Swansea City are bidding to work in tandem with the club's Supporters' Trust in the future after an agreement was reached to ensure no legal action will take place over the sale of the Swans in 2016.
The Trust - who have a 21.1% stake in the club - voted in favour of taking the Swans' former shareholders to court after stating it was excluded from negotiations over the sale of club during its seven-year stay in the top-flight.
It is now hoped that all parties can be on a "unified path" going forwards.
However, plenty of questions needed to be answered following the club's official announcement on Tuesday afternoon.
How was the agreement reached?
Having previously expected legal action to take place, the Trust was approached by Jake Silverstein and later met with the American - along with other board officers - in August.
Following those crunch talks, discussions between the Trust and representatives of the club's former shareholders then took place as the possibility of a settlement appeared on the horizon for the first time.
A letter sent by the Supporters' Trust to its members on Tuesday stated proposals that were "fundamentally consistent with the aims of the Trust" were then received following the series of talks.
An enhanced offer was then received and, after being intensely scrutinised, unanimously accepted by the Trust board.
READ MORE: Swansea City Supporters' Trust withdraw legal action as agreement reached over 2016 sale of club
Why were Trust members not informed of the agreement/allowed to vote on whether or not to accept?
The Trust stated it had hoped to consult its members on whether or not to accept the settlement and the issues that were evident if legal action was pursued.
However, they opted against both offering members the chance to vote and holding talks over their final decision.
Their key concern regarded the possibility of jeopardising confidential details of their final settlement, along with those regarding funding and insurance.
The Trust noted its fears over losing funders and insurers that would have led to the Trust being reliant on its own resources to fund legal proceedings
Nevertheless, members are understandably frustrated given that they were not consulted on the matter before a decision was reached.
What next for the Trust?
The Trust's stake in the club currently stands at 21.1%.
However, director Silverstein loaned the club a significant fee in 2020 - a sum that was matched by the Swans' majority shareholders Jason Levien and Steve Kaplan.
With further investment from the Trust unlikely, it means their shareholding is expected to be diluted to approximately 15% once loans previously made to the club are converted into equity, although that is not guaranteed.
Indeed, their stake could be further reduced in the future, although five per cent of their shareholding will be permanently protected against further dilution.
As part of the new agreement - which guarantees a supporter director from the Trust a place on the club's board - further stipulations have been put in place in a bid to safeguard the Trust.
The key headline is that the Trust is set to receive a settlement payment of £500,000 while they could receive further sums in the future while the following agreements are also in place:
- The Trust will receive a payment of £500,00 should Swansea be promoted to the Premier League.
- The Trust will receive a further payment of £500,000 for each season thereafter that the club is in the Premier League until an additional total of £1.5 million has been paid.
- If Swansea gain promotion to the Premier League and the current majority owners sell their controlling interest in the club at any time during the club’s first season in the top-flight, the Trust will receive a payment of £500,000 in addition to a fee of £750,000 at the time of sale.
What have the Trust already said?
A statement to its members read: "Considering all the factors involved, the Trust board firmly believes the decision that has been made to settle the dispute arising from the 2016 sale of the club is in the best interests of the Trust and its members.
"It also means that the club and the Trust can move forward in a constructive and collaborative partnership, which would not have been achievable had we become opposing parties in High Court litigation.
"The settlement agreement allows the Trust to proceed with its core aims and ambitions, as well as to ensure that the Trust is properly protected in the years ahead."
Questions still remain
The Trust board had their first opportunity to address its members directly in an Annual General Meeting held on Tuesday (February 15) night.
They will also allow members to ask the Trust board and its legal team questions on the latest developments via a virtual meeting on Thursday night.
But some key points are still to be addressed. Further clarity will be pursued on Thursday night.
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