Mark Labovitch used to refer to a ‘smoking gun’ in relation to all this and assured me it would all come out in the wash. I was also told by several supporters that Mr Labovitch had actively pushed this conspiracy line out to supporters when he held a series of intimate meetings during his time at the club.
I was never entirely clear what Mr Labovitch’s role in all this was, but it was rare that anything became clearer after a conversation with him.
But, after three years of covering this sorry saga more closely and in greater depth than any other journalist, I’m still waiting to see any solid evidence of this conspiracy.
I’m aware Sisu’s legal team released one e-mail which implied that the then Coventry Telegraph editor Alun Thorne had sat on the story about the private council vote to loan ACL £14.4m in January 2013.
The e-mail was sent on the morning of the secret ACL loan vote from council chief executive Martin Reeves to his finance director Chris West, Weber Shandwick’s Chris Hogwood, Peter Knatchbull-Hugessen and Paul Harris of the Higgs Charity, Liz Cooper and Jacky Isaac at the Ricoh Arena and Fran Collingham, the council’s head of communications.
An extract read: ‘I had another extremely constructive and honest discussion with the editor of the CT this morning – so all good.’
It adds: ‘Fran mentioned Alun was relaxed about councillors appearing on radio/TV as long as he gets the story first.’
Now let me say first of all that I was not at the Coventry Telegraph at the time of these events in January 2013, so it’s difficult for me to say what exactly went on – and those involved will no doubt have their own views.
What I can tell you is that it is absolutely standard industry practice for journalists to be briefed on an impending major story ‘off the record’ or ‘under embargo’. We are often told sensitive information on the basis that we don’t run articles until a certain time.
In addition, I am absolutely certain that Coventry Telegraph staff can point to instances throughout the Ricoh Arena row timeline where we have sat on stories for all of the parties involved – including the football club.
If we were to breach these confidences, we would be at a competitive disadvantage as the organisations concerned would be unlikely to brief us in this manner again.
Had I been at the Telegraph at the time, I would certainly have pushed for the story to be published if I could get it stood up on the record.
Another important piece of context here is that evidence was heard in court that indicated Sisu already knew about the council plan to bail out ACL. Sisu obviously have denied this repeatedly.
If the council had not informed Sisu of their plans, and there was still any chance of a deal for the football club to gain a stake in an arena built for them, then the council’s tactics are undoubtedly morally reprehensible.
But I would also ask what would have happened if Sisu had been made aware of the secret vote in advance? Can a hedge fund really take any sort of action to prevent a democratically elected public body making urgent decisions in what they consider to be the best interests of taxpayers?
If we believe Sisu didn’t know about the vote, perhaps we could conclude the club’s owners might have made an attractive counter offer had they been warned the vote was coming. But nothing had prevented them from doing that before and the tone of negotiations to that point suggested Sisu wasn’t willing to buy out the Yorkshire Bank debt at the level the council paid.
In conclusion, it is my opinion that it’s absolutely clear that there was animosity towards Sisu from people within ACL, the council and the Higgs Charity.
It seems they didn’t want to do a deal with Sisu for a share in the Ricoh Arena. The evidence also seems to suggest the council, the Higgs Charity and ACL would all have preferred the club to have different owners. Indeed, it seems a lot of time and effort was put in to try to ensure new ownership when the club went through the administration process (which we will cover later).
But did Sisu ever really want to do a deal for the Ricoh Arena during this time?
The evidence suggests certainly not on terms the other parties would have found acceptable. In fact, it appears Sisu took an aggressive approach to securing a share in ACL by withholding rent in a bid to pick up a stake in the company on the cheap. That strategy clearly did not pay off.
Sisu clearly still hotly contest the judgments and the findings of two courts and four senior judges. The legal process will continue in the background. But, for now, the evidence seems pretty damning for all the parties involved directly in the failed stadium negotiations.
Chapter Eight
Administration
IT’S early 2013 and we’ve just entered what will be one of the darkest years in Coventry City Football Club’s history. Talks over a reduced rent deal for the football club at the Ricoh Arena have failed and a £14.4m council bail-out deal for Ricoh Arena firm ACL seems to have killed off any hope of the club securing a stake in the stadium.
Now the action, and the accompanying rhetoric, was being dramatically ramped up.
On 15 February 2013, Ricoh Arena bosses gave the club an unwelcome belated Valentine’s Day gift when they served ‘third party debtor orders’ on the club with a view to recouping their rent arrears. The orders entitled ACL to secure any money the club was owed from third parties to pay down the arrears.
At the time that included money due from Huddersfield Town FC, which was set to pay the Sky Blues compensation for manager Mark Robins, who had just jumped ship, and would eventually be replaced by Steven Pressley.
Other money which could be diverted to ACL included a business rates rebate of almost £400,000, which was due to be repaid to the club after a miscalculation meant they had dramatically overpaid the rates to central government for almost a decade.
The debtor order effectively froze the club’s bank accounts and meant none of the third parties named in the court document could pay money to the football club with immediate effect and that would not change until a final debt order was issued by a judge – unlikely to be before May. At that point, ACL would be able to obtain the money.
The development came as ACL claimed Sky Blues directors had reneged on an agreement over an improved rent deal two weeks previously.
ACL said the deal included cutting annual rent payments by two-thirds to £400,000; waiving £300,000 of the rent arrears; a long-term deal over repayments and giving more stadium match day revenue, such as from food and drink sales, to the football club. It was a deal that the stadium firm claimed would effectively reduce the £1.3m annual rent package to just £150,000 paid by the club in ‘net’ total match day costs while the club remains in League One.
An ACL statement released at the time read: ‘The board of Arena Coventry Limited (ACL) has today served interim Third Party Debt Orders on Coventry City Football Club following the collapse of talks around future rent and matchday arrangements.
‘The orders have been served in respect of the club’s bank account, its card payment acceptance service account, its business rates account with Coventry City Council and Huddersfield Town Football Club.
‘These orders, which are expected to be made final orders shortly, will then entitle ACL to lawfully collect any monies owed to the club by these third parties.’
Nicholas Carter, ACL chairman, said: ‘We don’t want to have to resort to such means as obtaining interim third party debt orders.
‘But if the club won’t agree to the very generous deal on the table and pay what it lawfully owes, we have a duty to our stakeholders to take all the necessary steps to protect ACL’s interests.
‘It’s our responsibility as directors to do all we can to make sure ACL gets paid.’
Then Coventry City Council leader John Mutton said the third party debt order approach was chosen by ACL because issuing a statutory demand for rent payment in full could have tipped the football club into administration or liquidation.
He said: ‘Sisu have to get their heads
out of the sand and realise they have two choices; a sensible deal and investment in the football club and a new manager and get the team back into the Championship... or they can chuck their lot into a brown paper bag and walk away.’
Martin Reeves, Coventry City Council chief executive and an ACL board member, added: ‘By serving this series of interim third party debt orders, the directors are exercising their legal rights while at the same time giving Coventry City Football Club the best possible opportunity, given the circumstances, to continue as a going concern.’
During this period, the football club and its owners remained uncharacteristically quiet, with few public statements. But ACL continued to fill the void, once again issuing strong statements the following day.
They insisted that a new, lower rent deal had been all but agreed the previous month in a meeting attended by senior Coventry City Council and club officials. The firm had also apparently begun to take exception to suggestions that the football club could seek to move away from the Ricoh Arena.
The ‘apparent’ meeting had taken place at the Ricoh Arena on 29 January 2013 and had been attended by John Clarke, Tim Fisher and Mark Labovitch from the club.
Peter Knatchbull-Hugessen, clerk for the Higgs Charity, said he was also in attendance and revealed some further details about what had gone on.
He said: ‘There was a private meeting at the Ricoh Arena in 2013.
‘Mark Labovitch and Tim Fisher and John Clarke were there from the football club, along with Sisu’s lawyer Alex Carter-Silk. Paul Harris [Higgs Charity] was there and so was I, as well as Martin Reeves [council chief executive] and Christ West [council finance director].
‘We worked out a deal on rent, shook hands and agreed it. If they had stuck to that agreement, there was never the need for them to leave the Ricoh Arena.
‘But it fell down because Sisu insisted on being given access to full details of the council loan to ACL before they would agree it.’
It later emerged in court that the deal had actually been vetoed by Sisu’s top boss Joy Seppala.
Apparently Ms Seppala was not willing to accept any deal that did not include the club obtaining a stake in ACL. The stalemate continued.
Justice Hickinbottom assessed the situation during the judicial review into the council’s loan to ACL.
He said: ‘After the council had purchased the bank debt, thereby resolving that immediate sticking point, negotiations over rent continued between CCFC and ACL.
‘On 29 January 2013, heads of terms were agreed, involving rent at £400,000 from 1 January 2013 with an agreement on arrears taking into account a reduced escrow account sum [which left arrears of about £500,000 to be paid] and an in principle agreement for CCFC to benefit from match-day food and beverage revenues and ACL paying a larger share of the rates on the Arena.
‘The directors of CCFC and ACL representatives shook hands on that, but the deal was rejected on 4 February 2013 by Ms Seppala [who, as described by [Sisu QC] Mr Thompson, “sat at the top of the tree in terms of [Sisu] decision making”] on the basis that she was not prepared to accept any deal that excluded Sisu from holding a stake in ACL.’
ACL issued a statement at the time outlining what they believed had been agreed in principle.
It read: ‘The offer set the rent payable by CCFC at £400,000 per annum while the club remains in Football League One.
‘It included agreement from ACL to waive more than £300,000 of the £1,347,000 rent arrears, with a generous approach to clearing the balance. It also agreed the principle of ACL matchday revenues benefiting CCFC, and ACL paying a larger share of rates on the stadium.
‘Instead of confirming its written acceptance, CCFC then proposed an alternative heads of terms, which bore no relation to that agreed. It demanded the waiver by ACL of all rent arrears claims pre-dating 1 January 2013. It demanded also the withdrawal of the statutory demand for the payment of rent arrears issued by ACL against CCFC on 5 December 2012.
‘It was accompanied by an e-mailed statement from Tim Fisher declaring that CCFC has “no option but to build a new venue” and that CCFC’s proposals were predicated on playing at the Ricoh Arena for a ‘run-off period of three years.’
It added: ‘The board of ACL believes that Sisu have no intention of entering into a meaningful dialogue to resolve this issue.’’
Then ACL chairman Nicholas Carter was clearly riled by the back-and-forth nature of the negotiations.
He said: ‘To spend many hours engaging in positive and constructive discussions, leading to a detailed point-by-point discussion of a proposed heads of terms agreement resulting in verbal agreement and handshakes all round, only to then renege when it came to signing the agreement, is truly reprehensible behaviour.
‘There’s simply no point in continuing these discussions while the club, under Sisu’s ownership, continues to behave in this manner.
‘We will only be prepared to resume these conversations if John Clarke, Tim Fisher and Mark Labovitch [the Sky Blues board] sign up to the deal to which they agreed. If the club directors can’t or won’t follow through on the agreement they participated in creating, then we suggest to them that the time has come to consider offering ownership of CCFC to an outside buyer better placed to run the club’s financial operations. Make no mistake, now is the time for Sisu to pay up or sell up and get out of Coventry.’
Strong words from ACL, and the first real public indication that senior figures at the Ricoh Arena wanted Sisu to sell the club.
The firm was also claiming Coventry City officials had told them they planned to build their own stadium, but the club was tight-lipped on this suggestion at this time.
It was hard to believe such a plan could even be feasible, especially for a club suffering from the clear financial difficulties Coventry City had at that time.
Things went from bad to worse for the football club and its owners on 13 March 2013 when a dramatic move by Ricoh Arena bosses edged the club closer to administration – and possibly new owners.
ACL applied for an administration order at the High Court after failing to reach an agreement with the club’s owners Sisu over more than £1.3m in unpaid rent.
That meant the club was likely to enter administration and an administrator appointed who could look to sell the club.
The picture was further developed when ACL suggested there were already parties interested in taking over the club amid rumours that potential investors had visited the stadium.
Crucially, administration could also mean a ten-point deduction for the League One club – something which would scupper hopes of reaching the play-offs and promotion in the first season after relegation from the Championship.
Speaking at the time, ACL director Chris West, who is also Coventry City Council’s finance director, told the Coventry Telegraph: ‘We believe there are other parties out there that could be interested.’
One of the strongest rumours circulating at this time was that suspended life president Joe Elliott had been spotted with an American businessman at a Sky Blues home game against Colchester United on a Tuesday night.
The potential American investor was given a tour of the Ricoh Arena by the then ACL interim chief executive Jacky Isaac.
It was later discovered that this mysterious gentleman was Preston Haskell IV, a US property tycoon who had previously expressed an interest in buying Leeds United. The Texan was undoubtedly in a position to make big investments with a fortune estimated at $250m.
Haskell IV is the son of 74-year-old Preston Haskell III, founder of The Haskell Company, the largest privately held construction company in Florida and a top design/build firm in the US.
At the time of being linked to the club, he had recently sold his minority shareholding in NFL team Jacksonville Jaguars.
Haskell IV had moved to Moscow in 1992 to start the Haskell International Group, which began with real estate investment and property management but also operated restaurants and manufactured furnitu
re.
He also had interests in mining in Siberia and Africa, extensive investments in the Democratic Republic of Congo and involvement in a South African vineyard.
Joe Elliott said: ‘A week before the club went into administration is when I first met Preston Haskell.
‘He came to a night match and liked what he saw and there were many comments from the owners in the press about the financial situation at the club at that time.
‘The arrival of Preston Haskell at that time was to me good news. If the club was going to go bust, at least we had someone on hand with cash who could take over.
‘I have a lot of contacts around the world with people in investment and football and my introduction to Mr Haskell came through a friend of Gary Hopkins – Gary Otto, a South Africa living in LA.
‘I met him at the Westbury Hotel, Mayfair in 2012 and then I didn’t hear from him again until 2013, when Gary Otto got in touch with me.’
Ahead of the administration order, club chief executive Tim Fisher had already said in a national newspaper that the club could be heading for administration and insolvent liquidation.
He is quoted as saying: ‘They [ACL] need to re-enter negotiations pronto or we file. We’ll have no option because there would not be reasonable probability of avoiding insolvency liquidation.’
Those quotes were later backed up by non-executive director Mark Labovitch in the Coventry Telegraph.
He said: ‘When Tim Fisher mentioned the possibility of administration, this was not a tactic or posturing. It is a matter of the law.
‘If a company sees no possibility of avoiding insolvent liquidation, it is legally compelled to go into administration.’
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