Judge Orders Blackpool Owners To Pay Minority Shareholder $40.8M
A high court judge ruled that Owen Oyston and his son Karl, the owners of League One side Blackpool, must pay £31M ($40.8M) to minority shareholder Valeri Belokon for his shares, after operating an "illegitimate stripping" of the club following its promotion to the Premier League in '10, according to David Conn of the London GUARDIAN. Justice Marcus Smith found that the Oystons paid £26.77M out of the club to companies they owned "during and after the single lucrative season in the Premier League" in a manner which involved "fundamental breaches" of their duties as directors, and "unfairly prejudiced Belokon." The Oystons were ordered to pay £10M ($13.2M) within 28 days, and for "all their assets to be frozen while they present to the court how they propose to pay the total, plus millions for legal costs." More than 50 Blackpool supporters who attended the hearing "applauded and congratulated Belokon after the judgment was delivered." Supporters "have been bitterly protesting against the Oystons' running of the club in recent years, and thousands have heeded the Blackpool Supporters' Trust’s call to boycott matches." The cash which Smith found "had been illegitimately paid out of the club" included £11M to a company owned by Owen Oyston, described in Blackpool's '10-11 accounts as a director's salary. The court heard that when Belokon’s adviser, Normunds Malnacs, first saw in Feb. '12 that the £11M was going to be paid to Owen Oyston’s company as a salary, he sent an email that said, "This is out of any acceptable corporate governance norms, even without mentioning the moral aspect of the transaction!" (GUARDIAN, 11/6). In London, Jack Gaughan reported the Oystons "have been left with a staggering bill, one of the largest in British football history, plus costs and interest." Alan Steinfeld, the Oystons' lawyer, claimed the buyout would "financially cripple" Blackpool. That "could force the owners, who are auctioning a huge property worth millions on Tuesday," to sell the club. Steinfeld: "A buyout could send the club into administration. Owen Oyston loves the club. The buyout order will significantly damage Blackpool. We seek permission to appeal. The result on the face of it is astonishing. Throughout, until maybe the last day of the hearing, it was a claim for a buyout on the basis of 20 percent of the company. That came to £11 million ($14.5M) on their figures, disputed by us" (DAILY MAIL, 11/6).
'GAME CHANGER': The BBC reported Blackpool Supporters' Trust Honorary VP Tim Fielding described the mood among those present at the hearing as "jubilant." Fielding: "It's a massive game changer. The figures that they [the Oyston family] would have to pay to keep hold of the football club are huge. We are hoping that this will see regime change. I think the reality is they will have to find a buyer for the club" (BBC, 11/6).