A group attempting to acquire ownership of non-league Southend United has warned that the club could face another judicial battle.
The buyers stated that a creditor was asking for the club’s dissolution and that a further court hearing was “likely”.
The group of investors also stated in a statement that the takeover had taken “longer than any party expected”.
The club had previously incurred debts of £2.5 million, but the proposed sale to Australian billionaire Justin Rees and other investors was revealed in October.
Ron Martin, the current owner, has appeared before the Insolvency and Companies Court in London several times in recent years due to winding-up petitioners, including HM Revenue and Customs for unpaid taxes.
A sales agreement for the takeover was signed in December.
The consortium statement released on Tuesday stated that two primary conditions remain outstanding: the conclusion of the council’s diligence procedure and the consent of Martin’s financing partner.
While the council has kept us updated on the process, which is due to be completed in late April, we have yet to get a formal response from the financing partner.
This procedure has lasted longer than any party expected, and as a result, we have had to rely on the patience of the club’s numerous creditors.
Distraction
The statement said, “Unfortunately, one creditor is unwilling to wait until the sale closes to obtain reimbursement and has now petitioned for the club’s dissolution.
“While the consortium continues to pay all wages and other running expenditures, we are unwilling to support payouts to historical creditors until we are certain that the closure criteria, over which we have no influence, will be met.
A winding up hearing will now likely occur prior to the sale completing, causing unnecessary distraction and legal costs which will be detrimental to the club.”
The consortium stated it had already invested more than £3 million.
Court documents show that Stewarts Law, a law company, has filed a winding-up petition.
According to a November report to Southend-on-Sea City Council’s cabinet, the consequences of the takeover must be subject to rigorous due diligence, including an appraisal by the council’s property, legal, and financial consultants, as well as external auditors.
Liam Ager, publisher of Southend United fanzine All At Sea, told BBC Essex: We just keep getting trapped in this endless cycle of existential threat, dread, and conversations about what we shouldn’t be talking about… it’s tiring as much as anything.
Southend is currently mid-table and struggling to get out of the National League.
