By Elvira Pollina and Emilio Parodi
MILAN (Reuters) - U.S. fund Elliott has launched legal proceedings in Luxembourg against a minority investor in AC Milan which has been challenging in courts the 1.2 billion euro ($1.3 billion) sale of the Italian soccer club, according to documents and people familiar with the case.
Bringing a writ of private criminal prosecution, called "citation directe" in Luxembourg, Elliott accuses Blue Skye Financial Partners and its representatives of offences including blackmail, extortion and fraudulent misrepresentation to support its legal actions against the sale.
According to Luxembourg law, a person who believes they have sufficient evidence can sue someone directly before a criminal court, without the public prosecutor's office opening an investigation. It is then up to a judge to decide directly on the merits of the case.
In the documents seen by Reuters, Elliott alleges Blue Skye made threats in order to obtain undue financial concessions and filed untruthful documents in its claims to mislead judges to get decisions in their favour
Blue Skye representatives have been called to appear before the Luxembourg Court on Nov. 24, according to the writ of summons.
In a statement to Reuters, Blue Skye billed Elliott's claim as "a groundless unilateral action" and an "an attempt to circumvent" the pending legal proceedings set up by Blue Skye.
Elliott last year sold the seven-time European Cup winners AC Milan to U.S. investment firm RedBird Capital Partners.
But minority investor Blue Skye, holding an indirect stake of 4% in AC Milan, initiated court action to block the sale or obtain damages in United States, Italy and Luxembourg, where the vehicles owning the club was based.
Blue Skye accused Elliott of violating its rights by engaging in several months of "behind closed doors" talks to sell to RedBird, a group founded by former Goldman Sachs (NYSE:GS) banker Gerry Cardinale which has investments in other sports teams.
Elliott, which took over the Italian club in 2018, has called Blue Skye's legal actions as "frivolous and vexatious", meaning it believes they have no reasonable basis in fact or law. ($1 = 0.9339 euros)