The meeting was very well attended. The briefing was presented by the McCabes solicitor because of all the legal ramifications. He spoke extremely well, basically explaining the judges summation in layman’s terms.Originally Posted by Longshortandtall
Basically we the shareholders own shares in SUL a company owned and controlled by the McCabe family. The football club is wholly owned by Blades Leisure Ltd (BLL) . SUL owns 50% of BLL. The other 50% was owned by UTB LLC, a company owned by The Prince.
The shares were subject to a ‘Russian roulette’ agreement whereby one party could make an offer to buy the other parties shares. The other party could either accept the offer or alternatively they could invoke a clause which entitled them to buy the shares from the first party for the same price that they had offered.
If as a result of this one party became the owner of more than 75% of the share capital in BLL they then had to buy the property at its commercial value. This property included Bramall Lane, Shirecliffe and Crookes.
The McCabe family made an offer to The Prince for his shares in BLL. The Prince turned this down and invoked the counter offer clause to buy The McCabes shares for the same price that they had offered him.
This would have course have resulted in The Prince being forced to buy the properties but for that fact that unbeknown to The McCabes he had arranged the transfer of 80% of his existing holding to a new company (UTB 2018) so that UTB would not own 75% of the total shares after the purchase thereby meaning that The Prince did not have to buy the properties.
This would in turn mean that shareholders in SUL would effectively lose out on £20m. Fortunately The McCabes had become wise to this shortly before the sale and it became the subject of legal action.
A Cash flow had been prepared independently to show that the Club were budgeting for a deficit of £10m this season and that £3m was immediately required to begin to fund this. The McCabes offered to put in a loan of £1.5 m if The Prince did the same. The Prince refused this but said he would make a gift of £1.5m if the McCabes did the same. The McCabes refused this saying they had offered a loan so that whichever party lost the case would at least be entitled to their money back.
The court case was set for May 2019 but a mediation process was to take place in September 2018 in order to explore whether a solution can be found that could be agreeable to both parties.
Shareholders were then invited to ask questions.
Interestingly, one shareholder asked for a show of hands to see who supported each party. All but one raised their hands in favour of The McCabes.
In response to a question about foreign ownership KM said he would rather procure future investment from a local or at least UK based businessman but football was changing and he suspected he would need to hunt globally because no one in the UK with an interest in The Blades had access to the funds required in the modern game.
Someone pointed out that Mr McCabe was of an age where he could not go on forever and asked whether his Sons would be willing to take over when KM stood down. Simon McCabe confirmed that he would be (Scott was on holiday).
The solicitor made two other points. In response to a question I think he implied that they were challenging whether the Princes action re the transfer of shares was legal (it was a little unclear so apologies if I got this bit wrong). He said that if it was all legal and above board why did The Prince not do it all openly and report it to the authorities or courts as part of the purchase process.
There was also some reference to The Chartwell loan. This appears to be a loan advanced to the Prince by the owner of a Company (Sella Ltd?) when The Price was Saudi Minister for Sport. This seemingly enabled The Prince to meet an investment commitment to the Club. However it sounds as if the loan was allegedly little more than a bribe to secure TV rights for Sella Ltd (hope I can’t get into trouble for that?).
Apologies that much of this has probably gone over old ground. However it was good to hear the solicitor confirm the interpretation that many of us had gleaned from the transcript.
Hopefully if other posters were there they can fill in the bits I have missed out.
In summary I think KMs first aim is to prevent The Prince from taking over and to see him on his way. I genuinely think he will then consider which available options are best for the Club. Perhaps to bring a wealthy investor on board to work alongside him? Alternatively I think he would sell if he thought it was best for the Club although I don’t recall him actually saying that.
Will be away from the computer for a while now but if anyone has any questions I will be happy to try to answer.
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