The Friedkin Group have agreed to acquire Farhad Moshiri’s shareholding in Everton having initially stepped away
Everton look set for a new dawn under new ownership after an agreement was reached between US billionaire Dan Friedkin and Everton owner Farhad Moshiri on Monday. The Friedkin Group have agreed to acquire the shares of Blue Heaven Holdings Limited.
What happens next is that the Friedkin Group will go through the necessary steps of obtaining approval via the Premier League’s owners and directors tests, the FA’s fit and proper persons test, and the Financial Conduct Authority’s test. The process could take up to 12 weeks, but will likely be less than that, with no issues expected to arise, unlike what happened with the long-doomed bid to buy the club by 777 Partners.
It is quite the U-turn given that two months ago the Friedkin Group, who took on the debt of some £200m previously provided by MSP Sports Capital, had stepped away from talks owing to concerns that existed around the £200m-plus debt the club also had on the balance sheet from 777 Partners, a significant amount of which had come from Miami-based lenders A-CAP.
READ MORE: BREAKING Friedkin Group Everton takeover confirmed as Farhad Moshiri agreement reachedREAD MORE: What Friedkin Group will bring to Everton is clear as silence speaks volumes in takeover twist
777 Partners are the defendant in a civil case in a New York court that was brought by Leadenhall Capital Partner, a London-based lender who allege that 777 obtained $350m worth of funding from Leadenhall by putting up collateral that either didn’t exist or wasn’t owned by 777 co-founders Josh Wander and Steven Pasko, the plaintiff claiming ‘fraudulent’ behaviour. 777 Partners denies the allegations.
We use your sign-up to provide content in ways you’ve consented to and improve our understanding of you. This may include adverts from us and third parties based on our knowledge of you. More info
The concerns for the Friedkin Group initially was that in the event of insolvency practitioner being engaged in relation to 777 later down the line, then Everton could be in reach as an asset where funds could be recouped from, something that would be impactful for any new owner. There was also a concern over another layer of legislation relating to any criminal activity, should it be proven, although the matter being heard in New York is a civil matter and not a criminal case, although it could turn into one. There were concerns around the potential for proceeds of crime to be an issue in the future if a criminal case was brought.
The Friedkin Group, as creditors of the football club, had maintained continued dialogue with Moshiri and other lenders even after stepping away due to any successful takeover attempt having to pay off the Friedkin Group loan at the point of completion. The Friedkin Group had engaged with another interested bidder, US billionaire John Textor, who had been vocal in his wish to acquire the club.
But through the continued dialogue that the Friedkin Group had with other creditors of the club, or those with an interest in proceedings, one of those being A-CAP who had provided a significant amount of finance to 777 Partners for their working capital support for Everton, it was discovered in recent weeks that a resolution could possibly be found.
The Friedkin Group and A-CAP recently reached an agreement over the debt, one that gives an extra layer of protection and security for the soon-to-be new Everton owners to embolden them to come back to the table.
The specifics of the agreement are unknown at this point, but the ECHO understands that it will go before the New York civil court as part of the Leadenhall case and there is confidence that it will be accepted. The upshot of such a decision would relate to it potentially taking Everton as an asset out of reach in the event of any insolvency process, or it became a criminal case.
It is understood that the Friedkin Group are confident the agreement with A-CAP, who were last month part of an amended complaint by Leadenhall to the New York court in relation to accusations of ‘double pledging’ collateral to gain access to financing, will be accepted by the civil court and that the Everton takeover can press ahead unimpeded.
The Friedkin Group’s chief concern was that Everton were not an asset that could be chased as a result of a court decision. They now appear to have enough comfort through the agreement and expected approval by the court, after conversations with legal counsel, to press ahead.