The former directors of Northampton Town Football Club have been ordered to compensate the borough council for misusing millions of pounds worth of loan money intended to develop Sixfields stadium.
In the last few minutes, Judge Simon Barker QC has handed down his judgement in the lengthy High Court battle between Northampton Borough Council and David and Anthony Cardoza.
Though the full details of his 68-page judgement will be released later today, he read out the conclusion in front of a packed courtroom in Birmingham shortly before 11am this morning.
The judge said: “Both Mr Anthony Cardoza and Mr David Cardoza acted in breach of their fiduciary duties as directors of NTFC.
“Secondly, Mr Anthony Cardoza is liable to pay Northampton Borough Council the sum of £2.97 million subject to the reduction of what has already been paid.
“Thirdly Mr David Cardoza is liable to compensate Northampton Borough Council to the cost... of works carried out to Cheriton, his former home, effectively funded by Northampton Town Football Club.
“Further submissions should be made as to the sum of his liability. “
Neither Anthony or David Cardoza will be able to receive relief under section 1157 of the Companies Act, which protects directors who have acted ‘honestly and reasonably’.
The transfer of David Cardoza’s home into his wife’s name in July 2015, the judge ruled, was a deliberate move to move the property out of reach of creditors.
During the trial in Birmingham in July last year, the council said the former chairman was disposing of his only significant asset available in the event claims were successfully brought against him.
Northampton Borough Council loaned the football club £10.25m to renovate Sixfeids Stadium between 2013 and 2014, though the works were never completed and the football club defaulted on the loan repayments.
The borough council’s case centred around what it called ‘circular’ payments to David and Anthony Cardoza that should have been used on the stadium revamp.
The judge said that, subject to "reductions", Anthony Cardoza would have to pay the council back £2.1m.
It is not yet known whether the borough will be able to reclaim its legal costs.
Updates to follow.