In a suit filed in federal court in New York, a firm that provided hundreds of millions of dollars to 777 accused the company of double-pledging its collateral to other investors.
The American investment firm 777 Partners, whose bid to buy the English Premier League soccer team Everton has been on hold for months amid doubts about the company’s finances, was accused by one of its lenders on Friday of running a yearslong fraud scheme worth hundreds of millions of dollars.
The accusation came in a lawsuit filed Friday in federal court in New York by Leadenhall Capital Partners, a London-based asset management company. It said that it had provided 777 Partners with more than $600 million in financing, only to discover that roughly $350 million in assets serving as collateral for the loans either were not in 777’s control or had already been pledged to other lenders.
The lawsuit is the latest, most serious claim against 777 Partners, which has for years made bold assertions about its financial health — it has previously claimed $10 billion in assets — even as it was trailed a string of lawsuits, corporate failures and unpaid bills.
The suit could have immediate implications for 777’s stalled bid to buy Everton: The Premier League has not approved the sale, and the financially strapped club recently said it was seeking alternate investors.
But questions about the company’s balance sheet also carry the risk of contagion for the broader world soccer market, given that 777’s portfolio includes ownership stakes in teams in Australia, Brazil, Belgium, France and Germany, and because it owes debts at all of them.
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Source: Soccer - nytimes.com
