Out of the BluesJosh Wander and Steve Pasko have been removed from the board of the football division of 777 Partners after bankruptcy specialists were called in.By Paul Brown and Philippe Auclair
If all the talk this week has been about Everton potentially having to go into administration as a result of doubts over their takeover by 777 Partners, it is actually the Miami firm itself which is fighting for its future having called in the receivers, as confirmed in an internal email signed by owners Josh Wander and Steven Pasko, which Josimar has seen, and which was shared with staff on Thursday.
Ian Ratner and Ron Glass of B. Riley Advisory Services have been brought in “to take on governance roles within our organisation”. What these roles will be with 777 Partners may be inferred by their past records. Mr Ratner lists “bankruptcy advisory services” and “bankruptcy litigation” among his areas of expertise, while Mr Glass, who has also worked as a liquidating agent and a receiver, quotes “bankruptcy proceedings” and “crisis management” in his.
Another B. Riley executive, Mark Shapiro, has been called in to oversee the company’s operations as ‘interim Chief Operating Officer’. Mr Shapiro too has a wealth of experience in “restructuring” and bankruptcy proceedings .
Josimar understands that Ron Glass was onsite at the offices of 777 Partners in Miami on Friday shortly after the news of his involvement broke, and that both Wander and Pasko have already been removed from the board of the entity which runs all of their football operations. Nutmeg Acquisitions LLC, a Delaware-based company which controls Red Star FC, Genoa CFC, Standard de Liège, Hertha Berlin and Vasco da Gama as well as 777’s minority shareholding in Sevilla FC and Melbourne Victory (*), is now being run by operating partner Don Dransfield, formerly of City Football Group.
Such dramatic news will not come as a great surprise to Josimar readers, but the suddenness with which the sprawling empire of companies operated by 777 Partners appears to be crumbling still comes as a shock. In fact, it is important to note here just how little is left of that empire. Wander and Pasko have long claimed that 777 Partners operated 60 companies in a variety of sectors. It does so no longer.
The first domino to fall was the group’s Australian budget airline Bonza, which fell into administration after its fleet of planes was repossessed by AIP Capital, until recently a 777 subsidiary itself before it became part of a larger entity controlled by Kenneth King of A-CAP. As part of this deal, 777 lost control of all of its aircraft leasing operations and the rights to its remaining purchase order with Boeing, and its name promptly disappeared from the aerospace manufacturer’s order book.
777 Partners also has a Canadian budget airline on its books called Flair. But in another deal involving King, it has been forced to reduce its shareholding from 25 per cent to less than ten. All this is significant because until recently, King was 777’s biggest backer and only remaining source of funding. That all changed when the firm’s Bermuda-based reinsurer 777re suffered a credit ratings downgrade in February of this year. As a result, King and the insurance companies under the A-CAP umbrella were forced to “disinvest” from 777 Partners. But King, who has lent over 2.5 billion US dollars to the ailing group, is also under scrutiny from regulators looking into his insurance business in the USA.
So what exactly is left of 777 Partners? The football clubs, though loss-making and mired in debt, remain under the firm’s control. So do the structured settlement businesses in which they first made their name. There is a lease-to-own company based in Tampa, Florida which offers customers an alternative to traditional credit, a litigation finance division which has itself been the subject of lawsuits, some fintech investments, and stakes in the British Basketball League and its flagship franchise the London Lions, both of which are loss-making. In short, not much of the empire which once claimed to manage 10 billion dollars in assets remains.
The upshot of all this is that the attempted takeover of Everton by 777 Partners, which current owner Farhad Moshiri had agreed on back in September 2023, is utterly dead in the water, and the financial picture of the firm as a whole remains precarious.
Earlier this week, a 777 Partners insider told Josimar that “no more money [was] coming in” – or going out either, as is exemplified by the dire situation of Standard de Liège, which, according to multiple Belgian sources, has stopped processing all but the most essential payments and now faces the prospect of repossession, following complaints filed in Liège by the club’s former owner Bruno Venanzi and the shareholders of the Immobilière du Standard, the company which had sold the stadium to 777.
Neither had received the second tranches of the payments 777 was bound to make to them by 20 April. A judge will decide whether to seize 777’s Belgian assets or not by 15 May. Ultras who had been demonstrating against the firm’s involvement with their club for months came in their hundreds to the club’s training ground on Friday 10 May and prevented their players from going to the Stade de Sclessin, where they were supposed to play against Westerlo that evening. The match was cancelled as a result of their action.
Genoa CFC, which still is in debt to the tune of 210 million euro despite getting a 65 percent tax rebate from the Italian Inland Revenue, is also said to be going through a delicate period. The doyen of calcio announced it would not apply for a UEFA licence for the 2024-25 season. “We considered whether to ask for the licence until the last moment”, Genoa’s CEO Andres Blasquez said. “We preferred not to when we knew we had no chance of taking part in [UEFA competitions], avoiding unnecessary sacrifices.
We’ll get the licence next season.” Another explanation was provided by a local source: in order to obtain the UEFA licence, Genoa would have had to pay what it owed in transfer fees to other European clubs by mid-March and was apparently not in a position to do so. Genoa CFC must also pay for its Serie A licence by 15 June at the latest.
The shockwaves will also be felt in Australia, where 777 Partners were set to increase their shareholding in Melbourne Victory FC: the club’s main sponsor was Bonza.
Banners deployed at Standard de Liège’s Sclessin stadium before their cancelled game against Westerlo, 10 May
It looks as if the straw which finally broke the camel’s back was the filing of a complaint for fraud and double-pledging of 350 million dollars of assets by one of 777 Partners’ main lenders, Leadenhall Capital. That lawsuit accused Wander and Pasko of “operating a giant shell game at best and an outright Ponzi scheme at worst, that takes money from investors and lenders and shuffles it around to various money-losing alter egos in the enterprise” and that Everton is merely “the latest shiny object of Wander’s fraudulent scheme.” But at some point in any shell game, the shells have to stop moving. It appears we have reached that point for 777 Partners.
777 Partners, Ian Ratner and Ron Glass were contacted for comment.
(*) Nutmeg Acquisitions LLC controls Red Star through 777 Holding Entity France, Genoa CFC and its Sevilla shares via Sevillistas Unidos 2020 SL, Vasco da Gama through 777 Carioca LLC, Hertha and Standard through 777 SDL BV, and Melbourne Victory through 777 MV LLC.
Source:
Josimar