Ridsdale responds to 30m lawsuit against Cardiff City

Last updated : 15 August 2007 By Michael Morris
I'll post the press statements below from the lawyers and then the response from Cardiff City. Hextalls LLP are the lawyers issuing the writ. They claim the £24m debt owed by Cardiff City is now over £30m with interest added and payments have been defaulted on.

What does it all mean? Well I must admit it's difficult for me to understand what's going on, or at least the truth of what's going on. As far as we are aware the debts were restructured and legal deals put in place when Sam left and the counciil gave final permission for the stadium. I guess what's going on now is that the writ issued is claiming differently or claiming something else, we don't know. Cardiff City appeard to be moving along nicely off the field with the stadium in progress, money coming into the club and stability. Could that be a reason why someone is trying to get a further slice of the action? Who knows. I guess we'll find out in time but it looks like the start of another chapter in the Cardiff City story.

The statements are here and a link to the Western Mail's view.

The press release from Hextalls LLP said, "We act for Langston, the principal financial backers of Cardiff City Football Club. We have been instructed by them to commence proceedings against the club to recover funds amounting to more than £30m.

"Our client's claim is that this sum is due for payment now as a result of the club's inability to meet certain deadlines as well as breaching the terms of its loan agreement in respect of the capital sum plus interest. It had been hoped to resolve the matter privately and in confidence, but the club has repeatedly ignored numerous requests to discuss the debt and its implications.

"As a result of legal proceedings commencing, the issues have now become public and therefore this statement is being made.

"The court action is being taken reluctantly but our client has been left with no alternative following the club's failure to respond to repeated approaches. Our client has serious and increasing concerns about the club's present administration and its ability to manage the club's financial affairs. In the event that the club cannot meet its liabilities to our client, then the alternative is for the current board of directors to resign and our client endorse the appointment of a new board and new management.

"The club's board has also been advised by us that its recently submitted accounts for the year ending May 2006 do not reflect its true financial position. Clubs are, of course, governed by the Football League concerning their solvency and (as has recently been seen in the case of Leeds United FC) circumstances can arise causing a 10-point deduction.

"We are conscious that this situation will cause concern and anxiety among supporters, players and employees, but the club's failures left no alternative.

"The situation has been compounded by the fact that for three months the club's chairman ignored repeated communications regarding the seriousness of the financial situation and there must be concerns if other directors were not informed or, if informed, took no notice. This increased the gravity of the situation and led to final representations being made to the club on August 2, 2007, with a request to respond within seven working days. In the event, an unsatisfactory response was received requesting an unacceptable delay until the end of August.

"It should be stressed that our client remains committed to the club. It was their support that enabled the previous financial problems to be resolved and the stadium project to proceed."

The response from Peter Ridsdale. "We are astonished at the press release sent out today appearing to come from someone representing the Langston Corporation. The new Board of Cardiff City Football Club and Cardiff City Council have for some time been trying to identify who Langston is and have continually come up against a brick wall. Far from refusing to talk to them, we don't know who they are.

"Mr Hammam, our previous chairman, had been acting as the intermediary with Langston and we have been in constant dialogue with him. Indeed, he has always refused to divulge the identity of Langston and therefore we could have never had any direct dialogue with them. It was his auditors who undertook our 2006 audit.

"As the current board have asked their lawyers to deal with the letter from Langston of August 2, 2007, our first direct communication from them (through their lawyers), we feel that this should now be properly dealt with through the legal process.

"I want to reassure everyone connected with Cardiff City Football Club that the success that the current board have enjoyed in overcoming the acute financial hurdles they inherited and getting the stadium scheme funded, will continue.

"Finally the statements in the unattributed press release seem to be an ill-informed mixture of fiction and general confusion, and any allegations and innuendos are refuted."

Click here for the view of the Western Mail.