John Textor faces new scandal amid Derby County and Sheffield Wednesday takeover links | OneFootball

Brazilian club Botafogo has initiated legal action against the former Crystal Palace part-owner

Fresh legal troubles coming out of Brazilian club Botafogo could complicate John Textor's efforts to secure a takeover at either Derby County or Sheffield Wednesday.

This comes after reports that Textor is apparently preparing to make a formal bid for the Rams, having been closely monitoring the situation at both Pride Park and Wednesday - of which there is less competition at the former.

The American entrepreneur previously held a 43% stake in Premier League side Crystal Palace, which he sold for around £190m in June this year to Woody Johnson, and he has been looking for an English club to invest in ever since.

That search had seemingly narrowed down to two clubs recently, but events going on in South America at one of his other clubs could potentially stop Textor in his tracks.

The Botafogo lawsuit that threatens John Textor's attempts to takeover Derby County or Sheffield Wednesday

As reported by Brazilian publication O Globo and relayed by French outlet L'Équipe, Botafogo has initiated legal action against Eagle Football Holdings (EFH) - demanding immediate payment of €25m from Textor's holding company.

This new development represents a continuation of an ongoing financial dispute between the South American champions and their owner's multi-club network.

Brazilian courts have previously ordered the freezing of Eagle Football's assets in the country and demanded payment of €23m euros.

The lawsuit, as per L’Equipe, highlights the big structural problems within Textor's multi-club ownership model, which has increasingly come under strain as his various football ventures face mounting debts.

The club also reportedly are asking Brazilian courts to "prohibit the distribution of dividends to Eagle" and accuse Textor of "reckless and irresponsible management."

According to their official website, EFH currently has stakes in Botafogo, French side Lyon, Belgian outfit RWDM Brussels and an acadamy in Florida.

The situation at Botafogo seems particularly worrying - with the club having reportedly loaned substantial funds to support operations at Lyon, funds that have never been repaid as promised.

As previously mentioned, Textor sold his stake in Palace, but this was something he was forced to do because UEFA regulations prevented Lyon and the South London club from competing in the same European competition.

Yet even with the proceeds from that sale, L’Equipe notes that Textor's overall financial position isn’t great at all - with EFH described as facing severe financial distress.

John Textor's Derby County bid hinges on available cash after Sheffield Wednesday discussions

Despite these complications, journalist Alan Nixon reported that Textor is preparing to move swiftly on a formal bid for Derby County, who he says are valued at £60m.

The journalist later mentioned in that same report that Textor may have even been in attendance at Derby's last home game against Watford.

However, on X, Nixon then reported that Textor needs to come up with substantial proof of funds before making any formal offer to current chairman and owner of Derby, David Clowes.

So, it seems the timing of this lawsuit in Brazil could hardly be worse - and it just raises further questions regarding EFH that would obviously worry Derby fans.

Textor also held preliminary discussions with Sheffield Wednesday in October regarding a potential takeover at Hillsborough - although it remains to be seen if he is one of the interested parties that have submitted an offer,

Sky Sports News' Rob Dorsett reported that three "credible" offers have been placed, and two more are expected in the "coming days."