777 Partners, the investment firm awaiting regulatory approval of their prospective takeover of Everton FC, are in yet more legal jeopardy with the news that a California-based institution have filed a $30m lawsuit against them.
The Athletic report that, according to a court summons filed in New York last week, Change Lending LLC, the owner of non-profit The Change Company, the largest community development financial institution (CDFI) started legal proceedings against 777 to recover $17m it invested between September 2022 and February 2023.
The report by Matt Slater suggests that, under the terms of the original deal, “if 777 failed to provide requested financial information to Change, or any “reputational risk” emerged, Change could make 777 buy back the preferred equity at the same price, plus any unpaid dividends.”
In what has become a familiar narrative around 777 Partners, the court summons, Change grew frustrated by “delays and excuses” from 777’s leadership, including co-founder Josh Wander, over unfulfilled requests for “financial statements, including an audited balance sheet of 777’s assets” which prompted Change to trigger its repurchase rights last September.
Change even cited recent media reports around 777’s proposed takeover of Everton and its purchase of Standard Liege that raised concerns about 777’s “business practices” and the source of the money it is using to make these investments.
Change says it has “determined that the 777 Entities were in unsatisfactory financial condition” and that 777 has “exposed Change to unacceptable reputational risks” and that they are entitled to “compensatory and consequential damages” plus the payment of all of their legal costs.
This comes in the wake of a lawsuit brought against 777 Partners’ airline subsidiary Flair by three Irish aircraft leasing companies and a Danish IT enterpreneur who is seeking $1.8m over a separate dispute in Florida.
Having reportedly been cleared by the Financial Conduct Authority, 777 had expected to have heard whether they had passed the Premier League’s Owners and Directors Test by the end of December.