Everton’s prospective new owner, 777 Partners, is being sued for allegedly borrowing fraudulently against approximately £280 million of assets it did not control or “did not exist”.
Josh Wander, the co-founder of the US investment firm, is accused of having “pledged” more than $350 million in such assets as collateral to Leadenhall Capital Partners LLP and Leadenhall Life Insurance Linked Investments Fund PLC.
The lawsuit filed on Friday in New York is the latest to engulf those behind 777, which has been plagued by controversy since being founded by Wander and Steven Pasko in 2015.
That includes previous allegations of fraud and claims of other questionable business practices, which the company has repeatedly denied.
The latest claimants against 777 are seeking unspecified damages and a court order barring it from violating its obligations, alleging in their complaint: “To induce Leadenhall to fund their operation, Wander, along with his group of alter ego entities, ‘pledged’ over $350 million in assets as collateral to Leadenhall, knowing all along that the assets either did not exist, were not actually owned by Wander’s entities, or had already been pledged to another lender.”
A spokesperson for 777 told Telegraph Sport it did not typically comment on litigation.
The lawsuit was filed at the end of a week in which 777’s airline portfolio shrunk twice as Premier League approval for its takeover of Everton continued to evade the firm.
Days after Australian budget airline Bonza entered voluntary administration, sister Canadian company Flair said other backers will now take up shares owned by 777.
The situation at Bonza is likely to be scrutinised by the Premier League, which could require guarantees that no other companies in the 777 stable are in trouble.
Sources close to talks denied the situation would hamper efforts to secure ownership at Everton, however. “Multiple executives”, one insider claimed, have passed the league’s owners’ and director’ test.
Unconnected insolvencies relating to two or more entities relating to a prospective director can be a disqualifying factor for directors, according to the league’s rulebook.
There is no suggestion that Flair was about to fold but the low-cost airline moved to quell any speculation by issuing a statement confirming that 777 shares had been acquired.
Everton owner Farhad Moshiri agreed a deal to sell his 94.1 per cent stake in the club to 777 in September, but the takeover approval process has been fraught.
This week, 777 Partners made a marginally late payment of around £16 million towards Everton’s working capital, to ease alarm shortly after Bonza abruptly ceased flying.
But the events of the week will merely compound doubts over its ability to raise enough funds to complete a £500 million purchase of Everton, who it also emerged had begun talks with debt-restructuring experts in a move that raised further questions about the protracted takeover.
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