Why is Swindon Town in the High Court?

The question at the heart of this case is pretty simple: who owns Swindon Town?

Two years ago, football agent Michael Standing and Australian construction mogul Clem Morfuni each obtained court orders preventing Lee Power from selling shares in the club.

Why? Because they claimed they owned a stake in the club.

Morfuni said he’d paid £1.1m for a 15 per cent stake in Town in 2018. That matter was later settled – so he does now own his 15 per cent stake.

Mr Standing said he went in 50-50 with Lee Power, although his involvement was hidden at the time.

Mr Power, by contrast, says that Mr Standing was acting on behalf of Premier League player Gareth Barry.

There’s still a court injunction preventing Lee Power from selling the club without Mr Standing’s say-so. His ownership is disputed and the matter will go to trial at the High Court – either later this year or 2022.

What was Monday’s court hearing about?

Last month, Mr Power failed in his bid to get the injunction relaxed so he could sell the club to American firm AC Sports Wiltshire LLC. He claimed the club was already insolvent and there was a danger of it going into administration if the sale didn’t go ahead.

The judge on that occasion ordered that Mr Morfuni’s company Axis could get access to key documents to allow them to prepare a counter-offer.

So, on Monday there were three things the judge said they’d be looking at:

Firstly, whether the judge should order that Lee Power sell the club to Axis.

Second, an application from Mr Power’s legal team to double the money Mr Standing and Axis need to stump up to help run the club while the legal wrangles continue. It’s currently £300,000 and the application was to increase it to £600,000.

Third, the earlier application to let Mr Power sell the club to Able or put the club into administration.

What actually happened?

In the event, none of those things happened.

The judge adjourned the hearing until June 15, easing a 2019 injunction to allow the sale of the club’s parent company Swinton Reds under “pre-emption rights” or to allow the sale of the club to Axis by “private treaty”. Orders banning Mr Power from placing the club into administration remain in force.

In his judgement, Judge Nicholas Thompsell said there would be three likely outcomes if he did nothing else but relax the 2019 injunction.

First, the current situation for the club continued until the trial at which Michael Standing’s claim to a 50 per cent stake will be ruled on.

Second, Mr Power sold his shares in line with the pre-emption rights.

Third, the club was placed into administration by an external creditor.

The judge said he hoped that the third option would be “so unacceptable that common sense would prevail”.

He added: “But it is possible that it would not, given the lack of trust that there seems to be between the defendant [Mr Power] and the claimants [Axis and Mr Standing].”

Taking the club out of Mr Power’s hands was not a decision the court would take lightly, Judge Thompsell said.

It might be cold comfort for Town fans, but Judge Thompsell recognised the public interest in Swindon Town remaining out of administration. The consequences of administration could include relegation.

The judge also dealt with an application brought by the Football Association. Lawyers asked to be able to see witness statements produced for the legal battle between Michael Standing and Lee Power.

Why did they want them? Well, in April the FA brought charges against Power, Swindon Town and Michael Standing’s company First Touch Pro Football Management – alleging they breached rules around owning and/or funding clubs. They had until the end of April to file their response.

The FA has hired top barrister Christopher Coltart QC to represent them. He’s no stranger to footballing controversies, having represented the Association when it brought charges against Joey Barton and Daniel Sturridge for flouting betting rules.

When can the club be sold?

The club could be sold now – but it’ll require Mr Power and Axis to agree.

Who are Able and what’s their offer?

AC Sports Wiltshire LLC – better known as Able – is a subsidiary of an American based company run by Boston men Bill Keravuori and John Everly.

Mr Keravuori, who could be heard logging out of Monday’s virtual court hearing, is listed on Massachusetts company records as having links to Boston property firm The Abbey Group.

That company’s founding partner and CEO Robert Epstein is, according to reports, Mr Keravuori’s father-in-law – as well as a managing partner of basketball team the Boston Celtics.

Court records show Able has been interested in acquiring Swindon Town since at least August 2019.

Its latest offer, as set out in Monday’s court hearing, suggests it:

:: Had £5.5m to pay off creditors and invest in the club

:: Would pay £500,000 in exchange for the debentures (essentially unsecured loans against the football club  previously held by former owner Andrew Black), now held by Lee Power

:: No clause agreeing to pay the creditors

:: Had already paid £100,000 to the club. This was previously described as a non-refundable deposit for the sale, but on Monday it was suggested this might be a loan

:: Offered undertakings to bring in new management

Who is Clem Morfuni and what is his offer?

Clem Morfuni is a Sydney-based property magnate. He’s been interested in Town since the mid-2010s and in 2017 was named Swindon’s vice chairman. You can read more about that here (it came out in court documents).

Here’s what the court was told of Axis’ offer:

:: Sale price of £250,000, split between Mr Power and Mr Standing

:: They have already given a £267,500 loan to the club

:: £4m had been transferred into a Lloyds bank account ready for any sale. There was around $14m AUS in Axis’ Australian account, including an overdraft.

:: Clause in contract to pay off the creditors

:: Swindon Town supporters’ trust suggested that, if Mr Morfuni took over, it could result in up to £2m-worth of season ticket sales, fans would not seek refunds on last season’s tickets and the Nigel Eady Trust would be prepared to invest up to £3m.  

Why won’t Power sell to Axis?

Put simply, Mr Power says he doesn’t trust Axis. According to his barrister on Monday, he claimed that Mr Morfuni had made a statutory demand against the club “which Mr Power viewed to be very much anti-saving the club”.

Mr Power’s lawyers questioned whether Mr Morfuni would need to pass the league’s “fit and proper person” test – as one of his companies had gone into liquidation. Mr West QC, for Axis, said that he would not.

How big a problem is Swindon Town in?

Last month, it was claimed that Town was in a hole. It had a significant cashflow problem and was described as “hopelessly insolvent”. Insolvency practitioner Paul Appleton, who oversaw the administration process at Bolton Wanderers, had filed a report.

It seems to be in broadly the same place. The club was said to have borrowed £600,000 from the League to pay its recent wage bills. Mr Power was also said to have put in some of his own money.

When will Michael Standing and Lee Power face each other next?

The injunction obtained by Mr Standing in 2019 will go to a full trial – expected to last around five days and see evidence called by both sides.

That trial had been listed for June 2022, due to difficulties in finding a full five day trial slot.

But it now looks like it could be brought forward to September this year. We’ll know more after the next hearing on June 15.

What happened to Mr Standing’s money?

This is potentially one of the biggest unanswered questions. Michael Standing claims he made a verbal agreement with Lee Power in 2013. They would buy the club 50-50, with Mr Power holding Mr Standing’s stake in trust. Mr Standing says he stumped up £800,000 back in 2013 and had loaned £6m since then. The High Court has previously been told that some of that money had been repaid, but £3.7m was still owed. It is unclear what – if anything – happened to that money.

What happened to the debentures?

Hannah Thornley, for Mr Power, said the debentures – essentially loans held by former owners Andrew Black and Sir Martin Arbib – had been triggered.

She told the court: “I’m told by Mr Power that they were triggered when he purchased the shares [in] Seebeck 87 [one of the holding companies] and both Mr Black and Sir Martin Arbib did not foreclose on these debentures or they were happy that Mr Power had taken over the club.”

Ms Thornley said Mr Power could foreclose – essentially demand back the money – on the debentures if he so wished.

He would defer any demand for payment for at least two years if Able bought the club. “He’s not prepared to do so in terms of Axis because he has trust issues with Axis,” she said.

Mr Black told the Adver that he no longer owned the debentures. The Betfair founder said: “They were repayable under certain conditions, and the repayment was triggered last year.”

It was suggested to the court on Monday that Mr Power still owed Mr Black £500,000 and Able had agreed to pay the sum.

And Matt Richie?

There’s been no further mention of the £1.85m fee Swindon Town earned from the sale of former winger Matt Richie from AFC Bournemouth to Newcastle United in July 2016.

Under Mr Standing’s version of his agreement with Mr Power - detailed in the 2020 High Court judgement - that cash should have been split equally between them, netting each around £925,000.

That did not happen. According to High Court papers, Power told Standing that Andrew Black wanted his £2m loan repaid out of the proceeds from Richie’s sale. Standing even handed over another £75,000 in order to make up the difference between the £1.85m windfall and the £2m loan.

In mid-2019, he discovered that the loan had not been repaid. Deputy High Court judge Michael Green QC concluded: "No explanation has been provided by Mr Power as to why he said one thing and did another and the strong suspicion is that those monies were paid to Mr Power not the Club.”