Everton‘s potential new owner 777 Partners is facing another lawsuit after an investor started legal proceedings citing damages of more than $30million (£23.6m).
The American firm is being pursued for $28.5m (£22.4m) in the UK High Court over alleged unpaid aircraft leasing fees.
Now The Athletic reports that according to a court summons filed in New York last week, Change Lending LLC invested $17m (£13.4m) in 777 and its sister company 600 Partners in two tranches of preferred equity in September 2022 and February 2023.
Under the terms of the deal, if 777 failed to provide requested financial information to Change, or any ‘reputational risk’ emerged, Change could make 777 buy back the preferred equity at the same price, plus any unpaid dividends.
Claiming ‘there is no dispute’ over the breach, the summons details Change’s attempts to get 777 to provide it with financial statements, including an audited balance sheet of the company’s assets.
A potential takeover at Everton edged a step closer last month after 777 Partners had their bid cleared by the Financial Conduct Authority (co-founder Josh Wander pictured)
Frustrated by ‘delays and excuses’, Change told 777 it was triggering its repurchase rights in September 2023.
In the court document, Change suggests 777’s ‘failure and refusal to provide audited financial statements and other key financial information to counterparties appears to be a pattern’.
Citing media reports into 777’s proposed takeover of Everton and its acquisition of Belgium side Standard Liege in 2022, Change says questions have been raised about 777’s ‘business practices’ and the source of the money it is using to make these investments.
In summarising its case, Change says it has ‘determined that the 777 Entities were in unsatisfactory financial condition’ and that 777 has ‘exposed Change to unacceptable reputational risks’.
As a result, it says, Change is entitled to ‘compensatory and consequential damages’ and all of its legal costs. 777 must now answer the complaint within 20 days of January 9, the day the summons was served.
777 Partners are also being pursued for $28.5m (£22.4m) in the UK High Court over alleged unpaid aircraft leasing fees.
Everton were docked 10 points earlier this season for breaching Financial Fair Play regulations
777 Partners, whose portfolio of investment includes sport, insurance and aviation, are being pursued by Irish firms Corvus Lights Aviation, Columba Lights Aviation and MAM Aircraft Leasing over four aircraft formerly operated by Canadian carrier Flair Airlines, a firm part of the 777 investment portfolio.
In March last year four planes leased to Flair – three Boeing 737 Max 8s and one 737-800 – were repossessed due to outstanding fees, leading to operational issues for the airline. Two default notices were issued to Flair as a result.
Following those repossessions, 777 Partners launched legal action of their own in a Canadian court in Ontario, seeking $37m (£29m) in damages from Airborne, the intermediary company that was managing the leases on behalf of the three companies pursuing 777 in the High Court. The pursuit of damages relates to 777’s allegations that the repossessions by Airborne negatively impacted its flight operations and caused reputational harm. That legal action is ongoing.
In a statement, the firms said: ‘Despite being repeatedly notified of their financial obligations, 777 Partners have continued to ignore calls to settle outstanding payments of almost $30 million. 777 Partners cannot just ignore its financial and contractual obligations. This legal action is a last resort.’
777 typically declines to comment on active cases but has strongly denied all allegations of fraud.
A potential £500m takeover at Everton recently edged a step closer after the American investment firm 777 Partners had their bid cleared by the Financial Conduct Authority (FCA).
Everton boss Sean Dyche has admitted he is not expecting to conduct much business in the January transfer window, amid ownership and financial uncertainty at the club.
The Toffees were deducted 10 points by the Premier League for breaching FFP rules in November, but bounced back with four successive wins, before they have lost their last three matches.
Everton’s prospective owners 777 Partners have been hit with a transfer ban at Standard Liege (pictured)
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 the uncertainty of 777 Partners’ proposed £500million takeover of the club, which is still awaiting approval.
One of the clubs owned by Everton’s prospective owners 777 Partners have been hit with a transfer ban.
Belgian Pro League side Standard Liege were placed under a transfer embargo by the country’s football association over a failure to meet 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 in 2021 from Norwegian side Valerenga – a deal completed before 777 Partners took control of the club.
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