SKY Blues fans will have to wait until the end of the month before knowing if a judge rules that the council unlawfully used taxpayers money to take on a £14.4million loan from Ricoh stadium owners Arena Coventry Limited (ACL).
A three-day judicial hearing took place this week at Birmingham’s High Court during which the club claimed the council acted unlawfully when the deal was agreed with Yorkshire Bank back in January 2013.
Key players from the bitter conflict were in attendance throughout the hearing which began on Tuesday and ended on Thursday.
Representatives from the League One Club included Sisu boss Joy Seppala and chief executive Tim Fisher. Chris West was present on behalf of the council and ACL director Paul Harris and Peter Knatchbull-Hugessen from the Alan Higgs Trust were also in attendance.
Throughout the three-day hearing both sides gave their arguments in front of a packed out court 18 at at times their were fiery exchanges between both sides.
And the judge presiding over the hearing, Mr Justice Hickinbottom, reserved judgement until the week beginning June 30 when he will reveal his decision.
DAY ONE:
On the opening day Sisu’s HQ Rhodri Thompson took to the stand and provided a detailed background information surrounding conflict including details of a deal agreed by the club and ACL back in August 2012.
Both parties signed heads of terms which would have seen Sisu wipe out ACL’s debt and purchase a 50 per cent stake in the venue but Sisu claim the council had no intention carrying out the deal and instead accused them of ‘stringing the club along’.
Sisu also felt that the council went behind their backs and kept talks with Yorkshire bank a secret while still negotiating with the club right up until early December 2012.
It was also heard how the council were putting pressure on Yorkshire Bank not to do a deal with the club.
One of the key pieces of information to come out of the first day was that the judge said that ACL was a sustainable business before the Sky Blues stopped paying rent – something the club disagreed with.
And in the afternoon the court heard how there had been many different valuations of the Ricoh based on how much the club were paying in rent.
DAY TWO:
Day two saw Sisu’s HQ provide more information about how they felt councillors were not given all of the facts about negotiations between the club and the financial state of ACL before agreeing the loan in January 2013.
Sisu and ACL had been negotiating a rent deal in the region of £400,000 as part of a deal to restructure ACL’s debt but the council claimed the deal was rejected by Seppala.
Previous cases of state aid being rejected in Copenhagen, Denmark and Sweden were discussed with Sisu’s HQ saying the fact the venues in these countries attracted an international audience made them breach EU state aid rules.
The council began their defence by claiming they had no duty to do a deal with Sisu and went on to say they will make £19.4million in interest over the 40-year lease.
They also claimed Sisu were also having secret talks with Yorkshire Bank – something Sisu’ HQ strongly denied.
DAY THREE
Heading into the final day the council continued with their defence by claiming councillors were not misinformed and said taking on the loan made ‘commercial sense’.
They also claim the £500,000 received from the club’s Escrow account was funded by the FA and added that Sisu want to put ACL into a distressed financial position in order to their their hands on the stadium.
The QC for ACL then spoke about the subject of EU state aid law and re-discussed several cases that were brought up on day two.
In comparing the case to Copenhagen, he said ‘Copenhagen can’t be compared to Coventry’ and therefore the EU state law can’t be applied in this case.
Sisu’s QC wrapped up the hearing by claiming that ACL wasn’t an asset worth protecting and said the buyout of the loan was worth more than half of what the council paid despite being given financial advice.
The deal sabotaged any talks between the two parties but Sisu claim they club were still interested in a discussing a rent deal with access to matchday revenues.
They finished by stating that the council should have considered EU state aid law before agreeing to buy ACL’s debt.
