Courts support fixed charge receivers in selling football club

The receivers applied to court for directions in respect of their intention to sell the shares and assets to a preferred bidder.

Three issues were in front of the court:

1. did the receivers need approval of the court to proceed with the sale to the bidder?
2. how should the minority shares be dealt with?
3. assuming the answer to the first question is "Yes" and the second question is satisfactorily resolved, should the sale then be approved?

The Judge held that it was proper for the receivers to apply back to the court on their intention to sell as that is what previous court orders in the proceedings had held.  He also agreed that the receivers could seek directions from the court akin to administrators or trustees and found that the receivers had acted entirely appropriately in making the application and had the right to seek the court's approval.

On the question of how the Shares should be dealt with, the Judge held that he could vary his own order pursuant to CPR 3.1(7), to enable a sale, in respect of those provisions that are interlocutory, rather than final in nature, if there had been sufficiently material changes. 

The Judge found that there had been a number of highly material changes since the order was made, including non-compliance by the Respondents. 

He therefore varied the order so that the sale of the shares to the bidder, and payment by the bidder of the consideration for the club to the receivers, were deemed to constitute the purchase of the shares by the Respondents, and also the sale by the Respondents of the shares to the bidder in accordance with the terms of the original order.

The Judge asked himself whether the exercise of the power by the Receivers was a lawful one and within the scope of the powers conferred on them by the Order.  He concluded that it was, finding that the price followed a competitive process, was a reasonable one, the Bidder was clearly the best bid and the sale should therefore proceed, particularly in light of the urgency of the situation.

Cooper & Anor v Blackpool Football Club (Properties) Ltd & Ors [2019] EWHC 1599