mailsport claiming that the inability to attract money to the club would lead to ‘greater financial problems’ and increase the likelihood of Livingston becoming ‘insolvent’.
Former CEO Carolyn Sumner and ex-VP Neil Hogarth are locked in a courtroom battle to unseat the current board at the Tony Macaroni Arena.
Sumner, a shareholder of the club’s parent company Opcco6, has enforced an injunction barring directors from issuing six million new shares, which she says would prevent shareholders from “exercising their legitimate control over the company.”
Livingston is in advanced negotiations with two groups of potential US investors
Lions chairman John Ward (pictured) claimed last month that a civil war in the boardroom prevented investors from pouring crucial funds into the cash-strapped Premiership club
In response, Livingston’s board argues that Ms. Sumner has no right to block the rights offering, claiming that this move is necessary to attract much-needed investment.
Despite periods in administration in 2004 and 2009, Livingston’s most recent audited accounts showed a pre-tax loss of £819,220. A forecast for the next financial year predicts a further loss of £600,000. Livi has borrowed £1,783,000 from the Scottish government as Covid relief and claims the public money has covered last year’s losses.
In court documents, the West Lothian team states: ‘Negotiations with two groups of potential US investors are at an advanced stage. The potential investors first noticed interest in purchasing LFC in April 2023.
“In recent months, potential investors have commissioned independent valuations of LFC. They have instructed lawyers to conduct a due diligence investigation. The potential investment would leave money within LFC after the purchase so that LFC can pay off its debts.
The remaining money would also be used to retain and recruit talent. Without foreign investment, LFC would not be able to retain and recruit talent. LFC would risk being relegated.’
Speak with Mailsport Last month, chairman Ward claimed new investment was needed to counter unsustainable losses and lift the team into the top six.
Ward said: ‘Since Covid we’ve been trying to get investment into the club. Two or three times we’ve had people very interested in getting involved with the club. But once they reach the stage of due diligence, we have to explain to them what is happening in the background of the club.
“We have had an ongoing litigation with shareholders and an ex-director that is dragging on. And it has put the club in a holding pattern. We have not turned anything down and there have been no formal offers, but talks are definitely underway.”
Court documents seen by Mailsport warning that the expected losses would wipe out Livi’s cash reserves, leave the club in financial trouble and cause them to ‘become insolvent’ shortly afterwards
In the court documents, the club further warns: ‘Without investment, an additional year of the projected loss level before the end of the 2022-2023 year would wipe out LFC’s cash reserves. That would put LFC in greater financial difficulties. LFC would likely become insolvent soon after.
It wouldn’t have the cash reserves needed to pay off its debts. LFC directors are currently taking steps to prepare a break-even budget for fiscal year 2023-2024. The proposed further investments (and which will be facilitated by the issuance of further shares) would likely ease LFC’s financial concerns.
“The proposed investment would be in the best interest of LFC and, consequently, the company.”
Parent company Oppco6 has a 70 percent stake in Livingston FC and owns 1.3 million of the 1.9 million shares. However, despite owning 70 percent of those Opcco6 shares, the directors have refused to acknowledge Sumner’s status — and a number of legal disputes are now raging between the two parties.
Paul Conway’s Pacific Media Group made a £1 million bid for a 51 per cent stake in Livingston in 2020, which was foiled by red tape from the SFA. That told a figure close to Opcco6 shareholders Mailsport that Mrs. Sumner has since attempted to sell her business, with consultant David Brash appointed to handle any offers.
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