Everton face administration danger as £300million legal threat lodged by Leicester, Southampton and Nottingham Forest
Everton face increased danger of going into administration if they have to pay hundreds of millions in compensation to rival clubs after legal papers were filed, the Daily Mail reports.
In a worrying echo of a year ago, when Leeds United and Burnley joined forces to threaten legal action, this time they have been joined by Southampton, Nottingham Forest and Leicester on a claim if the Toffees are found guilty of the FFP charge from the Premier League.
The other sides had already lobbied for the hearing by the independent commission to be brought forward, after a profit and sustainability breach was alleged when Everton’s latest accounts came out in March.
According to the Mail, the five clubs reacted to that request being rejected to sign up as parties to the dispute, and if the first tribunal finds Everton guilty a second will then hear the claim for £300million in compensation.
If Everton stay up not all of the named clubs will be involved in the claim, but whichever two join Southampton in being relegated to the Championship, with £100million per claimant seen as covering lost Premier League income minus parachute payments for a year.
The Mail report states: “A bill for damages would place yet more pressure on Everton’s beleaguered finances and increase the danger of them entering administration.
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“Everton insist they have complied with the regulations and have vowed to robustly defend themselves against the charges. The Premier League declined to comment.”
With two games remaining and the fight for survival still in Sean Dyche and his players’ hands, supporters might have dared to dream of being able to relax after a narrow escape from financial oblivion for another year.
That has gone out of the window now, since whether any of the mooted legal wrangling actually goes ahead in future the threat of it means there is no prospect of relaxing until it is ruled out.
A year ago after assurances from the league Leeds abandoned their plans to sue over the vast losses recorded by Everton when they secured safety on the final day, while Burnley were left to face the music in the second tier – which they navigated spectacularly under Vincent Kompany to win the league and come straight back up – but this year’s relegation rivals have teamed up once more.
It may be that those on the outside are all jumping to conclusions and the position that the club has taken throughout is valid, but it is clear now that there are an increasing set of hurdles to clear in order to prove that.
If the Toffees are found in breach of spending regulations by the independent commission, with a raft of punishments possible including a transfer embargo or a points deduction, that looks like being only the start of the repercussions, with the rivals now geared up to jump in at that point.
It goes without saying that administration would cause havoc, and necessarily bring with a points deduction which would make staying in any league harder, so if there is a sniff of the rules being broken it looks like the prospect of a slap on the wrist and an outcome that isn’t too painful will be out of the question.