Milan board of directors, a director resigns.  Which takes Elliott to court

Salvatore Cerchione, owner of 4.27% of Project Redblack (the parent company of the club), speaks of the “opacity of the transfer process”. A front could also open up in an Italian court

The sale of Milan from Elliott to RedBird, just ten days after the official announcement, is already in court. Not for a secondary issue but for a lawsuit filed in Luxembourg by Salvatore Cerchione, until this morning a member of the board of AC Milan. Cerchione, owner of 4.27% of Project Redblack, the company that controls the club through Rossoneri Sport Investment, has turned to the court because he believes that the sale to RedBird is not possible without the unanimous consent of Project Redblack. A consent that Elliott would never ask him for. For this, in the next few days he could open a second front, with a lawsuit in an Italian court. Waiting to understand if this dispute could block the sales process, this morning Cerchione resigned as a director of Milan, in total fracture with Elliott, with whom he shared the management of the last few years.

Who is Cerchione

Cerchione, a finance man born in 1971, is one of the two founders of Blue Skye, the fund that is currently a minority shareholder of Milan, holding 4.27% of Project Redblack, the company that controls the club through Rossoneri Sport Investment . Cerchione had a seat on AC Milan’s board of directors since July 2018, the days when Elliott took control of the club from Li Yonghong. He now complains that he was not properly informed and called into question by Elliott, despite him repeated requests for him. In the last few hours, Cerchione has also criticized Elliott with a statement to the Financial Times in which he spoke of the “opacity of the transfer process”. His words: “We are confused about the real reasons behind the sale of the club, especially with such a bright future on the horizon.”

The situation

In short, Cerchione brings back the issue of relations between Elliott and RedBird and in particular the centrality of Elliott in the future of Milan. Elliott, as known for days, has agreed with RedBird for a valuation of Milan equal to 1.2 billion euros, financed the buyer with a loan – according to Il Sole 24 Ore and Financial Times equal to 600 million, according to sources close by. to Elliott by a much lower figure – and will remain in the Rossoneri club as a minority shareholder, with some representatives on the board of directors. Furthermore, rumors about the possibility that Paolo Scaroni will remain president of the club even with the new management are widespread. In the same announcement of the acquisition of Milan by RedBird there was talk of a “partnership between RedBird and Elliott that will give continuity to the progress made under the leadership of Elliott over the last four years”.

And now?

Pending the legal developments of the matter, therefore, the Milan board of directors loses a member. The others, together with the president Paolo Scaroni and the CEO Ivan Gazidis, are Marco Patuano, Alfredo Craca, Giorgio Furlani, Stefano Cocirio, Massimo Ferrari and Gordon Singer. The issue, at this point, is to understand what will happen in the legal seat, if the sales process can be hindered before the closing, the final handover scheduled for September. The club’s operations, on the market and current management, are obviously not affected and will continue as in previous months.

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