Orlando City hits Sao Paulo with legal action over unpaid loan fees for Kaka
Orlando City is taking legal action against Brazilian outfit Sao Paulo over unpaid fees due on midfielder Kaka, filing a lawsuit with a court in Brazil for around $4.35 million.
Rather than hitting up the courts, Orlando had other ideas, offering an out in the form of Sao Paulo midfielder Paulo Henrique Ganso. Globo's Marcelo Prado reported that Orlando City would forgive the debt and forgo the suit if Sao Paulo agreed to sell Ganso, with Orlando providing an additional $1.88 million to complete the deal.
Orlando gave Sao Paulo a Thursday deadline, but Sao Paulo reportedly turned down the offer Wednesday morning, and it looks increasingly likely that the two sides will continue legal proceedings instead.
Report out of Brazil today is that São Paulo has rejected Orlando City's offer for Ganso: http://t.co/05QtPDhp2r
— Paul Tenorio (@PaulTenorio) July 22, 2015
"We do have issues with clubs (in) regards (to) financial(s) in the last deal we have," Orlando City owner Flavio Augusto da Silva told reporters Saturday, according to Paul Tenorio of the Orlando Sentinel. "Of course if we had a deal (for Ganso) it would be an opportunity to solve everything, (but) we don't have right now anything done. So it's better for me to talk about this with details when we have it done."
Tenorio breaks down the suit, which alleges that Sao Paulo failed to meet some of Orlando's terms for Kaka's loan move. Orlando City says Sao Paulo had to pay $1.3 million for Kaka's salary and the teams would play in two friendlies, with Orlando City taking 80 percent of the profits from the gate.
Orlando was also supposed to receive the gate profits from Kaka's first game for Sao Paulo in August 2014, as well as 20 percent of any increase in Sao Paulo's revenue during Kaka's time on loan with his hometown club.
From the Orlando Sentinel:
According to the suit, Sao Paulo was also supposed to provide Orlando City with the average income at the stadium in four previous games by June 26. Sao Paulo did not provide those numbers until February 13, and Orlando City claimed the document was just an email spreadsheet and thus not valid, and charged a late fee of $10,000 Brazilian real per day up until July 20. That fee added up to approximately $3.8 million.
Orlando City also tacked on a 10 percent late fee and one-percent interest per month on the percentage of revenue Sao Paulo was supposed to pay Orlando City - approximately $547,095.
Sao Paulo acknowledges the fees owed, but not the fines, bringing the sum to $1.8 million instead of over $4 million.