Former Crystal Palace owner John Textor scores temporary block of Brazilian football club share sale
Former Crystal Palace owner John Textor has been granted a temporary injunction from the High Court to block City-based administrators from selling his 90 per cent stake in Brazilian football club SAF Botafogo.
The order follows the American business mogul launching multiple parallel lawsuits in England, the US, and Brazil against his UK holding company, Eagle Football Holdings Bidco, to regain control of his shares after the company was taken over by administrators in March after plunging into insolvency by its main creditor, US investment firm Ares Capital Corporation.
The insolvent holding company is now controlled by administrators from London insolvency firm Cork Gully, who immediately began looking for buyers of the shares the company holds in Botafogo in March.
However, the High Court on Wednesday granted Textor an injunction to block the administrators from selling the Botafogo shares until at least 9 September, when the case will be heard again.
A Brazilian court previously refused Textor’s request for an injunction, but Judge Mark Pelling KC said in the UK, “the position is now materially different” as the administrators have since withdrawn a formal undertaking agreement not to sell the shares.
“There is now an implied risk the shares will be disposed of sooner rather than later,” Pelling said.
Textor had sought to regain control of his 90 per cent stake in the Brazilian club, alleging Bidco breached its contract by failing to pay him for the shares after the insolvency.
Textor was also removed from his position on SAF Botofogo’s leadership board in April by a Brazilian Arbitration court.
A no-show from the administrators
Eagle Football Holdings Bidco has not participated in any of the English legal proceedings so far, only sending a letter to the court alleging the injunction would not risk a breach of any potential sale contracts.
The judge said the company’s decision not to join proceedings or give evidence other than the letter creates a “difficulty” as the court had to rely on Textor’s account that the shares remain unpaid, favouring the injunction.
In a statement on his website, Textor said if Eagle Football Holdings Bidco “continues to elect not to appear” in legal proceedings, “and not to defend or oppose” his claims, “then intermediate measures (such as injunctions) will be less important, and it should be only a matter of time when Textor’s claims of ownership prevail through the full proceedings and Textor is re-established as the owner of SAF Botafogo.”
Cork Gully, Eagle Football Holdings Bidco, and John Textor were contacted for comment. Ares Capital Corporation declined to comment.