Deal 'unfair to soccer club's shareholders'
Shareholders with a 25% stake in Nottingham Forest football club have launched a High Court bid to outlaw a £6m cash injection deal which they say was improper and devalued their assets.
Former Forest football director and Tottenham chairman Irving Scholar, together with other former directors and pension fund trustees, are claiming the deal was a device to give Nigel Doughty control of the whole business.
Mr Doughty invested £6m in the club with an option to take a majority holding, paying 20.2p each for his initial shares which had previously been valued at 25p.
The deal, spearheaded by Forest chairman Eric Barnes as a way of regaining Premiership status for the club, was described in court by Barbara Dohmann, representing the disenchanted shareholders, as "unconstitutional and improper".
She said: "The petitioners complain about the transaction by the company, which they say caused them serious prejudice.
"There was a package of agreements between the company and Mr Doughty which was highly unusual, if not unprecedented, and was quite clearly a device to deliver control to Mr Doughty while circumventing controls".
Ms Dohmann said the result of the deal was that Nottingham Forest Football Club's board lost control of Nottingham Forest PLC, and she stated: "The impact on the minority shareholders was substantial".
Existing shareholders were never given the chance to buy at the discount price offered to Mr Doughty, nor were they told of a rival offer.
The minority shareholders want the High Court to nullify the deal, which was made in July, 1999.
