Coventry City owner will drop legal action against Wasps if commercially acceptable deal agreed – ITV News

Coventry City owner will drop legal action against Wasps if \commercially acceptable\ deal agreed - ITV News

Coventry owners SISU believe deal can be reached to save club

Coventry Citys owners have publicly promised an end to their legal action against the local council over the sale of the Ricoh Arena if they get support to build a new home in the city.

Sisu Capital Ltd will drop the long-running case if they can move – but are also seeking a medium-term deal with Wasps to remain at the Ricoh for now.

In May 2014, SISU welcomed the efforts of Reverend Witcombe in bringing all parties together and SISU willingly participated in the subsequent dinner in July 2014 and mediation process which resulted in the Club returning to the Ricoh Arena on 5 September 2014. As in all mediation processes, SISU approached the mediation in good faith and came out of the process cautiously optimistic for the future and the return to the Ricoh. Indeed, public and private comments at the time from senior Council officials pointed to there needing to be a period of time to rebuild trust before longer term ownership discussions (of the Ricoh Arena) could take place.

Coventry City respond to Sisu statement over Ricoh legal action

If it is not resolved by then, EFL clubs will be notified about a meeting, which would take place on 25 April, at which Coventry could face expulsion from the league.

The legal case hinges on their claim that Coventry City Council undervalued the Ricoh by £28m when the ground was sold to Wasps in 2014.

In early 2012, as the Club looked to further reduce costs, it discovered it had overpaid rates as if it was entitled to access the stadium 365 days a year, rather than the 23 days allowed under the lease agreement. The rebate due to the Club was assessed by the Valuation Office Agency as between £300,000-£400,000, which would need to be refunded by the Council as usual. Although the refund was confirmed in March 2013, by November 2013 the Club was still chasing senior Council executives for the refund payment. Eventually, the Club had to instruct lawyers, and only finally received the refund owed in February 2014.

Sisu say they “typically do not make press comments” but that they are “breaking with that tradition, because we think it essential that we explain to the fans the status of Coventry City Football Club.”

The Higgs Charity had previously provided a loan to the Club in order to finance player acquisitions. During the 2000/01 season, the Charity called in the loan early, which was not due for repayment until 2003. The Club was unable to repay, and so were forced to give up their share in ACL (and consequently any access to their match-day revenues) to pay off the loan. The Clubs Board noted in their Board meeting minutes on 3 December 2003 that they were unable to afford legal advice at this time, despite both ACL and the Council each using teams of advisors.

In an open letter, emailed to both local and national media, the first time they have spoken on this matter since 2016, the London-based investment manager asked for:

SISU considers that the Council was not legally entitled to agree this sale to Wasps in the way it did. SISU also considers that the sale to Wasps was at an undervalue, partly because the Council did not run a competitive bid process (a key to establishing what an asset is worth on the open market). SISU was never given the opportunity to bid, and given the importance of the stadium to the Club, SISU would certainly have participated in a competitive sale process of 100% of ACL and a 250 year lease, such terms having never previously been available offered.

They returned in 2014 after just over a year ground-sharing 33 miles away with Northampton Town, but have been told by the EFL that they must play their home games within six miles of the city centre.

During the purchase negotiations in 2007, SISU attempted to acquire Higgs shares in ACL. Due to the complexity of the transaction and the time pressure to pay creditors, it was not possible to conclude the Higgs share purchase in the required expedited timeframe. SISU’s only option was initially to focus on stabilising the business, which included signing a co-operation agreement with ACL, envisaging cost and revenue sharing between the two companies. Unfortunately, despite costs being shared, the agreed revenue share never transpired.

Sisu say they are inconvenienced by the EFL stipulation over the geographical location of any new stadium – and have also outlined other potential obstacles arising from the “current acrimonious relationship” with the council.

However, in a background document to go with their open letter, they say they have “invested considerable time and money in exploring the construction of a new stadium” and that “real estate advisors have been and continue to be engaged to source land for such a development”.

SISU has been the target of much unwarranted and misleading press attention. This is unfair both to it and to Coventry City Football Club. SISU does not want to enter into a media war, but instead sets out its position in this document. The background to where the Club finds itself is highly complex which has in part led to misrepresentations in the media. SISU has tried to simplify the issues here to explain the history that has led it to the current litigation and its long term aims for the Club.

Sisu add that they are “still hopeful” that the council will work with them to progress the development of a new ground.

Between early 2012 and August 2012, ACL continued to receive full rent, dropping to an agreed reduced amount from August onwards. In total, from late March 2012 to March 2013, ACL received over £850,000 in rental payments, which whilst not the full total of the £1.3m rent, was significantly higher than any other League 1 and Championship football club rents. Without match-day income (which all went to ACL), it was all the Club could afford to pay.

Joy Seppala, the head of SISU, owners of Coventry City, has broken her silence over the row which threatens to see the club expelled from the English Football League (EFL) in six weeks time.

In 2014, the Council decided to sell the Ricoh to Wasps. Not only was this a slap in the face to the Club but the effect of the deal was that Wasps gained control over a very long lease at a significant (some £28 million) undervalue. The Club has never been offered the true ability to buy a stake in ACL, nor anything close to the deal Wasps concluded. This has been devastating to the long-term interests of the Club and its fans.

Speaking exclusively to Sky Sports News, the hedge fund chief revealed she believed their disputes with Wasps and Coventry City Council can be resolved – and that every battle they have fought in 11 years of ownership was “to make the club the very best it can be”.

However, SISU had no idea the Council had decided unilaterally to pursue its own transaction with the Yorkshire Bank and cut SISU out. SISU continued to push the transaction in good faith as it was in the best interests of the Club. A PR campaign, orchestrated by Weber Shandwick, targeted against SISU ultimately frustrated the deal and allowed the Council to enter into its own deal with the Yorkshire Bank.

Seppala was speaking ahead of a crucial meeting in Westminster later this week called by the Culture Secretary, Jeremy Wright MP, to help find a solution to the stalemate which continues to threaten the clubs existence.

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Coventry City owner will drop legal action against Wasps if commercially acceptable deal agreed – ITV News
Coventry City owner will drop legal action against Wasps if commercially acceptable deal agreed – ITV News
Coventry City owner will drop legal action against Wasps if commercially acceptable deal agreed – ITV News
Coventry City owner will drop legal action against Wasps if commercially acceptable deal agreed – ITV News
Coventry City owner will drop legal action against Wasps if commercially acceptable deal agreed – ITV News
Coventry City owner will drop legal action against Wasps if commercially acceptable deal agreed – ITV News
Coventry City owner will drop legal action against Wasps if commercially acceptable deal agreed – ITV News
Coventry City owner will drop legal action against Wasps if commercially acceptable deal agreed – ITV News
Coventry City owner will drop legal action against Wasps if commercially acceptable deal agreed – ITV News
Coventry City owner will drop legal action against Wasps if commercially acceptable deal agreed – ITV News
Coventry City owner will drop legal action against Wasps if commercially acceptable deal agreed – ITV News
Coventry City owner will drop legal action against Wasps if commercially acceptable deal agreed – ITV News
Coventry City owner will drop legal action against Wasps if commercially acceptable deal agreed – ITV News
Coventry City owner will drop legal action against Wasps if commercially acceptable deal agreed – ITV News
Coventry City owner will drop legal action against Wasps if commercially acceptable deal agreed – ITV News
Coventry City owner will drop legal action against Wasps if commercially acceptable deal agreed – ITV News