THE EAGERLY anticipated three-day judicial review case to investigate claims that the council unlawfully used taxpayers money to take on a £14.4million loan from Ricoh stadium owners Arena Coventry Limited (ACL) got under way today (Tuesday).
The Sky Blues believe the council acted unlawfully when the deal was agreed back in January 2013.
Representatives from the League One Club, the council and the Alan Higgs Trust were in attendance at the Birmingham High Court as day one commenced in a packed out court 18.
Those in attendance included key players in the bitter conflict including Sisu boss Joy Seppala, club chief executive Tim Fisher, ACL director Paul Harris, Peter Knatchbull-Hugessen from the Alan Higgs Trust and council director Chris West.
The day started with Sisu dropping two of its original four arguments before asking for extra evidence to be considered for the case which came as a surprise to judge Justice Gary Hickinbottom.
Then Sisu HQ Rhodri Thompson discussed background information to the conflict including how both parties, ACL and the club, agreed a head of terms back August 2012 which they claim was a beneficial deal for all parties.
It would have seen Sisu wipe out ACL’s debt and purchase a 50 per cent stake in the Ricoh as well as bringing in top entertainment firm AEG to improve ACL as a business.
Sisu argued that they felt a deal had been agreed but as revealed at the previous hearing involving the Alan Higgs Trust, Sisu felt that the council went behind their backs and kept talks with Yorkshire bank a secret while still negotiating with the club.
Emails involving council officers, including Chris West, seem to show the council ‘stringing’ the club along, although the judge did not seem to think it was a problem for the council to keep two possible commercial courses a secret.
Another key piece of information mentioned in this brief history included how back in June 2006, just a month after a deal for the Sky Blues to play at the Ricoh was agreed, the club’s then board members met with ACL letting them know the rent deal was unsustainable.
And in a private memo it was noted that Knatchbull-Hugessen had said the figure of £1.3million was ‘unaffordable’.
One of the key pieces of information to come out of the morning session was that the judge said that ACL was a sustainable business before the Sky Blues stopped paying rent – something the club disagree with.
In the afternoon the court heard how there had been many different valuations of the Ricoh based on how much the club were paying rent.
CBRE had valued the stadium at 19.6million when the club were paying the original full amount of rent to ACL but that figure dropped significantly to just over £6million when the rent was not being paid.
One of Sisu’s claims was that the £14.4million loan did not make sense and claimed the council had based that figure largely on the £19.6million valuation by CBRE.
Finally, it was heard that at the beginning of December 2012 the council were putting pressure on Yorkshire Bank not to do a deal with the club.
An email stated that the council would begin a ‘major media assault’ should the bank agree terms with Sisu.
The case will continue on Wednesday where the court will hear more from Sisu and the council’s legal team are expected to give their document of events in the afternoon.