Source: Bournemouth_Echo
Cherries: Mostyn and Piper set for court battle
CHERRIES vice-chairman Jeff Mostyn will today swap the boardroom for the courtroom when he goes head-to-head with John Piper, the clubs former company secretary.[LNB] Bournemouth-based businessman Piper has brought a civil action against Mostyn, with the case due to be heard by the County Court in Southampton over the next two days.[LNB] The dispute centres on a £30,000 loan made by Piper just days before the directors of AFC Bournemouth were forced to call in the administrators in February 2008.[LNB] At the time, Mostyn held the post of chairman having gained a controlling interest in the club, together with associate and co-owner Steve Sly, in March 2007.[LNB] Piper, who had been a major shareholder in the old club, publicly supported their takeover and agreed to become an investor under their stewardship.[LNB] A long-time benefactor, Piper regularly donated generously to the club, providing much-needed sponsorship particularly to the youth department through his company Dean Park Properties.[LNB] In January 2008, Piper agreed to make a loan of £30,000 to help fund the club after it had lodged notice of intention to appoint an administrator.[LNB] His advance came after Mostyn had told a board meeting that he would not be prepared to continue to finance the club on his own.[LNB] Together with Pipers £30,000, further loans were made by director Sly and then-company secretary Peter Schofield, while Mostyn also topped up his loan.[LNB] All monies were secured by a debenture and were due to be repaid once the club had come out of administration and sold to a new owner.[LNB] The debenture, lodged with Companies House, was in Mostyns name.[LNB] Just a week after the loans had been made, Cherries were placed into the hands of administrators Begbies Traynor, with Gerald Krasner taking charge of club affairs.[LNB] Mostyn continued to fund the club through administration and is understood to have put up around £380,000 to help keep it afloat until a buyer was eventually found in the summer of 2007.[LNB] However, due to issues surrounding the purchase by Sport-6, there were insufficient funds from the sale proceeds to meet repayment of the debenture.[LNB] Mostyn had struck a deal with new owner Paul Baker to sell the club for around £850,000, payable in 24 instalments of £36,000. And although Bakers company UK Sameday was to act as a guarantor, it fell into administration after only two payments had been made.[LNB] As a result, Piper is pursuing Mostyn personally for the £30,000, while Mostyns defence will claim the loan was made to the club and so he is not personally liable. Attempts by the two parties to settle out of court have been unsuccessful.[LNB] The case is not connected to another action involving the club, which has seen Piper attach to an ongoing winding-up petition, served by HMRC. Piper claims he is owed for a separate loan made to the club earlier this year.[LNB]
