Venables buys right to sue Spurs for unfair dismissal

TERRY VENABLES, coach of the England soccer team, has moved a stage further in his attempt to sue Tottenham Hotspur, the publicly quoted football club - to cries of foul by its chairman Alan Sugar.

Mr Venables, ousted as chief executive of Tottenham last year, has done a deal with the liquidator of his former company, Edennote, which will enable him to proceed with his pounds 1m-plus claim against Tottenham for wrongful dismissal.

In May, Tottenham, which claims to be a creditor of Edennote, succeeded in getting it wound up in a High Court action. The only two outstanding creditors areTottenham and Mr Venables.

Tottenham's claim against Edennote stems from the High Court action last summer between the two companies.

The winding-up move threatened to disrupt Mr Venables' claim, because once a company is wound up it is up to the liquidator to decide whether to pursue litigation. Although Mr Venables has a claim against Tottenham on his own behalf, Edennote, which provided Tottenham with management services, also has a claim.

In a so-far unpublicised deal, Mr Venables has bought the rights to Edennote's claim for breach of contract. He is believed to have paid less than pounds 10,000 for the assignment to the liquidators of Edennote, Rothman Plantell. In addition to the cash payment, the liquidator will get 10 per cent of any proceeds from the claim.

The move has outraged Mr Sugar and his solicitors at Herbert Smith who have complained to the liquidator.

Herbert Smith is threatening to go to court to reverse the decision. Mr Sugar's lawyers have told the liquidator it would have paid more for the assignment and should have been given the chance to buy it.

The liquidator said that it had offered Mr Venables the right to buy the claim only after Mr Sugar's lawyers applied to the court for 'security for costs' against Edennote. This would force Edennote to assure the court that it could meet Tottenham's legal costs in the event of a court award to that effect. 'We would not have had to have reached any deal with Mr Venables if Herbert Smith had not taken this action,' said the spokesman.

The dispute with Mr Venables threatens to drain Tottenham of further funds. The club has already been hit by a pounds 1.5m fine from the Football Association as a result of irregular payments to players by the previous management in the 1980s. In addition, Mr Sugar has made a settlement with the Inland Revenue, believed to be about pounds 700,000, in relation to those payments and the club is believed to have written off around pounds 500,000 in loans.

Tottenham's shares, which closed at 107p on Friday, have recently been rising on expectations of higher ticket and merchandise sales and success on the field after the summer signings of German striker Jurgen Klinsmann and Ilie Dmitrescu of Romania.

However, there are some concerns about the health of the balance sheet, the state of which will become evident in the next few weeks when the company announces its year- end results and publishes its annual report and accounts.

(Photograph omitted)