Wearmen face £10m legal bill

NEW OWNER PLANS TALKS WITH SHORT OVER CASH DEAL

SUNDERLAND owner Stewart Donald is aiming to work with Ellis Short to cover a potential £10m bill for legal matters - and avoid the prospect of looking for a loan to bridge the gap.

A national newspaper report yesterday claimned Sunderland had hit ‘cash-flow problems only one month after Stewart Donald’s takeover,’ - and that he is in talks with seven financiers regarding an £8m loan.

While the report contains a kernel of truth in that a loan is an option being looked at, Donald has confirmed in fact the money is needed to cover unexpected legal liabilities rather than a cash-flow problem.

A loan is simply a contingency plan in case Donald and previous owner Short cannot come to an agreement.

Donald said: “As is common knowledge, the club has a huge cash-flow requirement in the next two months but in addition to this there are around £10m in potential liabilities which have emerged, mainly around legal disputes, that were not expected but some of these hopefully may materialise.

“We are discussing these currently and hope to get them resolved without the need for external finance.

“Subject to sensible dialogue with the relevant people, we are very hopeful any loan arrangement is a precautionary back-up position and will not be required.

“The actual likely outcome is the current and previous owners will settle these liabilities between them, resulting in no external finance being taken.

“We will keep the fans updated and in the next few weeks we will be able to confirm either way the outcome of these conversations and its financial implications.”

The exact nature of the legal disputes referred to by Donald have not been revealed but it is likely the £10m figure includes some of the £9m bill Sunderland were ordered to pay to Inter Milan to settle the abortive transfer of Ricky Alvarez.

Donald has agreed to pay Short £40m, that figure due in instalments to help the new owner inject cash into the club this summer.