United launch action against Lazio over debt

Manchester United have initiated legal proceedings against Lazio to recover £12m owed from the transfer of Jaap Stam after trading in the troubled Serie A club's shares was suspended yesterday.

"Manchester United has received no further payments from Lazio in respect of the £12m owed for the transfer to SS Lazio of the registration of Jaap Stam," a club statement read. "Discussions have been ongoing to reach agreement for a rescheduling of the payment of this debt, and compensation for the delay, but these have still not reached a conclusion."

The move came as Cirio, the Italian food company which has a controlling stake in Lazio, was yesterday declared insolvent after failing to reimburse investors on a €150m (£100m), two-year bond which matured last week.

Trading in Cirio shares was suspended for the third day running on the Milan stock exchange, dragging Lazio shares down 7.9 per cent in the process. The shares, which fell 6.4 per cent on Thursday, were then also suspended.

Both companies are owned by the Cragnotti family. Sergio Cragnotti is the owner and president of Lazio. Massimo Cragnotti, his son, is the general manager.

The Roman club have defaulted on transfer payments to both Valencia and Manchester United, whom they owe £12m from their purchase of the Dutch international Stam at the start of last season. Valencia have already instigated legal proceedings to recover £7.5m owed to them for the transfer of the Spanish midfielder Gaizka Mendieta, currently on loan to Barcelona.

The Biancoceleste recently reached new agreements with both clubs after failing to meet the original payment schedules. But they have now defaulted on those plans too.

Sergio Cragnotti was due to meet Lazio shareholders yesterday to explain why the payments had not been met and to promise a €55m investment. However, Valencia are not sympathetic to their plight.

"The situation with Lazio is the same as it was yesterday and the day before," said the Valencia president, Jaime Orti. "Lazio are in debt with Valencia. We do not need to reach an agreement over the payments for Mendieta because that is not the problem, but them actually paying. We have taken the legal path and we are waiting to see what happens because these things take time."