A group seeking to acquire Southend United, a non-league team, has issued a warning that the team might become involved in yet another legal dispute.
The buyers stated that a second court hearing was “likely” and that a creditor was requesting that the club be wound up.
The investor group also stated in a statement that the takeover had taken “longer than any party expected”.
Prior to the proposed sale to Australian businessman Justin Rees and other investors in October, the club’s debt had risen to £2.5 million.
Due to winding-up petitioners in the past few years, including HM Revenue and Customs over unpaid tax, the current owner, Ron Martin, has appeared before the London Insolvency and Companies Court on multiple occasions.
In December, a sales agreement was signed for the acquisition.
The consortium statement, which was made public on Tuesday, stated that “two main conditions remain outstanding: the completion of the council’s diligence process and the consent of the Martin’s finance partner.”
“We have not received an official response from the finance partner, despite the fact that the council has kept us informed about their process, which is anticipated to conclude in late April.
“It is evident that this process has taken longer than anticipated, and as a result, we have needed to rely on the patience of the club’s numerous creditors.”
‘Distraction’
“Unfortunately, one creditor is not willing to wait for repayment until the sale closes and is now requesting that the club be wound up,” the statement continued.
“The consortium is not willing to fund payouts to historic creditors until we are certain that the closing conditions, over which we have no control, will be met, even though we are still paying all wages and other operating expenses.”
“It is now likely that a winding up hearing will take place before the sale closes, which will be bad for the club because it will create needless distraction and legal expenses.”
The consortium declared that over £3 million had been invested thus far.
According to court records, Stewarts Law, a legal practice, has filed a winding-up petition.
The implications of the takeover had to be subject to due diligence, including appraisal by the council’s property, legal, and financial advisors as well as external auditors, according to a report presented to the cabinet of Southend-on-Sea City Council in November.
As stated by BBC Essex, “We just keep getting trapped in this endless cycle of existential threat, and dread, and conversations about what we shouldn’t be talking about… it’s tiring as much as anything.” Liam Ager is the editor of the Southend United fanzine All At Sea.
Southend is in the middle of the table and is battling to leave the National League.
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