Northampton Borough Council’s legal battle against former owners of the Cobblers has ‘no direct impact’ on the authority’s day-to-day budgets.
That’s the message from cabinet member for finance Councillor Brandon Eldred, who has also admitted that there is still plenty of work to do in recovering funds due to it following the council’s successful civil case against Anthony and David Cardoza.
Yesterday, Judge Simon Barker QC found that former chairman David, and his father Anthony, had ‘failed in their fiduciary duties’ as directors of the football club when the borough council loaned the club £10.25million to redevelop Sixfields with a new East Stand.
The money was allegedly ‘misappropriated’ after being passed onto developers 1st Land Limited, but the council successfully argued that some of the payments that ended up back with Anthony Cardoza were ‘circular’.
Anthony was ordered to pay back £2.1million to the council, while David must pay back funds that were used to redevelop his Cheriton home in Church Brampton.
The borough council had spent more than £750,000 on legal costs in pursuing the case, which concluded at Birmingham Civil Justice Centre yesterday.
But all funds associated with the case have come from reserves, Councillor Eldred told the Local Democracy Reporting Service, and it is there where the money would end up back.
He said: "This has no direct impact on our day-to-day budgets in the current financial year or 2019-20. The legal costs have been funded from reserves and any monies recovered will eventually go back to the reserves.
“There was no risk of us failing funding day-to-day services, nor would this be any form of windfall, we are simply recovering a debt due on our balance sheet."
A criminal case investigating the use of the loan money is ongoing, with case files on more than 30 people thought to have been prepared by Northamptonshire Police.
Yesterday provided some relief to the borough council, which has faced heavy criticism over the way it handled the loan. Council leader Jonathan Nunn yesterday admitted that the borough council 'didn’t do a good job of protecting the public money'.
But despite its court victory it still faces the real possibility of not receiving all the money due back to it.
Yesterday, the High Court heard how the Cardozas will ‘almost inevitably’ have to file for bankruptcy if a potential appeal either doesn’t come to fruition or upholds the judge’s verdict.
Councillor Eldred said: “While we welcome the result, there is still a long way to go in recovering the money.”