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Pompey Takeover Saga


Fitzhugh Fella

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James Pearce @Pearcesport

R's barrister calls News of World "despicable". "Pursuit of front page overrides any sense of respect + decency for individuals involved"

Are we definitely sure this is not the Leveson Enquiry?

 

It makes sense for Redknapp's barrister to lay on the NotW intrusion angle thickly. The general public are receptive to giving the Murdoch press a kicking so the Jury could see this as such an opportunity. They would obviously be missing the point of the trial but human beings are an easily persuadable species....

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So.....

 

Chinny paid nothing for the club at all - when I stated that about 500 pages ago I was called a bedwetting conspiracy theorist ;)

 

Some reports say he paid £17m for the club - coincidentally the exact same figure he 'won' from daddy in his court case - so even if that cash went to the club it wasn't his anyway, so net outlay from Chinny of £0!

 

So, tell me, what exactly does he have to lose? He's paid nothing at all, and owns the stadium!

 

Whether he sells that to a developer or sells it to PCC under a CPO, he's still paid no money at all, and gets a few million in his back pocket for nothing. Is he better of ploughing millions of pounds into the club to keep it running until a buyer can be found, let's face it, you've been trying to find one for three years now and still no luck, or should he just liquidate the club in two weeks time, pay no money at all, and eventually receive a hefty wedge into his bank account?

 

I'm no hard nosed businessman like 'Arry is, but I know which option I'd take!

 

I have to agree! I've just finished compiling this:

 

Source: http://www.twohundredpercent.net/?p=12761

 

By Summer 2008 Arcady was apparently in a deep financial mire. He was

 

running a political campaign to become mayor of Jerusalem in the

 

elections of November 2008, not a cheap thing in itself, whilst at the

 

same time facing court action on a number of fronts for money owed –

 

the case with Ron Maneh was still ongoing. Angolagate was proceeding

 

apace and a new money laundering case was running alongside the Bank

 

Hapoalim issue. Arcady had to put up surety of $2.5m to bail himself

 

whilst the new investigation of accusations by a Dutch Company

 

continued.

 

In September 08 a receiver was appointed for Ocif on behalf of the

 

MTZF bank. Ocif’s value had now fallen by 50%. Creditors – including

 

Chainrai and Kushnir to whom Arcady had defaulted on the Ameris deal –

 

appeared to be queuing up for their money. In a complication of court

 

cases Ocif was sold and the bank got repaid. There doesn’t seem to

 

have been enough collateral to appease other litigants however, as

 

liens on Arcady’s assets were appointed to three separate parties in

 

three separate judgements.

 

It is at this time that PFC appears on a list of Arcady’s assets.

 

Quoting Ydioth Ahronoth – an Israeli newspaper – the Times and other

 

UK papers reported that Arcady valued Pompey at £300m. This unlikely

 

sum gave the statement a surreal feel and the Premier League probably

 

felt secure in stating that Sacha was the owner. What Arcady’s Israeli

 

creditors may have felt is not known.

 

Speculation concerning PFC was rife and in October 2008, whilst Harry

 

was jumping ship, an article appeared in The Times suggesting that

 

court documents in the Angolagate investigation showed Sacha had in

 

the past received some of Arcady’s arms dealing profits – about £34m.

 

Sacha maintained that his business interests were distinct and

 

separate from his father’s. The Premier League were called on to

 

investigate by the government but nothing further was reported.

 

As far as Israel was concerned Arcady seemed to be finished. In

 

December 2008 he paid the $2.5m surety to the court and fled Israel

 

for Russia – in a luxury jet plane. Haaretz headlined the event ‘Mogul

 

Gaydamak is fated to wander the world as a vagabond.’ The article

 

concluded:

 

All of the scandals have helped to forge the image of Gaydamak,

 

that of a combative and quarrelsome man, who lives with the powerful

 

contention that the world is against him. His jaunt in Israel lasted

 

four years, in which his star rose like a blazing comet to the sky,

 

eventually falling back to Earth with the same speed.

 

Not only did his workings and management style trip him up, it did

 

the same for the Israelis he came in contact with, from financiers to

 

politicians to lawyers and journalists that were willing to bow before

 

any big mogul bursting forth from the darkness, without bothering to

 

check whom they were dealing with.”

 

In January 2009 one Daniel Azougy appeared at Betar demanding money,

 

supposedly on behalf of Arcady, but the club appeared to be on the

 

verge of bankruptcy and Azougy got nothing. Betar, like Pompey at the

 

same time, started to sell off their playing squad.

 

By April 2009 there were claims in the Israeli press that Sacha was

 

hiding Arcady’s money. Arcady’s creditors were still persuing payment

 

and this story, true or not, can not have appeased them. Sacha told

 

Storrie to find a buyer for PFC. May 2009 was when the games with PFC

 

really began. First came al Fahim, then Storrie’s ‘taking PFC to a

 

level you won’t believe’ consortium – which included people suing

 

Arcady. This consortium is the one that finally gained control in

 

October 09 and involved, to varying degrees, parties who included Mr

 

Chainrai, Mr Kushnir, Mr Maneh and his lawyer Yoram Yossifoff and we

 

were told that Mr Chainrai’s Portpin lent money to Mr al Faraj’s

 

Falcondrone. They brought in Mark Jacob, who had been an associate of

 

Yossifoff’s since 2000 and was Mr Chainrai’s lawyer. Also in their

 

train, convicted fraudster Daniel Azougy, who talks of his association

 

with Yossiffof and Maneh in the BBC ‘Fit and Proper’documentary.

 

Incidentally, Mr Maneh and his lawyer Yoram Yossifoff, are currently

 

(May 19th 2011) under investigation in Israel for tax evasion. Of course, the

 

consortium was fronted by that well known Saudi, Mr Ali al Faraj.

 

By the time al Fahim was failing in September 2009, the Israeli courts

 

had awarded Chainrai and Kushnir another lien on Arcady’s assets on

 

September 28, which included Betar Jerusalem, his house in Caesarea,

 

Bikur Holim hospital and a number of cars. However, the viable status

 

of these assets was questionable and Betar Jerusalem undoubtedly was

 

in debt to the verge of bankruptcy. Considering that by March 2010

 

Chainrai and Kushnir were threatening Arcady with bankruptcy

 

proceedings one can only assume they didn’t get what they were

 

claiming as a result of this charge. There was an out of court

 

settlement of this case in June 2010. What that settlement entailed

 

was not reported.

 

ESB

I cannot substantiate but IIRC there was mention of Chanrai

 

getting....£17m. I believe that Chanrai never got his £17m, but

 

instead 'Paid' Sacha a figure of £17m for PFC." Could this probably

 

mean that he is, if not in profit, breaking even on any monies he

 

loaned Arcady Gaydamak?

In January 2010 Sacha Gaydamak gave an interview to Colin Farmery.

 

When asked about his father’s connections to Balram Chainrai, Levi

 

Kushnir, Ron Maneh, Yorim Yossifoff and Daniel Azougy he suggested

 

their involvement in Pompey was just a coincidence. The glaring

 

question is, would they have been so aware of PFC if they hadn’t been

 

interested in Arcady’s business affairs and did their difficulties in

 

getting paid by Arcady play any part in their desire to control the

 

club? The land needed for the future essential development of Pompey

 

as a successful business still rests in the hands of Sacha Gaydamak.

 

You have to ask yourself, in the light of this history, whether there

 

is any room for amicable negotiation between the two factions involved

 

in the debacle of October 22? Will these matters continue to affect

 

the club?

 

The story is not over. Until Mr Chainrai and Mr Kushnir show us how

 

they are going to run our club we need to maintain our interest in

 

their business methods. The point of retelling all this is that we can

 

not yet afford to forget how we got where we are now. The strong

 

feelings evoked in Portsmouth by the near loss of the club have left

 

their mark. That the story goes beyond Pompey and even football only

 

highlights the need for more careful regulation of the business of

 

football and the ownership of clubs. That such events can have a

 

knock-on effect onto the community and City of Portsmouth – so far

 

removed from the source of the problem – is testament to the fact that

 

English football has become too far detached from its origins. Time to

 

give football back to the fans.

 

Acknowledgements

 

This somewhat simplified (believe me) history is indebted to two

 

Pompey sources for its origins. The first is the work done by pompey-

 

fans.com, in particular by Mike Hall, in unearthing the connections

 

between the people involved. The second is the excellent archive of

 

the pompeyonline.com message board, in particular the posts of gazzpfc

 

going back to 2005. These latter posts provided a number of the

 

Israeli newspaper sources listed in the notes below.

 

ESB

 

No wonder Chanrai doesn't want to relinquish ownership of the club! :smug: :o

 

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Quite right. The point I was trying to make was that despite the covenants supposedly protecting the ground, they proved to be worthless.

 

There seems to a number of parallels developing between Sholing and p****y....

 

No argument from me. The covenant wasn't worth the paper it was written on. I bailed out a season or two before they went belly up.

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http://www1.skysports.com/football/news/11688/7491389/

 

android, days left to stop club going into admin

 

What a surprise...wouldn't you think...

 

1) That would be his purpose in life (as it has been since CSI went in to admin) to realise the best result for the CSI personnel who are owed?

 

2) That HMRC are actually meeting P*mpey to discuss collecting the tax owed (and paid by the employees but not passed on) on 20th of this month?

 

Another 48 hrs...within a few days...Mr zero credibility strikes again!

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So the ground has a covenant on it, does it. That's all well and good, and of course the council are making lots of noises about it staying as a football ground - it's a vote winner...it's not rocket science.

 

This may well be the case if there is a football club, but it's naive to believe that will be the case if there is no football club. The council may well still turn down a planning application, but any appeal will be out of their hands and go to the planning inspectorate and even up to central government. Result? Council get votes still for 'standing up to evil Chinny', Chinny gets his planning approval granted, and Tescos buy the land.

 

Without a football club, there's no reason to turn down a 'change of useage' planning request.

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So the ground has a covenant on it, does it. That's all well and good, and of course the council are making lots of noises about it staying as a football ground - it's a vote winner...it's not rocket science.

 

This may well be the case if there is a football club, but it's naive to believe that will be the case if there is no football club. The council may well still turn down a planning application, but any appeal will be out of their hands and go to the planning inspectorate and even up to central government. Result? Council get votes still for 'standing up to evil Chinny', Chinny gets his planning approval granted, and Tescos buy the land.

 

Without a football club, there's no reason to turn down a 'change of useage' planning request.

 

To be honest I don't care if they keep the ground for the new AFC Poopey - it's not much above Conference standard anyway.

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So the ground has a covenant on it, does it.

 

I emailed Gerald Vernon Jackson with that very question over a year ago..

 

His response then was that there were no restrictive covenants in place (not in the legally enforceable sense, anyway) and, absent redevelopment of the current 'stadium' by the club, the council policy would be in support of the re-housing of PFC before permission was granted for any other development on the land currently occupied by Fratton Park.

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I emailed Gerald Vernon Jackson with that very question over a year ago..

 

His response then was that there were no restrictive covenants in place (not in the legally enforceable sense, anyway) and, absent redevelopment of the current 'stadium' by the club, the council policy would be in support of the re-housing of PFC before permission was granted for any other development on the land currently occupied by Fratton Park.

 

And if there is no PFC..................

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To be honest I don't care if they keep the ground for the new AFC Poopey - it's not much above Conference standard anyway.

 

It's more a case of will they ever be free of Chinney. If they form AFCP but then rent the ground from him are they actually much better off than before. I can't see how they would have enough money as a newly formed club to buy it off him (or Sacha's bit) so it's rent or nothing if they stay there. And that's before thinking about the maintenance costs.

 

They need to walk away from it and start again (moneyfields anybody?).

Edited by Winchester Red
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It's more a case of will they ever be free of Chinney. If they form AFCP but then rent the ground from him are they actually much better off than before. I can't see how they would have enough money as a newly formed club to buy it off him anyway (or Sacha's bit). Let alone the maintenance costs.

 

They need to walk away from it and start again

 

Trouble is I'm not sure they'll afford the rent - with a £20M pricetag on it, he's going to want at least a 5% pa return on that investment, and knowing what we know about him, likely to be considerably more. Beyond the means of P*mpey, let alone AFC P*mpet playing at a much lower level.

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And if there is no PFC..................

 

Quite so, although the point being that the council couldn't necessarily rely on rigid and enforceable covenants to decline planning applications ad infinitum, even if there remained a 'PFC' (in one guise or another)..

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SSN...'and the latest from Portsmouth where the players and staff are left waiting for their January wages'

 

I think they meant 'and the latest from Portsmouth where the players and staff are left waiting for their January wages, and the tax payer is left waiting for their November, December and January PAYE and NI'

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It's more a case of will they ever be free of Chinney. If they form AFCP but then rent the ground from him are they actually much better off than before. I can't see how they would have enough money as a newly formed club to buy it off him (or Sacha's bit) so it's rent or nothing if they stay there. And that's before thinking about the maintenance costs.

 

They need to walk away from it and start again (moneyfields anybody?).

 

I agree. They seem to think that there are two plans;

 

Plan A - someone with a few hundred million to burn buys them, saves them and keeps them going as they are

Plan B - start again elsewhere in non league, and leave Chinny to sort the ground out.

 

Why wouldn't there be a Plan C? Buy the club out of admin for peanuts, 'persuade' the high earners to kindly feck off for free or small transfer fees in order to keep the club going, fill the team with low paid players / younger players / free transfers and try and retain league status in L1 at another local ground. Would H&W be a reasonable size for a L1 team? Having been to D&R last season, it can't be any smaller than that.

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I agree. They seem to think that there are two plans;

 

Plan A - someone with a few hundred million to burn buys them, saves them and keeps them going as they are

Plan B - start again elsewhere in non league, and leave Chinny to sort the ground out.

 

Why wouldn't there be a Plan C? Buy the club out of admin for peanuts, 'persuade' the high earners to kindly feck off for free or small transfer fees in order to keep the club going, fill the team with low paid players / younger players / free transfers and try and retain league status in L1 at another local ground. Would H&W be a reasonable size for a L1 team? Having been to D&R last season, it can't be any smaller than that.

 

Even in admin, they'd be buying off Chinny. Normally admin would reduce the price, but in this case it won't. All of the problems stem from the secured debts, which wouldn't be affected by administration.

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It's more a case of will they ever be free of Chinney. If they form AFCP but then rent the ground from him are they actually much better off than before. I can't see how they would have enough money as a newly formed club to buy it off him (or Sacha's bit) so it's rent or nothing if they stay there. And that's before thinking about the maintenance costs.

 

They need to walk away from it and start again (moneyfields anybody?).

Well quite! There is no way that AFCP could afford to rent and run FP, with the initial 5 or 6k that will continue to watch them. They would have to rebuild like Wimbledon has, probably sharing with H&W (don't think Moneyfields, would have the capacity or expansion potential).
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SSN...'and the latest from Portsmouth where the players and staff are left waiting for their January wages'

 

I think they meant 'and the latest from Portsmouth where the players and staff are left waiting for their January wages, and the tax payer is left waiting for their November, December and January PAYE and NI'

 

Actually they dont owe PAYE for January, because you actually have to pay someone to pay PAYE :-)

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Admin would stave off HMRC in the short term but the secured creditors would remain and failure to meet the terms of the CVA could/would be catastrophic.

 

The problem is as I can see, is that HMRC is still a minor creditor.

 

Pompey owe CSI £10m

Pompey owe £20m to old company to pay CVA. Remember Pompey don't have a CVA but old company do

Pompey owe £1.5 - £2m in tax to HMRC

Pompey owe players and other expenses say £1m (Just randomly made up figure but just helps give an idea)

 

So in all HMRC and other creditors in total are very small. So worst case senario is that they don't agree a CVA but in theory still could get away with it albeit with a say -30 points.

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The problem is as I can see, is that HMRC is still a minor creditor.

 

Pompey owe CSI £10m

Pompey owe £20m to old company to pay CVA. Remember Pompey don't have a CVA but old company do

Pompey owe £1.5 - £2m in tax to HMRC

Pompey owe players and other expenses say £1m (Just randomly made up figure but just helps give an idea)

 

So in all HMRC and other creditors in total are very small. So worst case senario is that they don't agree a CVA but in theory still could get away with it albeit with a say -30 points.

:lol: that all? no worries then
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Was making sense until about 1/3 the way down when it suggested UHY were acting in a way that was contrary to Chainrai's best interests.

 

Seems to me that if UHY are doing their best to make the club go pop (and i'm not convinced they are), then perhaps that is also what Chainrai is aiming for. As the preferred creditor, he's first in line to get anything out of the assets, which presumably includes the 400k raised in the transfer window.

 

Everyone assumes he needs to get £17m out of the club and so has to stick around. But there are two reasons this is unlikely:

 

1 - as a shrewd businessman (clearly very wealthy, and not by accident), he'll always be looking to maximise his return, irrespective of sunk costs. With old CVA looming and new debts mounting up, he may at this point be prepared to cut his losses.

 

2 - if he's been charging interest for the last 2 years (what loan shark wouldn't have?) then perhaps he's not actually 17m in a hole anyway.

 

If the club is liquidated, then he has a more than reasonable chance of selling FP for development. Is it worth £20m? Not a chance. But £3-5m might be enough incentive for him to go down that route. Especially as it is arguably the lowest risk option of all at this point...

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Was making sense until about 1/3 the way down when it suggested UHY were acting in a way that was contrary to Chainrai's best interests.

 

Seems to me that if UHY are doing their best to make the club go pop (and i'm not convinced they are), then perhaps that is also what Chainrai is aiming for. As the preferred creditor, he's first in line to get anything out of the assets, which presumably includes the 400k raised in the transfer window.

 

Everyone assumes he needs to get £17m out of the club and so has to stick around. But there are two reasons this is unlikely:

 

1 - as a shrewd businessman (clearly very wealthy, and not by accident), he'll always be looking to maximise his return, irrespective of sunk costs. With old CVA looming and new debts mounting up, he may at this point be prepared to cut his losses.

 

2 - if he's been charging interest for the last 2 years (what loan shark wouldn't have?) then perhaps he's not actually 17m in a hole anyway.

 

If the club is liquidated, then he has a more than reasonable chance of selling FP for development. Is it worth £20m? Not a chance. But £3-5m might be enough incentive for him to go down that route. Especially as it is arguably the lowest risk option of all at this point...

 

A far better summation than that blog article; in fact, said article reads almost like something that Ho might have written. All the usual fantasy stuff is there - far from being a bottomless money-pit, Pompey represents a decent investment for some lucky chap (or chapette), the high earners can be effortlessly shifted out of the club, Chainrai will let go of his debenture on PFC and his charge on Fratton Park for next to nothing if he's got any sense, and of course Gaydamak will part with the land he owns for a fiver or so if he's asked nicely...

 

The only way it differs from Ho's ramblings is in acknowledging that Chainrai's debenture and charge do indeed exist - more than I've ever seen Ho do. And why is it that so many of the few find it so hard to understand that, should Pompey be liquidated, ownership of Fratton Park will revert to the charge-holder, namely Portpin? It won't be an asset of a liquidated company, it will belong to Portpin, pretty much as it does now.

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The problem is as I can see, is that HMRC is still a minor creditor.

 

Pompey owe CSI £10m

Pompey owe £20m to old company to pay CVA. Remember Pompey don't have a CVA but old company do

Pompey owe £1.5 - £2m in tax to HMRC

Pompey owe players and other expenses say £1m (Just randomly made up figure but just helps give an idea)

 

So in all HMRC and other creditors in total are very small. So worst case senario is that they don't agree a CVA but in theory still could get away with it albeit with a say -30 points.

 

Firstly for a CVA to be agreed they have to be able to have the business as a going concern whcih (whcih is a krypton factor challenge in itself) or find a buyer (more and more unlikely) but lets say one of the above does happen and a CVA is proposed - the old Co is run by Baker Tilley who were appointed as liquidators at the request of HMRC so if HMRC and Baker Tilley are as 'in bed together' as I think they may be, then agreeing a CVA for anything less that 100% looks less and less likely. Even if BT play a very independant role I still think they'll be as stubborn as HMRC given CVA is repaying pretty much f-all of the original debt.

 

So if no CVA is agreed PFC won't get away with it because all the debts are still 100% due plus they'll have the -30 points (10 fro admin & 20 for exiting without CVA) then if Bagpuus & MadMilan are found guilty it could be more.

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Admin would stave off HMRC in the short term but the secured creditors would remain and failure to meet the terms of the CVA could/would be catastrophic.

Not so sure about that in the short term. Admin, IF that is possible and acceptable to the Court, will stave off all creditors, including Baker Tilley. I think there is a significant difference between PFC's payment terms to BT & BT's obligations to pay out the CVA.

 

Final payment under the CVA must be made to the creditors by BT by 2015, but there is no firm obligation to make any earlier part-payment, so they could pay the whole lot in 2015 and still meet the terms of the CVA.

 

PFC's obligation to pay BT in instalments is, however, a separate commercial transaction starting in 2012. Failure by PFC to make the stage payments will lead to a commercial dispute between PFC & BT, but will not necessarily bust the terms of the CVA, and admin would in the meantime protect PFC from attack by BT.

 

The whole CVA and Oldco/Newco palaver is a very clever but devious work of art by AA, designed entirely to make Newco as "saleable" as possible for Chainrai, and he very nearly pulled it off. The only piece of his clever jigsaw he missed out on was his own appointment as liquidator of Oldco. If he had achieved that as well, then even the Lithuanian Government pulling the rug would just have been an inconvenience, and he would have started all over again.

 

It's the payment to BT in April that is making things very difficult for them at the moment, even if they manage to go into admin again. AA could have rescheduled that, and used any incoming parachute payments as "working capital" (as they call it, I call it cash) to finance the administration, but BT won't.

 

The problem is as I can see, is that HMRC is still a minor creditor.

 

Pompey owe CSI £10m

Pompey owe £20m to old company to pay CVA. Remember Pompey don't have a CVA but old company do

Pompey owe £1.5 - £2m in tax to HMRC

Pompey owe players and other expenses say £1m (Just randomly made up figure but just helps give an idea)

 

So in all HMRC and other creditors in total are very small. So worst case senario is that they don't agree a CVA but in theory still could get away with it albeit with a say -30 points.

Not quite. Remember there are 2 votes to approve a CVA. In the second vote "connected Parties" are ignored. CSI, as shareholder, are connected so don't get to vote in the second ballot. That is, if they are unsecured. If they are secured they don't get to vote at all.

 

And, at the moment, they don't owe BT anything (in a "due and payable" sense). True, they will in April, but not today. IF they go into admin again before April, BT will not be an unsecured creditor, but the Administrator will have to have sufficient funds to be able to make the scheduled payment to BT as well as meet all the other running costs.

 

I think HMRC would be in a very strong position in any new Administration, but that's just my opinion.

Edited by hutch
spelling - again!
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SSN have f*cked it up this morning

 

Ticker saying January wages still not paid (fine) and that club have re-entered administration following wup issued in January. This as 7.40am

 

Was so surprised I watched the whole ticker round again!

 

But no other announcement and SSN making nothing of it so probably some junior at the back getting the facts wrong

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I would like to know why, if it is true, that AA quoted 32 million needed for other possibly buyers but requested proof of 100 million from the supporters group? If the figure of 32 is to guarantee chinny gets his money back so why is making certain the supporters group does not take over more important than a chance he might get his money back? (not that there is much chance they could raise the 32 million)

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One thing that we still haven't had the outcome on is the BDO report, I am sure it has been completed but why not published?

My guess, they're waiting to hit them with all the points at the same time, rather than a few here and a few there.

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My guess, they're waiting to hit them with all the points at the same time, rather than a few here and a few there.

 

Agree

 

There are so many possibilities (it's like Christmas!)

 

1) trading whilst insolvent

2) entering administration

3) additional penalty for not being the first time

4) exiting without a cva

5) defaulting on a previous cva

6) illegal payment from owner to employee

 

What have I forgotten?

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I see that Portsmouth is making a big fuss abou tbeing the birthplace of Charles Dickens, even though he had the good sense to move away almost immediately after he was born. So on this anniversary of his birth , may I be the first to remind them of the wise words of Mr Micawber?

 

Annual income twenty pounds, annual expenditure nineteen nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result Portsmouth in liquidation.

 

(well 'misery' really but much the same thing for them)

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