Coventry Reportedly Taking Council to High Court

Coventry City Football Club are taking the City Council to court over the £14m bailout of the Ricoh Arena company, sale according to reports in the region.

The Coventry Telegraph reported that the Sky Blues want a judge to rule whether the ruling was a lawful use of taxpayers’ money.

In January councillors unanimously agreed to bail out the part council-owned stadium management company Arena Coventry Limited (ACL) by buying out its outstanding mortgage loan with Yorkshire Bank.

The deal allowed ACL to make smaller mortgage payments to the council at lower rates and council officers, including Chief Executive Martin Reeves and finance director Chris West, who sit on the ACL board, had recommended councillors back the move.

After the deal was struck, the Telegraph reported that the £14m had initially come from the council’s ‘cash balances.’

Under a government-approved scheme called Prudential Borrowing, the plan was to refill the funds with council borrowing at a later date.

The Telegraph is now reporting that the football club served papers at the High Court and with Coventry City Council.

They seek leave to appeal, meaning a judge will decide if the High Court challenge has enough merit to proceed to a full judicial review.

The challenge partly concerns whether the council paid above the market value for the stadium company’s mortgage, which could therefore be unlawful under state aid rules.