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RCDLC.COM EXPLAINS LAFITA’S CASE

12 Jun 2011
Complex and confusing, the case of Lafita has been popping out within the last two years and now a new chapter begins, because Depor has won a battle in court and demands the relegation of Zaragoza. RCDLC.com explains the case.

Surely it will be one of the most polemic cases in the history of Spanish football, and perhaps it will be a reference that will be studied in future years. The case of Ángel Lafita has been controversial, polemic, but mainly confusing; that’s why RCDLC.com is trying to clarify the issue.

First to all it is necessary to recall the facts. Lafita joined Deportivo in June of 2007 as part of a loan deal with Real Zaragoza; the contract included a buyout option in favour of the Galician club for €2 million that should have been executed before June 30, 2008. The first thing to explain here is that by ‘executing a buyout clause’ it means to inform the other club through a legal fax about the intention to execute the buyout option over a player under contract, and it not necessarily means to make the payment, because the deadline to make the payment is the closing of the transfer market (normally August 30), and this payment is considered done when the club that executes the option makes a deposit in the bank account of la liga (LFP), instance that’s always responsible of validating the operations.

Then the Aragonian winger played the season 2007/08 at Depor and on June 26, 2008 the club executed the buyout option and signed a three-year contract with the player. Despite not been forced to make the payment that day, the Galician club deposited the money in the bank account of la liga on the day in which the fax was sent to Zaragoza. And later Lafita completed a second season at Deportivo (2008/09).

But the contract signed with Zaragoza included two re-buy options for Los Maños; the first option was for €3 million plus taxes and was expiring on June 30, 2009, while the second was for €3.48 million plus taxes and was expiring on June 30, 2010. The deal also contemplated that €2 million of the amount should be paid in cash and the rest one year later after executing the re-buy clause. And here is where the conflict begun. Zaragoza was willing to count with Lafita for their returning season to Primera (2009/10) and it was pretty clear that they were going to execute the first re-buy option, which was expiring on June 30, 2009.

Zaragoza understood that this was a normal buyout option clause and that they were only forced to execute it before the deadline, which meant to send the official fax to Deportivo informing about their intentions before June 30, 2009; and Los Maños sent the fax on June 29, but it deposited the money that correspond to the first payment (€2 million) in the LFP bank account until August 30, 2009 at 23h30 CET, just thirty minutes before the summer transfer market was closing its doors.

Now, Deportivo was arguing that Zaragoza should have executed the clause plus making the first payment stipulated in the contract on the same day: June 30, 2009.And for that reason the Galician club presented a demand in the courthouse of La Coruña; what Depor wanted is the acceptance of the fact that Zaragoza didn’t fulfill the requirements stipulated for the first re-buy option as they made the payment after the deadline, so the target of Lendoiro was to see Zaragoza accepting to pay the amount stipulated in the second re-buy option, in other words to gain a half a million Euros as the second option was for  €3.48 million plus taxes.

And this was the verdict that was made public by Depor on Friday; the judge that managed the case gave the reason to Deportivo. The explanation for the judge’s ruling relies on the legislation in Spain. The judge interpreted that this was a re-buy option clause and not a normal buyout option, and the laws in Spain refers to this figure as Retracto Convencional or “Conventional withdrawal” in English.

A Conventional withdrawal allows a seller to regain an asset that was previously sell to a buyer, and the difference with a normal buyout option is that the seller, in the attempt to regain the asset, must make the payment in the same moment that it informs the buyer about its intentions. So, the judge interprets that since Real Zaragoza made the payment until August 30, 2009, then the second re-buy option applies and therefore the Aragonians must pay €1.48 million plus taxes to complete the operation. It is a small victory for Depor that means half a million Euros (plus taxes).

But Deportivo fears that they won’t see a cent of this amount, because precisely on this week Real Zaragoza informed that it is applying to the Spanish bankruptcy law, this since the Aragonians are overwhelmed by a global debt of €110 million, amount that they can’t pay.  The bankruptcy law, or ley concursal in Spanish, forces any company to pay the 100% of its tax liabilities and the wages of the employees, but big part of the rest of the debt is normally lost as it depends on a creditors contest, a meeting in which the suppliers renounce to the major part of their money in the attempt to, at least, regain a small fraction of the money.

This is where the second part of the story begins, because Lendoiro is upset as he sees that his Deportivo is at Segunda División living all kind of financial problems, while clubs like Zaragoza are at Primera owing money to everyone. That’s why the club announced on Friday that it is presenting a new demand, this time at the LFP, asking for the relegation of Zaragoza to Segunda División, because the Aragonian club still hasn’t paid the second part of Lafita’s transfer despite the payment should have be made on August 30, 2010.

It is a similar thing to what Getafe tried to do with Zaragoza at the end of the liga season as Los Maños are owing money to the Madrilenian club for the transfer of striker Uche. This new demand will be rejected as it happened with the demand of Getafe, this is a fact as the LFP doesn’t want more polemic on this issue, but the demand of Depor’s president should be understand as a declaration of Lendoiro’s anger toward the fact that some clubs are using the bankruptcy law as an excuse to avoid their financial obligations.

Actually, on Saturday Depor Sport was listing the clubs that passed through the bankruptcy law and that still owing money to Deportivo for the transfer of players., In this list there are the names of RCD Mallorca (Dudu Aouate), Las Palmas UD (Gabriel Schürrer), Real Zaragoza (Ángel Lafita) and Real Betis (Rubén Castro). The name of Racing Santander is included in the list, the Cantabrians haven’t informed yet if they will use the bankruptcy law in order to avoid  their obligations, but Depor Sport remembers that they still haven’t pay the part that corresponds to Depor for the transfer of youngster Sergio Canales to Real Madrid.

And on Saturday, Lendoiro himself explained his thoughts as he attended to the act where the new major of La Coruña was taking charge of the job, ”Zaragoza has been laughing at us. They were just waiting for the final decision and even said that they have won the case. Now we are presenting our demand on Monday and then it will be a matter of the LFP. Betis and Zaragoza will probably avoid paying the wages of their players and nothing will happen. That’s a fraud and a misleading use of the bankruptcy law. We are facing the cases of Betis, Las Palmas, Zaragoza and Racing. In resume they owe us €7 or €8 million. With that money they were able to make reinforcements and ended making weird stuff at the closing moments of the season, so they can remain at Primera.”

”And beyond the lack of payment, what they are doing is laughing at the clubs. They are just finishing all the rational things in football. This is a step forward so the other clubs can see that they can’t play with Deportivo; we are defending our interests. There’s always a wise man trying to use the bankruptcy law in order to avoid the payments, and then they just leave everybody else facing a dangerous financial situation. It is time to seek for solutions at the LFP, but also at the courthouse and at the Spanish Sports Council. You can’t play with the bankruptcy law, because it’s dragging Spanish football to a dead end road. It can’t be that for your lack of payment the other clubs are the ones facing relegation problems. The UEFA and the FIFA includes rules that rest points to the teams if they don’t pay their debts.” Depor’s boss complained.

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