Loyal Blackpool Football Club supporters, lining the walls at the High Court in London, clapped as one of the country’s top judges appointed receivers to take over, temporarily manage and sell the club along with its ground and hotel.
Around 20 supporters spent the day standing at the back of the packed court room - some wearing tangerine coloured Oyston Out scarfs - to hear an application for a court-appointed receiver to be brought in to ensure that Owen Oyston’s £25m debt owed to rival minority shareholder Valeri Belokon is paid.
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Two receivers, Paul Cooper and David Rubin will discharge the club assets of Oyston, plus those of Blackpool Football Club (Properties) Ltd, formerly Segesta Ltd, which owns Blackpool FC, the stadium, the training ground and the Travelodge.
But the judge did not agree that the receivers should also be brought in regarding Oyston’s other assets, including a property portfolio and shares in Closelink Ltd, for example.
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Mr Justice Marcus Smith said existing orders for sale could be used for Segesta shares or assets held by Segesta. However, he said those orders would only be effective if the football club was “broken up” and its assets simply sold, ignoring that it was an ongoing business.
He had been told that the receivers would seek to reassure the EFL board that their management of all Segesta assets would not adversely impact the club’s ability to fulfil its obligations.
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“The receivers would sell Segesta shares in the club and stadium as a single package rather than separate assets, as it would realise their maximum possible value,” said the judge.
He said he had been told that it was the intention to replace management of Segesta and Blackpool FC and put in new and expert people who could run the club, temporarily pending a sale.
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“It’s clear to me that the appointment of a receiver in relation to the club’s assets, Segesta’s, will achieve a real benefit and is plainly in the interests of justice [of settling the judgement debt],” he said.
He added that it would be difficult to establish all the information necessary for any potential purchaser by using just an “order for sale.”
The judge said he was not appointing a receiver for any other of Oyston’s assets as not enough evidence had been submitted about why that method of dealing with those assets would be better than using the normal route. Mr Belokon’s legal team already have charging orders and orders for sale on Oyston’s assets and share holdings.
The judge ordered Oyston to pay costs of £100,000 for today’s hearing, within 14 days.
In making the application today, Barry Isaac QC, for Mr Belokon, said Mr Oyston had hindered or made the normal processes of executing the judgement difficult.
He told the judge : “The fact that such a large debt remains outstanding for such a long time, 15 months, is explained by his failure to sell assets and by his lack of co-operation.”
Not a single substantial asset had so far been sold, he said.
By comparison, Mr Oyston was said to have run up costs with his repeated court and legal obstacles - and to have paid his own legal team but not those of Mr Belokon.
“Since November 2017 the costs of the petitioner [Belokon] and of Oyston and Segesta are at least £1.7m. And that is to be compared against asset sales realised of £200,000 or thereabouts. That is how much has been recovered,” said Mr Isaac.
Last October, Mr Oyston, 84, was issued with a penal notice – subject to a qualification about providing share certificates and title deeds - which meant he potentially faced jail or other sanctions if he continued to disobey court orders.
Mr Isaac told the judge that a penal notice issued by the judge on May 5 last year was not able to be served. He said Mr Oyston’s solicitors would not accept it and personal service failed on six occasions.
Other examples of hindrance, he said, were that a £22,000 cheque from the proceeds of the sale of a property in Coronation Street in December 2017 had not been deposited and a sale of a house in Victoria Road West fell through due to lack of contact.
Yet Mr Oyston was said to have repeatedly asserted that he and his team were working “tirelessly and strenuously” to discharge the judgement debt.
Mr Isaac said Mr Oyston had also cited health issues, affected by all the litigation. But he said Mr Oyston was engaged in other legal disputes, including his divorce, and had continued to run the football club and a complex group of companies.
Mr Belokon denied Mr Oyston’s allegation that he was “trying to bring down” the Oyston Group or was deliberately attempting to cause damage and to undervalue his assets.
Mr Isaac said that court-appointed professional receivers would be in a position to sell assets to satisfy the debt, particularly where there were “grave concerns about the manner in which the Oyston Group operated, particularly money flow in and out of companies in the group”.
That flow appeared to be at “the whim” of Mr Oyston, he added, and said his financial affairs had previously been described by the judge as “opaque”.
Mr Isaac said that rather than selling shares it would be easier to sell the underlying assets, such as those of the football club and Close Link. It was possible that a partner might be willing to co-operate in a joint venture regarding Close Link.
In his reply, Matthew Collings QC for Mr Oyston argued that a receivership appointment was not necessary and could not be deployed simply for “convenience”.
He said that Mr Belokon’s legal team had charging orders and orders for sale for all the assets but had chosen not to use them and added: “It’s exceptional to have court receivers when you should go through ordinary processes of execution.”
He said Mr Oyston had been trying to settle the judgement debt and revealed that interest was piling up at the rate of £5,000 a day on the unpaid sum.
Mr Collings said Mr Oyston’s side were “happy to maintain the burden, which has been considerable”.
He claimed that Mr Belokon’s team had been “lackadaisical” in implementing the methods they already had. He argued that it would be detrimental to impose a court receiver because of the stigma attached and the very real risk the EFL might impose a 12-point penalty on financial grounds which in turn would affect the club’s value on the market.
He also claimed that the matter “boiled down to an argument about who controls the club”.
Mr Belokon’s lawyers have repeatedly made it clear that he was not out to harm the club.