«Let the FIGC deliver the sale dossier to Blue Skye»- Corriere.it

The FIGC will have to deliver the Milan dossier to Blue Skye within 30 days. The Lazio Regional Administrative Court established it on Tuesday 29 March, accepting the appeal of the finance company against the refusal of the Italian Football Federation. The papers of the administrative procedure, of which nothing was known, illuminate the scene of a clash already started on a civil and criminal level by Elliott’s former partners in Milan. The words of the lawyers are very harsh Gerald Cardinalthe patron of the club, against the judicial offensive of the Blue Skye by Salvatore Cerchione and Gianluca D’Avanzo. And so, while the two managers collect a stage victory and are authorized to collect the folder on the honourability and financial soundness requirements of the new AC Milan ownership filed with the FIGC, for the first time the arguments of Gerald Cardinale and , in photocopies, those of ACM Bidco (99.9% Dutch for Milan), Milan himself and Giorgio Furlani, the club’s managing director.

The two key points

“An unjustified multitude of judicial initiatives” of a “reckless and specious nature” was promoted by Blue Skye with an “unscrupulous emulative purpose … macroscopically aimed at obtaining additional and undue economic advantages”. It’s the premise. Then Cardinale’s lawyers, in the deed filed a few days ago, go to the point, or rather to the two points. The first: the alleged injury to Blue Skye’s interests with the “cancellation” of the pledge. The second: the answer to the doubts on the modality of the transfer of Milan from Elliott to Redbird.

The closed door of the Figc

These are the legal documents of the proceeding before the Lazio Regional Administrative Court initiated by Blue Skye after the FIGC’s refusal to access the deeds of the AC Milan sale. An appeal which, as we have seen, Cerchione and D’Avanzo won. Let’s leave aside the judicial tangle which also consists of a civil proceeding in Milan, a couple in Luxembourg, one in the USA in addition to the investigation file (at the moment without suspects) opened by the Milan prosecutor’s office with the hypotheses of embezzlement and obstacle to supervision .

Blue Skye’s Doubts

Blue Skye was a minority shareholder (4.3%) of Project Redblack, the vehicle with Elliott majority (95.7%) which owned Milan through the Rossoneri company. It considers itself damaged by the sale to RedBird “which took place in such a way as to jeopardize its right to credit”. In its appeals, the finance company has repeatedly doubted, among other things, Elliott’s effective detachment from control of Milan. To verify the validity of these doubts, try to obtain all the deeds of the sale, including those filed with the FIGC.

The pledge? On the proceeds of the sale

But how do Cardinale’s lawyers respond to the question of the alleged cancellation of the pledge, i.e. the damages that Blue Skye would have suffered due to the loss of a guarantee that was due to it pro rata? “At the same time as the release of the pledge by Redblack on the AC Milan shares, Rossoneri has ordered the continuation of the pledge in favor of Redblack on the entire proceeds from the sale”. And here we enter into the details of the numbers of the sale. «They are now subject to the pledge 1) A cash amount of around 600 million paid into the Rossoneri bank account (pledge governed by Luxembourg law); 2) Notes (debt financial instruments, ed) for the nominal amount of approximately 560 million issued by the purchaser under the vendor loans entered into with Rossoneri (pledge governed by Dutch law)». The vendor loans is the maxi loan disbursed by Elliott to RedBird at a rate between 5% and 7%. But the terms and conditions of this financial architrave that bears the weight of the operation and keeps the old and new partners closely linked.

The exact figures of the deal

Let’s go into even more detail: the exact price of the sale was a total of «1,123,036,449.06 euros, in a combination of cash for 533,036,349.06 euros and loan notes issued by the buyer». So Cardinale sends Blue Skye’s complaints back to the sender arguing that “nothing has changed because essentially the pledge has been transferred from the AC Milan shares to the proceeds from the sale of these shares”.

“Elliott has no minority stake”

The second key point is that of the change of ownership. “Contrary to Blue Skye’s assertions, the Elliott group has not maintained any minority stake in AC Milan,” Cardinale’s lawyers say. And even this had never been clearly stated. But let’s go ahead. With the notarial deed «in fact, it was confirmed that on 31 August 2022 RedBird, through ACM Bidco, purchased all the shares that Rossoneri held in AC Milan. Following this transfer, therefore, any shareholding of the Elliott Group in AC Milan has ceased». So the lawyers conclude that “it really is not understood what alleged “mystery” would be connected to the operation in question”.

Where are the Yankees

However, when the sale was officially announced on June 1, 2022, the joint Elliott-RedBird note said: «The agreement, which values ​​the club at 1.2 billion, provides for Elliott to maintain a minority financial stake …». Then nothing more was heard. In the long press release dated August 31 announcing the closing and the beginning of the Cardinal era, the Elliott group which was the counterparty (and which today has a pledge of 99% of the Rossoneri club and collects 115 thousand euros a day in interest from RedBird ) was inexplicably not mentioned, on the other hand it underlined (in the title) the acquisition of a “minority stake in Ac Milan” of the New York Yankees, of which traces subsequently disappeared. Subsequently, the complete corporate structure that governs Milan was never disclosed.

«Nobody controls Milan»

After the closing, and precisely in view of the formal communications to the FIGC, the legal offices of the club had set themselves the problem of identifying the beneficial owners (incorrect information can have criminal consequences), starting with the direct parent company, the Dutch ACM Bidco . They have come to the conclusion that “ultimately no natural person – reads the internal papers – has more than 10% of the club and therefore no one controls Milan”. The result is that the beneficial owners have been indicated, with the residual criterion, the three directors with powers of legal representation: the president Paolo Scaroni, the managing director Giorgio Furlani (and before Ivan Gazidis) and the adviser Cardinale. It is very probable that this photograph is found in the papers filed with the FIGC and, in theory, it should be perfectly consistent with what was ascertained by the notary at the time of the sale and, even earlier (since June), in the communications to the board of directors and the board of statutory auditors . The federal regulations on the acquisition of shares exceeding 10% provide for a verification of the requisites of integrity and financial solidity which can also be extended to indirect controlling subjects.

The rebus

When we have a transparent picture of the current corporate structure, perhaps we will also be able to solve an intriguing puzzle that has remained underground. How come the previous property (Paul Singer’s Elliott group which owned the Rossoneri through investment funds) indicated to the anti-money laundering authority Paul Singer himself as the beneficial owner of Milan while the current property (Gerald Cardinale’s RedBird which similarly owns the club through investment funds) declare to the anti-money laundering authority that nobody controls Milan?

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