Stewart Donald on how Sunderland will deal with potential £15m of 'additional bad news'

Donald bought the club from Ellis Short for £40million, the deal structured in a way that only a small fee was paid up front with the rest in installments.

It allowed Donald to deal with a raft of legacy transfer payments - Sunderland owe £20m+ in August - and a huge wage bill in excess of the League One average.

The liabilities are partially due to legal disputes over former players, with the club possibly facing further financial punishment over Ricky Alvarez.

The Black Cats signed Alvarez on loan from Inter Milan in 2015 but were last year ordered to pay more than £9million for a player they never owned.

Donald hopes to come to an agreement with Ellis Short regarding some of the liabilities but is exploring back-up options, though he says needing a loan is only '5% to 10% likely'.

Speaking on the Roker Rapport Podcast, Donald said: "We don't need any external finance but there are a few things that have come out that have been a bit of a surprise so we might keep that as a back-up in case they turn out in a negative manner because they are quite substantial.

"I was always willing to cover the short-term cash hole. This (the loan) is for things that fall out of the deal with Ellis. There's Alvarez and four or five other things of a similar value.

"You budget for contingencies on some of those but the financial picture may end up looking a little bit worse than what we hoped.

"You have to remember that we did the financial due diligence in a couple of weeks. Ellis was very keen to offload and we knew there was a cashflow shortage of X.

"You budget for some things to come out but there might be a few heftier ones.

"As long as you can deal with those properly there will be no need for external finance. If those things don't go our way, that may have a minor impact.

"The Alvarez claim, and again you can come down to the level of due diligence, but fundamentally we spoke to everyone and that was a cast-iron 'we're not going to lose that'. And we lost that.

"There were two other cases which have materialised."

Donald added: "I would say at the moment there's probably - potentially - £10m to 15m worth of additional bad news.

"Or things that were there but I would argue that Stewart Donald and Sunderland Football Club shouldn't pay.

"Those have materialised and the view was if we need the finance that's what it's for, but I would argue that we shouldn't need it.

"I don't think that loan is anything that is to worry about, is it likely? I would say 5 to 10% likely."

He said: "I haven't asked him and I don't want to ask him. I don't want to hock the club up with a load of loans and debt."