Thread by @dhayes_news

Currently my way down to London for the final two days of the Sheffield United ownership trial at the High Court. Seems like a long time since this happened #sufc #twitterblades

Today and tomorrow will feature closing oral arguments from both sides, with Paul Downes QC for Kevin McCabe up first. I think we’ll be going over evidence already heard so I’m not expecting any more major revelations like this one, which happened on day 4 #sufc #twitterblades

Yeah, so getting on the tube when it’s this hot is really horrible #sufc #twitterblades

A nice reminder of home on my way to the court #sufc #twitterblades

Just getting ready in court for things to start. Today Paul Downes QC for Kevin McCabe will be presenting his side’s oral closing argument. He is expected to be on his feet throughout the morning before ending around 2.30 this afternoon #sufc #twitterblades

Sorry for the delay but we’re currently being held up as they rearrange furniture in the court. A bookshelf which the judge needs wasn’t in position and needed to be taken out of court and brought back in the back way! #sufc #twitterblades

Paul Downes QC says he will be addressing the judge today under 12 headings (!). Says there are 6 possible outcomes, only two of which he says would be just. Downes says they are not seeking to get UTB’s shares for £5m #sufc #twitterblades

He also says that UTB getting their shares for £5m would also be unjust. There is also a possible outcome that would give SUL the shares at fair value, and another that would give UTB the shares are fair value, he says #sufc #twitterblades

The fifth outcome would be to rerun the call option process but with UTB going first this time and the sixth would be to leave the club in 50/50 ownership. Downes says it is possible this last one ‘could prejudice the club going forward’ #sufc #twitterblades

Downes says today he will go through the main issues in the case and begins by taking about what he calls the ‘Bettis debacle’. Says he wants to meet this particular criticism ‘head on’ #sufc #twitterblades

Stephen Bettis’ position as CEO was a bone of contention between McCabe and the Prince after McCabe wanted him to leave and stopped his pay without telling him. Striking this is the first point. An indication that they acknowledge their weakness on it? #sufc #twitterblades

Downes going over the evidence Stephen Bettis gave to the court earlier in the trial very closely. Says McCabe’s genuine belief was that Bettis would be leaving at the end of May 2017 when he moved to Los Angeles #sufc #twitterblades

‘Kevin McCabe made no secret of his expectation that Stephen Bettis would be leaving’, says Mr Downes.
Mr Giansiracusa, however, started making arrangements for him to continue his role part time, something McCabe said in his evidence wouldn’t work #sufc #twitterblades

‘Stephen Bettis accepted he would be going on October 31’, says Mr Downes. References Bettis’ words at a board meeting: ‘If he still wants me to leave I will. If people want me here I will be, if not I will step down’ #sufc #twitterblades

The judge then says that Jeremy Tutton didn’t request that he left at that meeting, therefore there must have been some ambiguity about it. Downes says this is possible but says a more likely reason is that no one went back to McCabe about the change of plan #sufc #twitterblades

Downes accepts there are justified criticisms about the way Bettis’ pay was stopped. Says other directors and Bettis himself shoud have been told. Judge asks why it was done in such a ‘cloak and dagger’ way #sufc #twitterblades

Downes says there were three reasons. One is that it was a ‘knee jerk reaction’ from McCabe’s holiday home in Spain. Two that he didn’t want further confrontation with Giansiracusa and three was that he was angry that with SB that he hadn’t already resigned #sufc #twitterblades

‘I am not saying we come here blameless’, says Mr Downes. But, he says, there was wrong on both sides and Mr Giansiracusa was undertaking a ‘rear guard action’ to keep Mr Bettis in place #sufc #twitterblades

We’ve now moved on to taking about the position of finance director Simon Ratcliffe. Downes says UTB don’t have a leg to stand on and are hoist by their own petard by saying McCabe was overreaching his authority. Says it was actually UTB who were overreaching #sufc #twitterblades

The judge says the criticisms are about the process and that Mr McCabe were about it in a way that UTB regarded as unacceptable. Downes say the issues are ‘minor’ and ‘not a hanging offence’ and are not the basis on which UTB later complain #sufc #twitterblades

Context: Ratcliffe’s appointment as finance officer led to disagreements between the sides over who he would report to, whether it would be to the club or UTB. UTB allege McCabe inserted reporting lines in his contract against their wishes #sufc #twitterblades

Downes says UTB’s real issues were management problems, the ‘rocking the boat’ and the involvement of Deloitte’s. ‘They had no right to Deloitte’s coming in or the appointment of Mr Van Winkel under the original agreement,’ says Mr Downes #sufc #twitterblades

Moving on to the incendiary email Mr Giansiracusa sent to McCabe when the relationship broke down. Downes says it goes beyond the robust, is deeply offensive, contains allegations of the most grave kind and is a full frontal assault on McCabe’s legal rights #sufc #twitterblades

‘If the agreement required good will and a positive relationship the email was prejudicial to the value of #sufc and undermined and made more difficult cooperation between the two sides’ says Mr Downes #twitterblades

Downes is now moving on to what caused the call options to be actioned in late 2017 and early 2018. This was also the time that Alan Pace and ALK Capital were discussing investing in the club. Pace’s £10m was not ready in December, however #sufc #twitterblades

Mr McCabe was ‘reaching out’ and asking for communication from the UTB side, says Mr Downes. Emails from McCabe asks whether Prince Abdullah wants to ‘destroy their relationship’. Downes says Prince Abdullah refused to meet with McCabe #sufc #twitterblades

Downes says it is their case that McCabe triggering the call options was caused by or contributed to by the ‘newly aggressive stance’ from UTB. ‘The hostility was unprecedented’, says Downes with talk of ‘war’ and ‘leashing the dog’ #sufc #twitterblades

Mr McCabe was ‘fed up’ says Downes and there was no indication at that time they we’re going to make a killing. There was a ‘war of attrition’ going on and they wanted out - and out quickly - because of the ‘high octane’ strategy coming from Mr Giansiracusa #sufc #twitterblades

Downes says UTB called the allegations that they were trying to avoid the property options ‘offensive and contemptible’. ‘But that is exactly what they were doing’. It was ‘underhand, sneaky and tricky’, he says #sufc #twitterblades

Downes now moving on to legal precedents about cases involving quasi-partnerships of the kind that McCabe and the Prince were involved in. All very complicated stuff about ‘inferred subjective expectations’ so I’m not going to bore you with it! #sufc #twitterblades

And with that we’ve broken for lunch and will be back at 2pm #sufc #twitterblades

Forgot to mention earlier that neither Kevin McCabe nor Prince Abdullah are here today. I’ve just seen that Mr McCabe is at the announcement of United’s new shirt sponsor so that explains his absence but am not sure why the Prince isn’t here #sufc #twitterblades

We’re back after lunch and Mr Downes has gone back to the legal precedents he was discussing before the break. He is referencing cases in which the ruling went beyond the written document and looked at the true intentions of the parties #sufc #twitterblades

Downes says that precedent shows that there are situations in which both parties are at fault in which there are ‘unrecorded rights, expectations and obligations’ #sufc #twitterblades

Downes: ‘There was a clear expectation that there would be equality in the amount that would be put in by both parties going forward but the funding of the club was not made explicit in the original agreement’ #sufc #twitterblades

Downes develops his argument by saying that there were lots of things that are not menioned in the agreement. Asks what if the Prince has said he was a Sheffield Wednesday fan or started talking disparagingly about the city’s inhabitants #sufc #twitterblades

Downes says that the idea that McCabe would be a ‘teacher’ and a ‘guiding hand’ to Prince Abdullah was one of the unrecorded expectations that was implicit in the initial agreement between the parties #sufc #twitterblades

Downes says there was an ‘implied duty of good faith and cooperation’ in the initial agreement signed by the two sides in 2013. Says Mr Giansiracusa’s actions in forcing the Prince’s decisions on McCabe breached this duty. Says it is clearly unfair prejudice #sufc #twitterblades

Downes now talking about the bribery allegations and the Bin Laden loan. The judge questions him about whether it is still their case that the loan was a bribe. Downs says it is and even the impression of impropriety could bring the club into disrepute #sufc #twitterblades

Downes now taking about the alleged bribe and it’s possible creation of a conflict of interests. Says precedent shows that it doesn’t have to be a real conflict of interests but merely the possibility of one #sufc #twitterblades

Downes: ‘Even the hint of corruption at a business like #sufc has potentially devastating consequences on the relationship with bankers, sponsors, staff, player transfers and the EFL. There has to be zero tolerance’ #twitterblades

Downes says Prince Abdullah ‘calmly and convincingly’ gave false evidence about Dr Rakkan’s involvement with Mr Bin Laden and the evidence suggests that there was a much closer relationship between the two than he has admitted #sufc #twitterblades

Downes says Prince Abdullah ‘brought the problem of the loan into #sufc and it is a real problem’ which could have had profound negative consequences for the club #sufc #twitterblades

Now taking about the Bettis situation and Giansiracusa’s actions in advising him to take action against the club. This was a ‘clear breach of his fiduciary duty to the club’, says Downes. ‘The red mist had descended’ #sufc #twitterblades

Downes says the scheme cooked up by Giansiracusa is a ‘serious breach of the duty of fair dealing’ and that taking advantage of someone else’s mistake is tantamount to dishonesty #sufc #twitterblades

Downes now taking about precedent regarding good faith and honesty. The agreement entered into by the two parties in 2013 doesn’t explicitly say such a duty exists but McCabe’s side argues that good faith is an implicit element of relational contracts #sufc #twitterblades

Downes: ‘If the ISA doesn’t work the relationship wont work and if the relationship doesn’t work the ISA won’t work either. Of course there has to be give and take in order for both sides to work together effectively’ #sufc #twitterblades

Downes: ‘The relationship is key to the decision about whether to put more money into the club or not. It had to be functional and there has to be communication and trust’. The scheme was against the fair equitable exit mechanism envisaged by the agreement #sufc #twitterblades

Downes taking about the agreement and it’s incompatibility with there being three shareholders as there were when UTB transferred half theirs to UTB 2018. Goes on to say that there is a ‘general prohibition’ against doing what UTB did in the agreement #sufc #twitterblades

Downes says the scheme UTB dreamed up to park the shares made managing the club on a consensual basis impossible and brought detriment to the shares owned by the other side. ‘They moved the goalposts after the ball had been struck’ #sufc #twitterblades

Downes says the conduct of UTB both in the scheme and the personal campaign against Mr McCabe was destructive of the relationship of trust between he parties. ‘That is a repudiatory breach’, he says #sufc #twitterblades

Downes: ‘If UTB has acted lawfully the agreement come to an end consensually. But they did not act lawfully, litigation was inevitable, there would be delay and the nightmare continues for another 15 or 16 months’ #sufc #twitterblades

Downes now turning to the mistake McCabe made in making a very low offer for the club which was subsequently outbid by UTB. Citing precedent from a case about Argentinian pears 🍐 I think, or that could be been my hearing 😂 #sufc #twitterblades

Downes says precedent suggests that the reason for the mistake doesn’t matter in law. Also says the mistake was not mutual but unilateral. One party knew of the mistake and ‘snapped up the offer’, he says #sufc #twitterblades

Downes says ‘equity will never enforce an unconscionable bargain in chancery courts’.

Sorry, pressed send on that last one too soon. Downes is saying I think that the core legal principle of equity means that the mistake that McCabe made - and which UTB knew about - should effectively make the buyout from UTB side null and void #sufc #twitterblades

Downes saying the huge change in the circumstances of the club between January 2018 and now makes this point even more important #sufc #twitterblades

Downes: ‘My client feels very strongly that this club if it goes to the UTB side it could be heading for very stormy waters. We have been seeking to persuade your Lordship to give us control of the club as we have its best interests at heart’ #sufc #twitterblades

And that concludes Paul Downes QC’s closing arguments for McCabe. Up tomorrow is Andreas Gledhill QC for Prince Abdullah and I’ll be back here at 10.30. Thanks for following #sufc #twitterblades

My report from the High Court as the Blades trial enters its final two days.

thestar.co.uk/business/blade…