Middlesbrough deny £40m legal battle with Derby is preventing sale of stricken club

·4-min read
A general view outside of Pride Park Stadium, home of Derby County. The EFL says it is committed to resolving “a complex legal position” that is threatening Derby’s bid to find a buyer and exit administration. Derby went into administration last September and have been docked 21 points for breaching EFL financial rules.
A general view outside of Pride Park Stadium, home of Derby County. The EFL says it is committed to resolving “a complex legal position” that is threatening Derby’s bid to find a buyer and exit administration. Derby went into administration last September and have been docked 21 points for breaching EFL financial rules.

The Middlesbrough chairman Steve Gibson has responded to claims that his club’s legal action is holding up Derby County’s search for a new owner by revealing a settlement offer was made to the stricken Championship club’s administrators in November and no response has come back.

In a hard-hitting statement from Gibson, whose club are understood to have been chasing damages of over £40 million from Derby, he said that Middlesbrough first made contact in November with Quantuma, the Derby administrators. Gibson said that a compromise deal was proposed by Middlesbrough but there was no response at all until this week, when a reply did arrive from Quantuma that made no mention of the November offer.

Middlesbrough and Wycombe Wanderers both allege that the breaking of the Football League profit and sustainability [P&S] rules by Derby means that, in separate seasons, the two clubs’ destinies were severely affected. In Middlesbrough’s case they allege it is being denied a play-off place in the 2018-2019 season. For Wycombe, they allege that it meant relegation to League One last season. Both have launched an action for damages.

In the meantime, the EFL chief executive Trevor Birch has said this week that it may have to expel the 138-year-old club from the league if administrators cannot prove that Derby have the £8 million funds necessary to survive the season and fulfil their other payment obligations up to the end of June.

Gibson, 64, says that Middlesbrough “does not wish to see Derby County fall into liquidation” and that his club are “happy to be realistic in its expectations in order for Derby County to exit administration”. He called upon Quantuma “to put a firm and realistic proposal forward or merely agree that Middlesbrough’s claim, when finally determined, will be met in full by the new owners.”. He dismissed claims that the legal action was “frivolous”.

In the statement, counsel for Gibson, chairman of Middlesbrough since 1993, said that the demand from his club is that any new owner accept the ruling of the arbitration panel in the event that it finds Derby broke P&S rules. The statement said: “There is a certain inconsistency to the arguments presented by the administrators. On the one hand, it is said that there is no prospect of the claim succeeding, in which case there is no risk for a new owner. But, on the other hand, the administrator apparently cannot find a new owner because they will not proceed without the claim being settled due, presumably, to the fact that it has merit and might succeed.

“If the claim has no prospect of success Middlesbrough does not understand why a new owner would resolve the matter by accepting that the arbitration decision should be honoured. Of course, if the claim has a value as Middlesbrough believes, there is no reason why Middlesbrough should not, as a football creditor, be entitled to recover the monies due to it.”

Gibson and Middlesbrough allege that “Derby County and its directors systematically cheated under the P&S rules” and “that such cheating affects the integrity of the competition”. The statement adds that Middlesbrough first “initiated a claim” against Derby in May 2019 when suspicions were raised about P&S breaches during the preceding 2018-2019 season. A letter outlining Middlesbrough’s claim was sent to Derby in autumn 2020 before the legal action began in January of last year. Derby County used various procedural tactics to seek to delay,” Boro alleged.

The Telegraph reported this week that Quantuma are under pressure to name a preferred bidder or face the prospect of player sales in January to raise money.

Championship rivals Millwall have made four bids for midfielder Louie Sibley, 20, of over £450,000 which have all been rejected by the administrators.

In another serious development, Derby could lose manager Wayne Rooney to Everton this week.

The club are fighting bravely against a 21-point EFL deduction for financial irregularities to do with P&S rules that seemed to have doomed them to relegation. The club went into administration in September, incurring an immediate 12-point penalty. Three bidders are in talks over a potential takeover, including former Newcastle United owner Mike Ashley.

Quantuma were contacted for comment on Tuesday.

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