RedBird Capital have publicly responded to Blue Skye and their quest to bring the takeover of AC Milan to the courtrooms.
Calcio e Finanza recalls how Blue Skye – a minority shareholder of Project Redblack, the company that controls Rossoneri Sport Investment, which in turn controls Milan – has obtained the green light from a United States Court to obtain documents to bring bring its case against Elliott Management in Luxembourg.
They believe that the sale of the majority of the shares by Elliott to RedBird Capital was done without them being privy to any of the discussions and thus they have launched a counter move by obtaining the aforementioned documents.
Now, RedBird itself came out in response to Blue Skye’s request for documents in the Luxembourg lawsuit, as the latest article on the Calcio e Finanza website relays.
“Blue Skye will profit from this transaction and its lender [Arena Investors] has publicly praised the purchase price, which represents a significant increase in value since Elliott-affiliated investment funds acquired the team about five years ago and made fortunes on the field and financially,” they began.
“But after first attempting to become a co-investor in the transaction, and then halting it for months behind the scenes, Blue Skye has now filed two lawsuits in Luxembourg against more than a dozen defendants, with whom it seeks the ‘cancellation of the operation’, we read again in the document that reports the position of RedBird on the issue.
“Blue Skye has also filed this application under section 1782 of title 28 of the United States Code asking for permission to notify a subpoena to the RedBird buyer, on whom it seeks to impose an immediate and permanent obligation to produce every single document relating to the transaction, a few weeks before the scheduled closing, presumably ‘for use’ in the Luxembourg lawsuit.
“That Blue Skye’s real intention here is not to obtain documents to help it settle its claims in Luxembourg, but to stop and increase the costs of the transaction so that it can extract more value than it is entitled to under its share, it is evident for a number of reasons.
“In Luxembourg, Blue Skye claims that the sellers took action in breach of one of these contracts, […] but RedBird had no contractual obligations towards Blue Skye and has no direct knowledge of Blue Skye’s contracts with the sellers or others potential buyers.
“Any documentation that Blue Skye actually needs to establish its claims can be obtained from the parties to the Luxembourg lawsuits, which include Elliott, with whom RedBird has negotiated. […] It is these entities and individuals who will have information on alleged contractual violations and other offers to purchase the club and Blue Skye.”
“On the contrary, RedBird is unlikely to have any relevant documents, and certainly not those that could not be obtained by the parties present. It is evident that Blue Skye’s real motivation for using section 1782 is not because RedBird has documents relevant to its causes that cannot be obtained in Luxembourg, but because Section 1782 is the most convenient way to strike now. This Court should not accept this tactical use of Section 1782.
“Any collection, search, review and registration obligations would take weeks or months to meet with significant expense. This burden is not justified given the breadth of subpoenas, the marginal relevance of the required documents and the fact that the relevant documents can be obtained in Luxembourg. For this reason, if Blue Skye is allowed to obtain documents, RedBird should be relieved of the fees and costs to comply.”
“This shift in costs is justified here, given the incredible burden RedBird faces in trying to meet the broad demands of Blue Skye, which a reputable and experienced document provider estimates would cost over $ 1.7 million.”