Scrutiny of Everton's prospective buyer intensifies after airline collapse and New York fraud case

GENEVA (AP) — A grounded airline in Australia. A lawsuit in a New York federal court alleging fraud in connection to a $600 million loan. And angry soccer fans in England resisting a takeover of Premier League club Everton.

These are troubled times for Miami-based 777 Partners, the investment group that recently joined the wave of American owners in European soccer but is facing mounting problems in both the business and sporting world.

777 Partners owns soccer clubs in Germany, Italy, Belgium and Brazil but has failed to get approval for its bid to buy storied English club Everton — and the opposition is just growing stronger after its recent legal turmoil.

The Everton FC Shareholders' Association issued a statement on Tuesday calling on the club's board to “recognize that 777 Partners are not at this time fit-and-proper prospective owners.”

Earlier Tuesday, financial administrators of the collapsed Australian airline Bonza — which is owned by 777 — confirmed that all flights are canceled for one more week. The administrator added that it was “not in a position to process or issue refunds (to customers) on behalf of the company at this time.”

Last week, a suit was filed against 777 owners Josh Wander and Steven Pasko, plus others, in the southern district of New York by a London-based asset management firm providing $600 million in financing.

The suit alleges that about $350 million of collateral for the loans was not controlled by 777 or was already used as security with other lenders, in a practice known as “double-pledging.”

The 82-page suit on behalf of Leadenhall Capital Partners claimed that the owners were “operating a giant shell game at best, and an outright Ponzi scheme at worst.”

777 is “declining to comment at this time,” the company said in an emailed reply Tuesday.

The group moved heavily into soccer in 2021, buying up some of the many distressed clubs recovering from playing in empty stadiums during the COVID-19 pandemic.

“There was a unique opportunity the past three years to kind of get in at a good price point,” Jonathan Lutzky, an operating partner at 777, has said.

Here's a look at how those ventures are going.

777 reached an agreement with Everton in September to buy out the 94.1% stake of the club’s majority shareholder, Farhad Moshiri, subject to the approval of English soccer authorities.

The deal was expected to be completed last year but still hasn’t been finalized, leaving Everton -- already in financial strife and hit with two separate points deductions this season for overspending -- unable to plan for the future.

When asked by a parliamentary committee about the delay to the Everton takeover, Premier League chief executive Richard Masters said in January that certain deals take longer “if we haven’t had satisfactory answers to the questions we have asked.”

The Everton FC Shareholders' Association said Tuesday of the prolonged takeover bid that it was disrespectful “to allow this farce to continue.”

At least Everton has guaranteed its top-flight survival, ensuring access to the league’s huge pot of cash from broadcasting deals and prize money for another year.

Standard Liege fans have regularly protested against the American investors this season, amid reports of players’ wages being delayed. When Newcastle midfielder Isaac Hayden ended his loan spell at Standard mid-season, he cited the late payment of wages as the main reason.

Belgian media reported on Monday that the club's former owner Bruno Venanzi and shareholders of the company holding the club’s stadium had requested the seizure of 777’s assets in Belgium, arguing that the private investment company had defaulted on two tranches of payment.

The Liege tribunal did not immediately respond to a request for comments from The Associated Press.

Hertha Berlin was hoping for a change in fortune when 777 Partners took a 78.8% stake in March 2023, but it was too late to stop the team’s relegation from the Bundesliga and the money has only serviced existing debts.

Hertha faced an anxious wait before getting its second-division license thanks to a restructured loan. The club made no major signings and was forced to offload players. A team of youngsters avoided another relegation to the third division this year.

777 promised Hertha a 100-million euro investment when it took over. So far, it has delivered about 75 million euros.

Italy’s oldest soccer club was bought by 777 in 2021 and has since had serious issues with tax authorities.

Genoa was relegated from Serie A after 777’s first season in charge but then earned promotion back into the top flight after only one season in Serie B – despite being deducted a point for failing to pay income taxes in September and October of 2022.

Currently 12th with three rounds remaining in Serie A, Genoa has also secured a spot in Serie A for next season.

Genoa chief executive Andres Blazquez Ceballos was fined 6,000 euros ($6,500) by the Italian soccer federation for the tax payment failures.

In Brazil, 777 took over top-tier club Vasco da Gama’s soccer department in 2022 in a business operation locals know as SAF -- creating public limited companies in clubs often on the brink of bankruptcy. The tactic separates the profitable soccer departments from the rest of the club, which remains under control of its members.

The team from Rio de Janeiro narrowly avoided relegation from last year’s national championship and a financial statement published in March showed debts remain too high and investment is low. The club’s debts were at 700 million Brazilian reals ($178 million) when 777 took over. Only 210 million Brazilian reals ($41 million) have been cut so far, a massive difference compared to other clubs that adopted the SAF business model, such as Botafogo and Cruzeiro.

Club executives repeatedly accused 777 of delaying payments and causing problems for the squad.

“We are sitting on a time bomb,” Vasco da Gama vice president Felipe Carregal Sztajnbok said in March. “The (777) management has failed to follow the key guidelines of the SAF business law. They lack professionalism, transparency. They do not properly invest in infrastructure.”

AP Sports Writers Steve Douglas, Samuel Petrequin, Ciaran Fahey, Andrew Dampf and Mauricio Tavarese contributed.

AP soccer: https://apnews.com/hub/soccer

Genoa's Albert Gudmundsson celebrates after scoring his side's third goal during a Serie A soccer match between CFC Genoa 1893 and Cagliari Calcio in Genoa, Italy, Monday April 29, 2024. (Tano Pecoraro/LaPresse via AP)

Everton's Idrissa Gueye, left, celebrates after scoring the opening goal during the English Premier League soccer match between FC Everton and FC Brentford in Liverpool, England, Saturday, April 27, 2024. (Peter Byrne/PA via AP)

FILE - Kay Bernstein, President of Hertha BSC, Josh Wander, CEO of 777 Partners Group, and Thomas E. Herrich, Managing Director of Hertha BSC, from left, stand together at a press conference on the entry as new investor for Bundesliga soccer club Hertha BSC in Berlin, Germany, Monday, March 13, 2023. An Australian airline grounded. A lawsuit in a federal court in New York alleging $600 million fraud. A long-stalled bid to buy English Premier League soccer club Everton. These are troubled times for Miami-based investment group 777 Partners, one of the wave of United States owners in European soccer, bringing more anxiety for fans of its teams in several countries. On Tuesday, May 7, 2024, financial administrators of the collapsed 777-owned Australian airline Bonza confirmed all flights are canceled for one more week.(Andreas Gora/dpa via AP, File)

Everton's Dominic Calvert-Lewin celebrates after scoring his side's second goal during the English Premier League soccer match between Everton and Liverpool at the Goodison Park stadium in Liverpool, Britain, Wednesday, April 24, 2024. (AP Photo/Jon Super)

FILE - Josh Wander, CEO of the 777 Partners Group, speaks at a press conference on the entry as new investor for Bundesliga soccer club Hertha BSC in Berlin, Germany, Monday, March 13, 2023. An Australian airline grounded. A lawsuit in a federal court in New York alleging $600 million fraud. A long-stalled bid to buy English Premier League soccer club Everton. These are troubled times for Miami-based investment group 777 Partners, one of the wave of United States owners in European soccer, bringing more anxiety for fans of its teams in several countries. On Tuesday, May 7, 2024, financial administrators of the collapsed 777-owned Australian airline Bonza confirmed all flights are canceled for one more week. (Andreas Gora/dpa via AP, file)

ATLANTA (AP) — President Joe Biden is delivering the commencement address at Morehouse College on Sunday, a key opportunity for an election-year appearance before a Black audience but one that also could directly expose him to the anger that some of these and other students across the country have been expressing over his staunch support for Israel in its war against Hamas militants in Gaza.

The White House hinted that Biden would reference the concerns of students and faculty at the male-only, historically Black college over his approach to the war. Press secretary Karine Jean-Pierre said, “stay tuned,” when asked if the Democratic president would address the worries that sparked weeks of student protests on college campuses nationwide.

Nearly all the streets around the campus were shut down for the event. As the packed crowd gathered just before graduates began filing into the quad, Associate Provost Mel Foster warned: “Although we respect everyone’s right to free speech, Morehouse College has issued guidelines to ensure we are in line with the law."

The speech, and a separate one Biden is giving later Sunday in the Midwest, is part of a burst of outreach to Black constituents by the president, who has watched his support among these voters soften since their strong backing helped put him in the Oval Office in 2020.

After speaking at Morehouse in Atlanta, Biden will travel to Detroit to address an NAACP dinner.

Georgia and Michigan are among a handful of states that will help decide November's expected rematch between Biden and Republican former President Donald Trump. Biden narrowly won Georgia and Michigan in 2020 and needs to repeat — with a boost from strong Black voter turnout in both cities.

Jean-Pierre said Biden has been looking forward to the Morehouse speech, as he does all of his commencement addresses. He has been writing the remarks himself, along with senior advisers, she said.

“When it comes to this difficult moment in time that we're in as we speak about the protests, he understands that there's a lot of pain,” Jean-Pierre said. “He understands that people have a lot of opinions and he respects that folks have a lot of opinions.”

Biden spent part of Saturday warming up for the big speech. He was greeted at Atlanta's airport by a group of past Morehouse graduates and playfully draped an arm around the shoulder of one. He later stopped at Mary Mac's Tea Room, a Black-owned restaurant that opened nearly 80 years ago, to briefly address about 50 supporters. A 2024 Morehouse graduate introduced him.

The president joked about being surrounded by “Morehouse Men."

Biden spent the back end of the past week reaching out to Black constituents. He met with plaintiffs and relatives of those involved in Brown v. Board of Education, the landmark 1954 Supreme Court decision that outlawed racial segregation in public schools. He also met with members of the “Divine Nine” Black fraternities and sororities and spoke with members of the Little Rock Nine, who helped integrate a public school in Little Rock, Arkansas, in 1957.

Morehouse's announcement that Biden would be the commencement speaker drew some backlash among the school’s faculty and supporters who oppose Biden’s handling of the Israel-Hamas war. Some Morehouse alumni circulated an online letter condemning school administrators for inviting Biden and soliciting signatures to pressure Morehouse President David Thomas to rescind it.

The letter claimed that Biden’s approach to Israel amounted to support of genocide in Gaza and was out of step with the pacifism expressed by Martin Luther King Jr., Morehouse's most famous graduate.

The Hamas Oct. 7 attack on southern Israel killed 1,200 people. Israel's offensive has killed more than 35,000 Palestinians in Gaza, according to local health officials.

In an extended interview with The Associated Press, Thomas sought to play down the prospect of students protesting during the ceremony. He held up the all-male campus as a place that, like other historically Black colleges and universities, can balance social justice and political activism with a sense of order and decorum befitting commencement and a presidential address.

“I think you will find on a spectrum that we represent both ends – those who are vehemently opposed to the president coming to speak and those at the other end who think it’s a great thing ... and who don’t see a contradiction between their feelings about what’s going on in Gaza and the president coming,” he said.

But some students at Morehouse and the adjacent campuses that make up the Atlanta University Center (AUC) remain staunchly opposed to Biden’s appearance. They accuse Thomas and Morehouse trustees of prioritizing status and establishment political alliances over the values the school espouses.

AUC students, faculty and alumni held a rally and die-in against Biden on Friday.

“If our illustrious HBCUs and administrators really loved the activism they claimed to be for and use as a marketing tool then they would ... stand with us as we pray to God, ‘From the West End to the West Bank,’” said Morehouse junior Lonnie White of Atlanta, among the students who participated in two AUC demonstrations in recent weeks.

Student protest leaders said they know of no organized protest plans within the commencement site itself.

“I don’t even have a ticket,” said Morehouse sophomore Anwar Karim, who led a petition calling on Thomas to rescind Biden’s invitation.

Karim said he expected some students to attend nearby gatherings planned previously to commemorate the birthday of Malcolm X, a Black leader often credited with advancing the Black Power philosophy as a Civil Rights-era alternative to King’s practice of civil disobedience.

Thomas said in the interview that silent, non-disruptive protests would be tolerated, but repeated a pledge to halt the ceremony if disruptions mount.

Former U.S. Rep Cedric Richmond, a Morehouse alumnus and Biden campaign co-chairman who helped broker the president’s appearance, called the graduation a “solemn event” and said the gravity of the moment should give potential protesters pause.

"I would hope that people will not interrupt a once-in-a-lifetime moment like that for those students and those parents and grandparents who are there to see these young men walk across that stage,” Richmond said.

In Detroit, Biden was set to visit a Black-owned small business before delivering the keynote address at the NAACP’s Freedom Fund dinner, which traditionally draws thousands of attendees. The speech gives Biden a chance to reach thousands of people in Wayne County, an area that has historically voted overwhelmingly Democratic but has shown signs of resistance to his reelection bid.

Wayne County also holds one of the largest Arab American populations in the nation, predominantly in the city of Dearborn. Leaders there were at the forefront of an “uncommitted” effort that received over 100,000 votes in the state’s Democratic primary and spread across the country.

A protest rally and march against Biden’s visit are planned for Sunday afternoon in Dearborn. Another protest rally is expected later that evening outside Huntington Place, the dinner venue.

Associated Press writer Joey Cappelletti in Lansing, Michigan, contributed to this report.

FILE - President Joe Biden speaks on the grounds of Morehouse College and Clark Atlanta University, Jan. 11, 2022, in Atlanta. Biden will deliver the commencement address at Morehouse University Sunday, May 19, 2024, giving the Democrat a key spotlight on one of the nation's preeminent historically Black campuses but potentially exposing him to uncomfortable protests as he seeks reelection against Donald Trump. (AP Photo/Patrick Semansky, File)

President Joe Biden, right, greets a young girl as he speaks with supporters at Mary Mac's Tea Room, Saturday, May 18, 2024, in Atlanta. (AP Photo/Alex Brandon)

President Joe Biden speaks with supporters at Mary Mac's Tea Room, Saturday, May 18, 2024, in Atlanta. (AP Photo/Alex Brandon)

President Joe Biden, right, greets Stacey Abrams at Mary Mac's Tea Room, Saturday, May 18, 2024, in Atlanta. (AP Photo/Alex Brandon)

President Joe Biden speaks with supporters at Mary Mac's Tea Room, Saturday, May 18, 2024, in Atlanta. (AP Photo/Alex Brandon)

President Joe Biden, third from right, poses with alumni of Morehouse College including Montgomery, Ala. Mayor Steven Reed, from left, Birmingham, Ala. Mayor Randall Woodfin, Sen. Raphael Warnock, D-Ga., Marlon Kimpson, a member of the advisory committee for trade policy and negotiations in the office of the U.S. Trade Representative, Rep. Sanford Bishop, D-Ga., and John Eaves, former chairman of the Fulton County Board of Commissioners, upon arriving at Hartsfield-Jackson Atlanta International Airport, Saturday, May 18, 2024, in Atlanta. (AP Photo/Alex Brandon)

President Joe Biden, second from right, is greeted by alumni of Morehouse College including Sen. Raphael Warnock, D-Ga., from left, Marlon Kimpson, a member of the advisory committee for trade policy and negotiations in the office of the U.S. Trade Representative, and Rep. Sanford Bishop, D-Ga., upon arriving at Hartsfield-Jackson Atlanta International Airport, Saturday, May 18, 2024, in Atlanta. (AP Photo/Alex Brandon)

President Joe Biden, second from right, is greeted by alumni of Morehouse College including Sen. Raphael Warnock, D-Ga., from left, Marlon Kimpson, a member of the advisory committee for trade policy and negotiations in the office of the U.S. Trade Representative, and Rep. Sanford Bishop, D-Ga., upon arriving at Hartsfield-Jackson Atlanta International Airport, Saturday, May 18, 2024, in Atlanta. (AP Photo/Alex Brandon)