It never rains but it pours: High Court hearing for Charlton

 Charlton Athletic are being taken to the High Court over an alleged £500,000 debt owed to Paul Elliott, a Manchester-based businessman who attempted to buy the southeast London club in 2020.

The claim, filed on November 29, alleges that Elliott lent the club the sum after agreeing to purchase Charlton from the majority shareholder at the time, East Street Investments (ESI). The loan is said to have subsidised running costs, such as player and staff wages, to avoid the club going into administration and receiving a points deduction that would guarantee their relegation to League One.

The new claim is central to one of the most chaotic and controversial periods in Charlton’s history, reports The Times. After six miserable years under the ownership of the Belgian businessman Roland Duchâtelet, the club were sold to ESI in November 2019. However, just a few months later, the Abu Dhabi-based majority shareholder, Tahnoon Nimer, fell out spectacularly with the chairman, Matthew Southall.

Nimer publicly accused Southall, a former football agent, of using club money to fund a lavish lifestyle, including leasing expensive flats and purchasing a fleet of luxury cars, and said he was withdrawing his financial backing. Southall denied the accusations and claimed Nimer had failed to invest “a single penny of the promised funds” after their takeover was completed.

A consortium led by Elliott subsequently agreed to purchase the club from ESI — a civil court hearing later revealed the fee was just £1 — at the height of the pandemic, when the club’s financial situation was extremely precarious. The club were relegated to League One and there were genuine fears they might collapse. The alleged £500,000 loan is said to have staved off that threat.

However, after Elliott’s consortium failed the EFL’s owners’ and directors’ test, the Danish entrepreneur Thomas Sandgaard acquired the club from ESI in September 2020. Sandgaard claimed the following month that: “Since December or January no money has been put into the club. It was basically running with money from the EFL and some sponsorship money.”

That statement appeared to contradict Elliott’s claim that he had invested £500,000, which will now be challenged in the High Court. It is understood the club had previously acknowledged the loan in correspondence but that an offer to reimburse Elliott was never made.

Charlton were sold again in 2023 to SE7 Partners. The club said they were aware of the claim, which they stressed was related to the previous ownership, and have now referred it to their lawyers.