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Dai Yongge, owner of Reading Football Club, is facing a £12 million ($15 million) lawsuit from U.S.-based Redwood Holdings 1 Ltd., after a failed takeover bid for the League One football team. The legal dispute stems from Dai’s refusal to sell the club, citing concerns over shifting terms proposed by the buyer, Louisiana lawyer Robert Couhig Jr., and alleged breaches of exclusivity agreements during the process.

Failed Takeover and Rising Tensions

Couhig, through Redwood Holdings, had sought to acquire Reading FC for £24 million in 2024, lending £4.6 million to keep the club operational during negotiations. Talks collapsed in September, with Dai asserting that Couhig’s continual changes to the terms undermined trust.

According to a defense filing from Dai’s holding company, Renhe Sports Management Co. Ltd., Couhig "was not acting honorably," seeking repeated price reductions and failing to ensure the club’s stability. This led Dai to terminate the negotiations, sparking legal action.

Legal Claims

Redwood alleges that Renhe breached exclusivity provisions by seeking other buyers for its shares in Reading FC. The company claims this breach cost it an opportunity to purchase the club, with estimated losses of £12 million, plus £300,000 in legal and wasted costs.

Dai counters that Couhig’s refusal to release assets used as security for loans is a coercive attempt to force through the sale. Renhe’s defense asserts that the litigation is being pursued as a pressure tactic, without a substantive basis for the claim.

Financial Disputes and On-Pitch Uncertainty

Renhe has also requested the release of assets tied to nine loans, arguing that they have been repaid. The defense highlights the financial unpredictability tied to Reading FC’s League One status, noting that relegation or promotion could significantly impact the club’s valuation and financial prospects.

The holding company challenges Redwood’s claim of a 200% return on investment, stating it lacks detail on how such profits would materialize or when they could be achieved.

Legal Representation

Redwood Holdings 1 Ltd. is represented by Jonathan Miller of 1EC, instructed by Kitson Boyce LLP.

Renhe Sports Management is represented by Martin Budworth of Kings Chambers, instructed by Knights PLC.