SKY Blues’ owners are going to the High Court over Coventry City Council’s deal with Wasps for the Ricoh Arena, we can exclusively reveal.
We understand papers have been lodged at court today by Sisu, two days before the former London rugby club’s first Ricoh game as the stadium’s owners.
It is thought to be a legal challenge concerning the latest terms of the council’s loan to Ricoh management company Arena Coventry Limited, now fully owned by Wasps.
The action is related to Sisu’s outstanding High Court appeal against June’s judicial review, which found against the club owner’s claim the loan first agreed by the council last year amounted to unlawful “state aid”.
The £14.4million loan arrangement approved in private by councillors in January last year partly aimed to prevent insolvency of ACL, then jointly owned by the council and the Alan Edward Higgs Charity.
Sisu is waiting to hear in the new year if the Court of Appeal will hear its appeal, after the judicial review judge ruled the council had acted lawfully to protect its shareholding following Sisu’s non-payment of rent, which the club claimed was exorbitant.
Today’s High Court action challenges councillors’ private decision on October 7 this year to agree a package which included selling its 50 per cent shares in ACL to Wasps.
Although the deal is still shrouded in secrecy, council sources claimed it included an agreement that Wasps would pay back £13.4million of the outstanding loan over 20 years, with the council effectively remaining ACL’s bankers.
Wasps now own 100 per cent of the Ricoh after buying the council’s and Higgs charity’s shares, believed to be for £2.77million each, despite a last ditch rival bid to Higgs from the football club.
It is understood papers were being served today at the High Court Queen’s Bench division of the administrative court, separate to the Court of Appeal which would hear Sisu’s judicial review appeal.
Sources claim today’s action is “litigation related to the judicial review”, which could examine whether the publicly unconfirmed terms of the council’s loan agreement with Wasps on October 7 amounted to further “State Aid”.
The action is being taken by Sisu, parent company to the group of companies which run, and lend to, Coventry City Football Club.
Sources emphasised the club itself was not involved in taking the action, and that it would not adversely affect manager Steven Pressley or the team in any way.
It is claimed today’s legal move was not timed to coincide with Wasps’ first game, but because of court timescales related to the appeal.
The council, Wasps and Higgs say the terms of the agreements are commercially confidential.