What is the £41m issue that could affect Sheffield Wednesday takeover? | OneFootball

David Storch's bid to buy Sheffield Wednesday has been agreed with administrators Begbies Traynor

Sheffield Wednesday moved a step closer to exiting administration earlier this week when a new preferred bidder was named to take over the club.

David Storch was involved in the negotiating process when James Bord’s offer for the Owls was accepted in December.

But the former poker player’s consortium pulled out of the takeover agreement in February, which reopened the bidding process.

The American is leading a group alongside Tom Costin to purchase the Yorkshire outfit, who have been in administration since October.

Henrik Pedersen’s side have already been officially relegated from the Championship in what has been a tumultuous last 12 months for the club.

Supporters will be hoping that the takeover will be finalised quickly, with ratification needed from the EFL, however there is one stumbling block that could slow everything down.

The £41m stumbling block in the Sheffield Wednesday takeover

The ratification process was taking quite some time with Bord’s bid to buy Sheffield Wednesday, and it is hoped that it won’t take as long with the Storch bid.

However, according to The Athletic, an issue could arise due to a $55 (£41) million settlement made during David Storch’s time as chief executive, and then chairman of the board of directors, at AAR Corp.

The aircraft maintenance firm paid £41 million to settle investigations from the Department of Justice and the Securities Exchange Commission.

It was alleged that AAR Corp violated the Foreign Corrupt Practises Act during Bord’s time leading the company. The settlement arose after an executive of an AAR subsidiary admitted to the bribery of a government official in Nepal. An agent who worked for AAR also pleaded guilty to bribing an official of the South Africa government, with the offences taking place from 2015 to 2020.

Storch was CEO of AAR Corp until 2018, when he then transitioned into his role as chairman of the board of directors. It’s believed that this could raise some questions that will need to be answered as part of the ratification process.

David Storch’s response to possible £41m takeover issue

A lawyer representing Storch has issued a response to the possible issue the £41 million settlement poses to the Sheffield Wednesday takeover.

The 73-year-old will need to pass the Owners' and Directors’ Test (OADT) as part of the EFL’s process, otherwise his takeover will be in jeopardy.

Keir Gordon claimed that the bidders are confident that there is no problem, and that it can be quickly resolved with the EFL as part of their background checks.

He believes that the company satisfied the US government with the settlement, and that the issue only arose due to a couple of bad actor agents, with the company self-reporting the activity once they noticed it.

“Mr. Storch was chairman of AAR Corp when the company self-reported a potential wrongdoing by a rogue employee in 2019,” said Gordon, via The Athletic.

“The company cooperated with authorities and successfully resolved the matter in 2024.

“The U.S. government was satisfied with the outcome and determined not to prosecute AAR Corp.

“We are satisfied that this is not an issue in relation to the EFL’s OADT process but ultimately, as you are aware, it is for the EFL to determine this.”

Time is of the essence for Sheffield Wednesday, who are at risk of running out of money in the coming months without the completion of a takeover.