Leicestershire have been forced to retract claims that their former chairman Neil Davidson agreed to pay the first six months of captain Matthew Hoggard’s contract.
The claims were made in notes at the end of the annual report which was sent out to Leicestershire members in January.
But Leicestershire members have now received a letter from the club saying that the claims that Davidson had agreed to pay £71,500 as a contribution towards the salary and image rights of Hoggard have been withdrawn as part of an out-of-court settlement reached with their former chairman.
Davidson, who resigned as Leicestershire chairman last October, had launched legal action to recoup a £109,000 loan he had made to the club to help them pay a VAT bill while he was in office.
Leicestershire counter-claimed that Davidson owed them money towards Hoggard’s salary but were unable to substantiate those claims with hard evidence at a recent mediation hearing in Leicester.
The out-of-court settlement with Davidson follows a similar agreement with former chief executive David Smith who resigned last June.
Smith had pursued a claim for constructive dismissal which was due to be heard at an employment tribunal in Leicester last week but which was cancelled after settlement by arbitration.
In resolving the two cases out of court Leicestershire have avoided more damaging publicity at the start of the new domestic season. Yet the financial implications for the club are unclear.
Leicestershire made a record loss of £400,000 last year but new chief executive Mike Siddall said he is confident that settling the two legal actions against the club will not impact on cash-flow.
“We took into consideration the various legal cases and planned for scenarios A, B, C and D when we were looking at our financial position,” Siddall said.