Expert lifts lid on takeover snag
Kyril Louis-Dreyfus’ takeover of Sunderland AFC has reportedly hit a snag - and an expert has now offered some more insight into what is thought to be holding up the deal.
Louis-Dreyfus agreed to purchase a majority share in the club from Stewart Donald on December 24, with documentation lodged with the EFL shortly after.
And while there were hopes a deal could be completed by mid-January, Sunderland and Louis-Dreyfus are still awaiting the green light from the league sanctioning the ownership change.
Weekend reports in the Sun suggested that the league were looking for assurances from Donald and fellow shareholder Juan Sartori before passing through the deal.
The duo are both set to retain minority stakes in the club after the deal is completed, and report suggested that the EFL have asked for guarantees that they will continue to fund the club alongside Louis-Dreyfus for the next two years - and that the takeover will be approved once those assurances are given.
While there is a confidence that this hurdle can be overcome and the deal pushed through, takeover expert Kieran Maguire has explained exactly why the EFL will be looking for these assurances from Donald and Sartori.
Speaking to the Price of Football podcast, he said: “The EFL have said that part of the owners and directors test is that the key shareholders have to commit to finance and fund the club for the next two years.
“So therefore, Sartori and Donald would therefore be included within that.
“Here we're entering what's referred to in partnership law as joint and several liability - were if there are three or four of you involved in a business, if one of you fails to pay the bills then the remaining partners effectively become responsible for them.
“That's where the problems start to arise, because Sunderland have run out of their parachute payments.
"They're in League One, they've got high overheads and they've got all the costs of running the club.
"But they don't have any of the benefits of having the significant numbers of fans that they would normally anticipate.”