The prospective American owners of Everton, 777 Partners, are embroiled in a massive fraud investigation. Amidst a months-long takeover attempt for Premier League club Everton, their financial situation has come under scrutiny.
To make matters worse, the Miami-based investment firm’s effort to acquire the Toffees has hit yet another roadblock. One of 777 Partners’ lenders has now accused the company of a scam involving hundreds of millions of dollars.
Leadenhall Capital Partners added another wrinkle Wednesday by suing in New York’s federal court. Lawsuit claims reveal 777’s over $600 million debt to London investment firm.
Surprisingly, 777 Partners did not have control over the $350 million assets that served as collateral for the loans. Those assets had already been committed to other lenders, the Financial Times say.
What does lawsuit say?
“To induce Leadenhall to fund their operation, Wander, along with his group of alter ego entities, ‘pledged’ over $350 million in assets as collateral to Leadenhall, knowing all along that the assets either did not exist, were not actually owned by Wander’s entities, or had already been pledged to another lender”, the complaint states.
“[Co-owner Josh] Wander has already admitted to rampant and fundamental breaches of the parties’ agreements – the only question now is whether Leadenhall will be able to recover millions of dollars in damages from a house of cards on the brink of collapse.”
Josh Wander at a recent Everton game.
Everton depicted as another victim of ‘Ponzi scheme’
An “outright Ponzi scheme” or “a giant shell game” is what Leadenhall calls 777 Partners. This might delay the Everton acquisition since it is the most recent and severe legal action that 777 Partners is facing.
Farhad Moshiri decided to sell his 94.1% share in the Merseyside club in September. However, he is still the current owner of the Toffees. Much controversy and postponement have since marred the process.
A game-changer in soccer, the so-called multi-club ownership concept was born thanks to Josh Wander and Steve Pasko’s company. All sorts of soccer teams now have them as shareholders.
Already a formidable force in the world of ownership, their holdings include Hertha Berlin of Germany, Genoa of Italy’s Serie A, and Vasco da Gama of Brazil. However, the Premier League has not yet given its green light for them to acquire Everton.
To paraphrase the lawsuit: “The latest shiny object of Wander’s fraudulent scheme” was how was Everton were depicted. It said that Wander’s approach has consisted of “robbing Peter to pay Paul,” or “using debt to acquire new assets that he can then use as collateral for more debt.”
By gaining 11 points, Everton has surged up the standings to 15th place, safely avoiding relegation from the Premier League. Even though their budget is tight, they have managed to amass a points buffer.
By the end of June 2023, the club’s net debt had climbed to almost $414 million. That was up from $177 million the previous year. From $48 million in the previous year, net losses increased to $112 million in the fiscal year ending in June 2023.
Photo credit: IMAGO / NurPhoto IMAGO / Propaganda Photo
