Southend United buyers warn of new court hearing

The consortium said one creditor was unwilling to wait until the takeover was completed

A consortium aiming to take control of non-league Southend United has warned the club could be embroiled in another court fight.

The buyers said a creditor was petitioning for the club to be wound up and a further court hearing was "likely".

In a statement, the group of investors also said the takeover had taken "longer than any party expected".

The club had debts which previously reached £2.5m, but the proposed sale to Australian businessman Justin Rees and other investors was announced in October.

The current owner Ron Martin appeared repeatedly at the Insolvency and Companies Court in London because of winding-up petitioners in recent years, including by HM Revenue and Customs over unpaid tax.

A sales contract for the takeover was signed in December.

Justin Rees leads the consortium trying to buy Southend United FC

“Two main conditions remain outstanding; the completion of the council’s diligence process and the consent of the Martin's finance partner," said the consortium statement, released on Tuesday.

“While the council has kept us updated on their process, which is expected to complete in late April, we have not received a formal response from the finance partner.

“This process has of course taken longer than any party expected and as a consequence we have had to rely on patience from the club’s numerous creditors."

'Distraction'

The statement added: “Unfortunately, one creditor is unwilling to wait until the sale closes to receive repayment and is now petitioning for the club to be wound up.

“While the consortium continues to pay all wages and other operating expenses, we are not willing to fund payouts to historic creditors until we are confident that the closing conditions, over which we have no control, will be met.

“A winding up hearing will now likely occur prior to the sale completing, causing unnecessary distraction and legal costs which will be detrimental to the club.”

The consortium said it had already invested more than £3m.

Court files show that a law firm, Stewarts Law, has issued a winding-up petition.

In November, a report to Southend-on-Sea City Council's cabinet said implications of the takeover had to be subject to all due diligence, including appraisal by the council’s property, legal, financial advisors and the external auditors.

Liam Ager, the editor of the Southend United Fanzine All At Sea, told BBC Essex: "We just keep getting trapped in this endless cycle of existential threat, and dread, and conversations about what we shouldn't be talking about... it's tiring as much as anything."

Southend are fighting to get out of the National League and are mid-table.

They kept alive their slim hopes of reaching the play-offs with a 4-2 home win against Boreham Wood on Monday.