Sunday, 1 March 2009

Arbitrations And Moratoriums

A slightly more interesting than usual Sunday tabloid spread begins with Rob Shepherd's assertion that the Hammers will not be held to ransom by Sheffield United's outrageous compensation claim in the upcoming arbitration hearing. The club are reported to be staggered that the Blades have submitted a bill for relegation from the Premier League totalling £45.5million, with the Upton Park hierarchy insisting a full examination of the books will reveal the true cost to be a fraction of that. As it stands, West Ham contend the genuine 'cost' is no more than £5million.

In his exclusive in the News of the World, Shepherd 'understands' West Ham United officials would be willing to negotiate a settlement with the Yorkshire club ahead of the two-week arbitration procedure which is set to start on March 16. The Hammers believe when such things as significant reduction to Sheffield’s wage bill and running costs are evaluated the Blades’ bill will be exposed as excessive in the extreme and Sheffield United could run the risk of substantially losing out when the whole cost of the legal fight is factored in as well as having potentially sensitive financial deals exposed. The Hammers have already been fined £5.5million for irregularities surrounding Tevez’s contract when the Argentina striker signed for the club under a third-party agreement.

In the meantime, the Sunday Mirror believe West Ham are set to be taken over by a group of Asian investors in an imminent £90million deal. The group from the Far East are said to be close to replacing the current Icelandic owners with talks thought to be at advanced stage. Indeed, writes Bill Mills, business might even be concluded within the next week. The prospective owners are believed to be a wealthy industrial group who already have the funds in place to buy the club from Bjorgolfur Gudmundsson.

Gudmundsson's Icelandic company arrived at Upton Park in November 2006 after clinching the £85million deal that paved the way for the departure of chairman Terry Brown. Eggert Magnusson was subsequently named chairman and splashed out vast transfer fees while agreeing inflated contracts that are now millstones around the club's neck. Mills reports that Gudmundsson then took over at the helm only for his long-term future in English football to be undermined by the worldwide credit crunch. He was later removed as chairman of Landsbanki, Iceland's second largest bank, following its collapse and government takeover.

It was at this point that rumours of the availability of the club began to circulate, and the deal is now set to take place. The buyers will, though, have to be happy about the potential debts they are inheriting. Apart from the small issue of Sheffield United's claim from the Carlos Tevez affair, former manager Alan Curbishley is still pursuing a £3million compensation suit and there remains a settlement issue with Kia Joorabchian that could cost up to £10million. That is aside from the provision of funds for Gianfranco Zola's future team building.

This story comes just hours after it was revealed that West Ham United face a crucial day in the Icelandic courts this week, when a judge could force owner Bjorgolfur Gudmundsson to sell the club for a knockdown price. According to the Mail, Gudmundsson is hoping judges grant him an order to extend a moratorium which currently restricts banks from attempting to seize his assets. If the deal with a Far Eastern consortium is now as close as is suggested, and not merely a fabrication designed to stall for time, then it would be the favoured outcome for all parties and it is likely he will be afforded the leeway to conclude the sale. The article states that West Ham United remain confident that the decision will go their way, as the best way of maximising the price of the club is to allow the current sale process. However, if the decision goes against them, slathers the Mail, the club could end up being run by a consortium of banks, who would attempt to sell the club as quickly as possible.

Friday's judgment relates to West Ham's holding company, Hansa, which was granted the original moratorium in November. One bank, MP Bank, has objected to the initial ruling and several commentators have noted that the stated £250million price Hansa placed on West Ham at the time was always unrealistic in the current economic climate. That would certainly seem to be the case if the terms of the sale as revealed in the Mirror today turn out to be accurate.

1 comment:

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