Pompey Takeover Saga

[pedg]

Not sure if this link has gone on here yet :

http://www.bbc.co.uk/blogs/mattslater/2010/02/portsmouth_fc_in_crisis_qa.html

 

Includes the following "

Q: Who will be the administrator?

A: This is still unclear, but we know it will not be Nick O'Reilly, the man who prepared the club's recent "statement of affairs". This document was the financial reckoning Portsmouth had to submit to court last week and it would have contained all the gory details (debts of £70m, a tax bill of £12m and rising, and a see-the-season-out estimate of £20m), as well as his opinion on the outcomes, in terms of money returned to creditors, of administration and liquidation.

Chainrai either disliked O'Reilly's candour or he balked at his quote, which is believed to have been £1m. This may seem like another professional's attempt to wring money from the club, but it should be remembered an administrator becomes liable for the company's debts and businesses in administration have proved they are not that great at paying those.

To not use the expert who did your statement of affairs as your administrator is unusual and should ring alarm chimes. But then this is the club that pleaded poverty to the other 19 Premier League clubs in January shortly before signing Quincy Owusu-Abeyie and Dusko Tosic."

 

And this "

Q: Why has this happened now?

A: Because Pompey, and all its owners and ex-owners, have run out of more attractive options. The "next idiot" production line is on the blink.

 

It takes weeks to buy something as complicated as a football club (and that is just the solvent ones) as any prospective new owner would want to know exactly what he or she is buying. In Pompey's case, it is an indebted Championship team in a shabby stadium with almost no corporate seating, a battered credit rating and a murky recent ownership structure. Do not be fooled by talk of talks."

 

That is a good article. The line

 

"Some will want to add corruption to this co cktail (and I may, one day, be able to say something about this)"

 

sounds very conspiratorial

[Pancake]

That is a good article. The line

 

"Some will want to add corruption to this co cktail (and I may, one day, be able to say something about this)"

 

sounds very conspiratorial

 

Interesting.

[Kingsland Codger]

Just wondering about the rent that Chainrai can charge on FP. If you rent a house then maintaining it is usually an expense for the owner. If Chainrai owns FP and rents it back would he then be required to pay for its maintenance, etc (After all the paint you can apply direct to rust does not come cheap!). Could mean that though he may charge 1M a year he may well not see all of that?

 

But the anti-rust pain bill needn't be all that high. Ater all, around two-thirds of the stadium would be moth-balled;only part of one stand need remain open.

[slickmick]

Lifted this from main forum incase it gets missed:

 

Questions and Answers on administration

 

Pompey's announcement makes administration at the end of the week almost certain.

But what does it mean for the club?

 

We have enlisted the help of Julie Palmer, partner at Begbies Traynor, the firm which oversaw Southampton FC's administration last April, to answer the fans' questions.

 

Q: What happens next?

A: On Friday, the club will file its intention to appoint an administrator with the courts. It then has two weeks to enter administration officially, by returning to court with details of the firm which will administrate Pompey, and filing for full administration.

 

Q: Who chooses the administrator?

 

A: Portsmouth Football Club's directors make the decision. But from there, they play no further part in its official business.

 

Q: How does it affect Pompey's High Court case?

 

A: As soon as the intention to enter administration is filed, the winding-up petition is stopped in its tracks. There will be no developments and no hearing. When the club enters full administration, the winding-up petition ends entirely.

Q: What is the administrator there to do?

 

A: The administrator is responsible to all the business's creditors. It must realise the company's assets, in order to get as much as possible to pay them.

 

Q: Does this mean they will break the club up and sell it off?

 

A: No. The administrator's main role is to try to find a buyer, who can repay the club's debts.

The debts are ring-fenced, which means it's not the administrator's role to pay them.

They will be paid from money the company is paid, such as for transfers or money from the Premier League, and the cash from its sale.

The administrator must get the best possible value for the club, and that means maintaining its assets. Portsmouth's greatest asset is as a football club with a place in a league. Its sale on that basis will be much more profitable than breaking it up and selling it piecemeal.

 

Q: Who are the creditors? How much do they get?

 

A: Pompey's creditors fall into three categories: football creditors, who include clubs who are owed transfer fees, playing staff who are owed wages and the police if they are owed cash for policing Pompey's home games.

They must be paid in full. Secured creditors, including property owners such as Balram Chainrai and Sacha Gaydamak, come next, and will be paid all they are owed, as long as enough money remains after the football creditors are paid. Unsecured creditors, including the Inland Revenue, are paid from what remains.

 

Q: What are the football penalties for entering administration?

 

A: Portsmouth will be fined nine points, which will count against this season's total. The club must then enter into a Company Voluntary Arrangement (CVA) by the end of the season.

Failure to do so would result in a 15-point penalty at the start of next season, whichever division Pompey is in then.

The CVA is for unsecured creditors. Of those who vote, the owners of 75 per cent of the debt must be in favour.

But because HMRC disagrees with the order of repayment priorities set by the Premier League and Football League, its policy is always to vote against CVAs. If Portsmouth owes less than £47.2m, and £11.8m of that is to HMRC, it will lose the vote and lose 15 further points. If it owes more, and can convince everyone to vote, it will win and the CVA will be put in place.

 

Q: What else happens if the CVA vote is lost?

 

A: Typically, the company's liquidated. Its assets are sold and creditors are paid off at a specified rate, perhaps 10p in the pound.

So creditors, apart from football creditors who must be paid in full, lose out. But the football club can be sold as part of the liquidation process, so it can exist as a new

Edited 24 February, 2010 by slickmick

[Scummer]

Just wondering about the rent that Chainrai can charge on FP. If you rent a house then maintaining it is usually an expense for the owner. If Chainrai owns FP and rents it back would he then be required to pay for its maintenance, etc (After all the paint you can apply direct to rust does not come cheap!). Could mean that though he may charge 1M a year he may well not see all of that?

 

The rent is for the land though, not the actual stadium isn't it? The new owner would still have to pay for the upkeep.

[so22saint]

So, seeing as we're unlikely to go up this year but should expect to next, basically we're not going to play them again for ages. I'm fairly gutted about that, though not about them being below us for ages

[slickmick]

Sorry missed a bit off paste :

 

Q: What else happens if the CVA vote is lost?

 

A: Typically, the company's liquidated. Its assets are sold and creditors are paid off at a specified rate, perhaps 10p in the pound.

So creditors, apart from football creditors who must be paid in full, lose out. But the football club can be sold as part of the liquidation process, so it can exist as a new entity, separate from the old company and can continue in the league. The playing side of the club is worth most, with its ability to play in the league, attract crowds and sell players. So if the business is broken up, the club could still attract buyers.

 

Q: Who pays the wages while Pompey's in administration? Mr Chainrai has said he will pay the £3m administration fee and cover the club's wages for the full administration period.

 

A: The fee and wages must be paid, by the company's owners or another interested party. His offer might seem strange, but it's in his interest for the administrator to keep the club going as long as possible, to maximise the chances it will be sold and the debt to him repaid in full.

His is a secured holding, but he only gets his money back if there's enough left over after the football creditors are paid.

He's paying the wages to preserve his investment.

 

Q: Will non-playing staff continue to be paid?

 

A: The administrators, not Mr Chainrai, will decide who the club continues to employ. But all employees retain their rights.

Employees laid off at the decision of the administrators can claim for holiday pay or earnings they're owed.

They can claim up to eight weeks' wages and six weeks' holiday pay, to a value of £800 for each, from the government, which then becomes a football creditor, for the amount it has paid out.

If they're owed more, that must be paid by the club's new owner.

 

Q: What happens to Chainrai and Gaydamak's property?

 

A: If, as is believed, Mr Chainrai owns Fratton Park, and Mr Gaydamak owns land around it, both would retain ownership and could rent them back to the club. But it's more likely they'd offer them as part of a deal.

In Mr Chainrai's case he could see the £17m he might receive for the ground as repayment of his debt, if it's tied up in his original loan.

He and Mr Gaydamak would understand a football club which owned its ground and offices would be more attractive to a buyer than one tied into a rental agreement with former owners.

 

Q: Is administration the beginning of the end?

 

A: It can be an excellent choice. If buyers are interested, but unwilling to buy without full due diligence, this gives them the time to do that, and to be sure about what they're buying.

[edsaint]

The CVA is for unsecured creditors. Of those who vote, the owners of 75 per cent of the debt must be in favour.

But because HMRC disagrees with the order of repayment priorities set by the Premier League and Football League, its policy is always to vote against CVAs. If Portsmouth owes less than £47.2m, and £11.8m of that is to HMRC, it will lose the vote and lose 15 further points. If it owes more, and can convince everyone to vote, it will win and the CVA will be put in place.

 

Thanks this was the clearest explanation we have had on this thread on the mechanics from here on. But the explanation of the CVA is still a bit ambiguous. Do only unsecured creditors get to vote on the CVA, in which case -15 seems a certainty as HMRC is bound to be the biggest unsecured or do all creditors including the secured?

[Saint_Ash]

Seems strange that if the CVA is denied due to the unsecured creditors voting against the club will get -15 as well as being wound up? Confused about that.

[benjii]

Seems strange that if the CVA is denied due to the unsecured creditors voting against the club will get -15 as well as being wound up? Confused about that.

 

The company will be wound up. The club (ie the assets necessary to operate a football team, and the place in the league) could still be bought from thecompany.

[unionhotel]

Storrie teller has been quoted in the Times as saying;

 

"I've seen salary figures of £1.4 million bandied around for me but my basic salary is less than half of what has been reported.

 

"The rest of it has been a bonus given by (former owner) Sacha Gaydamak every year. That's in recognition of me keeping the club going for him by selling players. But I am prepared to cut my basic [pay] quite substantially."

 

Surely he meant past years or is Gayboy still implicated in this in some way other than being a creditor?

 

For a man that's allegedly owed over £30m he doesn't seem to be showing up much on the radar. Could it be that the combined debts of Chin-up and Gayboy are purely fictional amounts?

 

Apart from being done for tax evasion and fraud, they should also be done for necrophilia. They've been ****ging this dead corpse for years and rather than injecting some life into it all they've actually been doing is stirring the porridge. YUK

[slickmick]

Thanks this was the clearest explanation we have had on this thread on the mechanics from here on. But the explanation of the CVA is still a bit ambiguous. Do only unsecured creditors get to vote on the CVA, in which case -15 seems a certainty as HMRC is bound to be the biggest unsecured or do all creditors including the secured?

 

 

I read it that it was only the unsecured creditors. So I take it that means HMRC would have to be paid in full or else :

 

Q: What else happens if the CVA vote is lost?

 

A: Typically, the company's liquidated. Its assets are sold and creditors are paid off at a specified rate, perhaps 10p in the pound.

So creditors, apart from football creditors who must be paid in full, lose out. But the football club can be sold as part of the liquidation process, so it can exist as a new entity, separate from the old company and can continue in the league. The playing side of the club is worth most, with its ability to play in the league, attract crowds and sell players. So if the business is broken up, the club could still attract buyers.

 

Still confused ???

Edited 24 February, 2010 by slickmick

[badgerx16]

Seems strange that if the CVA is denied due to the unsecured creditors voting against the club will get -15 as well as being wound up? Confused about that.

I think this relates to the idea the 'the club' can be sold as an asset to raise cash for the creditors, and then start up as AFC Poopey, or whatever, whilst the carcass of PCFC is buried and the grave danced upon. It is this new entity that gets the -15.

[Gingeletiss]

Just a simple question, to which I haven't got an answer. Can the court refuse an application for administration?????

[Gingeletiss]

Hope 'arry doesn't read this............

 

 

Lie detection expert Darren Stanton quotes in todays Sun P8 signs for spotting a liar: eye contact,where they look, what they say,how they stand.watch their hands,watch their lips, and twitches. I nearly choked on my breakfast on the last one "Liars often twitch which can be one of the easiest signs to spot. Often its the liars eyelids which twitch or it could be a tiny muscle in the cheek or neck. Males have an area at the bottom of the nose which actually twitches when we know we haven't told the truth".

[derry]

Just a simple question, to which I haven't got an answer. Can the court refuse an application for administration?????

 

Steve, can HMRC if they believe the administration to be inappropriate challenge in a higher court, ie injunction pending a hearing.

 

I'd be interested to know whether there are legal means of stopping administration proceedings through a higher court.

[St Marco]

Im not 100% sure on this one but i think if they are placed into admin by a creditor (which before monday is the only way they can go into it) then the HMRC case is canceled due to them not having a prefered creditor status.

The owner has said they are going into admin on friday, which is before monday so looks like i was right there.

 

The court case is about Pompey owing money. In the negotiations they have argued they will pay it, just not all up front.

The negotiations with HMRC showing they want to pay it just not all up front. Again which was correct.

http://news.sky.com/skynews/Home/Business/HMRC-To-Push-For-Portsnmouth-Football-Club-To-Be-Wound-Up-Over-Unpaid-Taxes/Article/201002215546018

 

If they go into admin it means they won't be able to pay it and thus the court case is pointless. Because being in admin they will already be protected by the courts and the admin team will try and find the money to pay back the creditors.

The Guardian seem to agree that the case will be dropped, as does everyone else.

http://www.telegraph.co.uk/sport/football/leagues/premierleague/portsmouth/7300078/Portsmouth-serve-notice-of-administration.html

 

If they went into court on monday with everything remaining as it is then they would probably be put in admin by the judge anyway.

Going back for a second appearance on monday would have been very unwise. So this is good news -BBC

 

With the SOA i think if it has been poved that they have traded when insolvent then a individual case can be brought against the people involved. In which they can be barred from being a director of a company and so on.

Official law: If the liquidator has come across conduct which makes the director unfit to be involved in the management of a company in the future (which things would include trading while insolvent) the DTI will apply to the Court for an order disqualifying the director or directors from acting as a company director for a certain period

 

As others have mentioned this is when things could become messy for the club. Because if let's say they go into admin, the admin team find the money and they then come out of admin and all is ok. In that case the judge could find and convict for financial irregularities. If that happens while they are in the CCC then they will get further points deductions or could even be kicked out of the league such as what happened to Swindon.

This is what happens when you have financial iregularities in footballhttp://news.bbc.co.uk/sport1/hi/football/teams/l/luton_town/7500435.stm

 

It is all very complex but if they are in admin i don't think the court case will go ahead. If the admin team can't find the money to keep the club running then they will go bankrupt anyway.

Think this one is pretty self explanitory. Unless you think admin teams bring with them shead loads of cash to pay the operating costs everyday?

 

 

No offence but you don't have a f***ing clue what you're talking about. Please, just shut up and let the adults discuss the issue. Cheers

 

So then 24hrs since good ole Red and Whites rather lovely post.

Still waiting for that apology

[slickmick]

I'd be interested to know whether there are legal means of stopping administration proceedings through a higher court.

 

 

Would of thought that Julie Palmer, partner at Begbies Traynor might have mentioned it if it was a possibility.

[Lord Duckhunter]

http://www.skysports.com/story/0,19528,11095_5977133,00.html

 

 

 

 

"The rest of it has been a bonus given by (former owner) Sacha Gaydamak every year. That's in recognition of me keeping the club going for him by selling players"

 

 

 

 

In basic English, a cut of any transfer profit.

 

Weeks ago a journo was on Sky saying that HR and Storrie-Teller were getting a cut of each and every transfer. He said it was unheard of for the CEO to get this ( Used to be common for the Manager) and was a conflict of interest.

 

How any Skates still back Storrie is beyond me.

[Goalie66]

Lifted this from main forum incase it gets missed:

 

Questions and Answers on administration

 

Pompey's announcement makes administration at the end of the week almost certain.

But what does it mean for the club?

 

We have enlisted the help of Julie Palmer, partner at Begbies Traynor, the firm which oversaw Southampton FC's administration last April, to answer the fans' questions.

 

Q: What happens next?

A: On Friday, the club will file its intention to appoint an administrator with the courts. It then has two weeks to enter administration officially, by returning to court with details of the firm which will administrate Pompey, and filing for full administration.

 

Q: Who chooses the administrator?

 

A: Portsmouth Football Club's directors make the decision. But from there, they play no further part in its official business.

Q: How does it affect Pompey's High Court case?

 

A: As soon as the intention to enter administration is filed, the winding-up petition is stopped in its tracks. There will be no developments and no hearing. When the club enters full administration, the winding-up petition ends entirely.

Q: What is the administrator there to do?

 

A: The administrator is responsible to all the business's creditors. It must realise the company's assets, in order to get as much as possible to pay them.

 

Q: Does this mean they will break the club up and sell it off?

 

A: No. The administrator's main role is to try to find a buyer, who can repay the club's debts.

The debts are ring-fenced, which means it's not the administrator's role to pay them.

They will be paid from money the company is paid, such as for transfers or money from the Premier League, and the cash from its sale.

The administrator must get the best possible value for the club, and that means maintaining its assets. Portsmouth's greatest asset is as a football club with a place in a league. Its sale on that basis will be much more profitable than breaking it up and selling it piecemeal.

 

Q: Who are the creditors? How much do they get?

 

A: Pompey's creditors fall into three categories: football creditors, who include clubs who are owed transfer fees, playing staff who are owed wages and the police if they are owed cash for policing Pompey's home games.

They must be paid in full. Secured creditors, including property owners such as Balram Chainrai and Sacha Gaydamak, come next, and will be paid all they are owed, as long as enough money remains after the football creditors are paid. Unsecured creditors, including the Inland Revenue, are paid from what remains.

 

Q: What are the football penalties for entering administration?

 

A: Portsmouth will be fined nine points, which will count against this season's total. The club must then enter into a Company Voluntary Arrangement (CVA) by the end of the season.

Failure to do so would result in a 15-point penalty at the start of next season, whichever division Pompey is in then.

The CVA is for unsecured creditors. Of those who vote, the owners of 75 per cent of the debt must be in favour.

But because HMRC disagrees with the order of repayment priorities set by the Premier League and Football League, its policy is always to vote against CVAs. If Portsmouth owes less than £47.2m, and £11.8m of that is to HMRC, it will lose the vote and lose 15 further points. If it owes more, and can convince everyone to vote, it will win and the CVA will be put in place.

 

Q: What else happens if the CVA vote is lost?

 

A: Typically, the company's liquidated. Its assets are sold and creditors are paid off at a specified rate, perhaps 10p in the pound.

So creditors, apart from football creditors who must be paid in full, lose out. But the football club can be sold as part of the liquidation process, so it can exist as a new

 

NO THEY Cannot as it they are subject to winding up order.Only a Prefferred creditor can take them into ADMIN.

[Sevvy]

As i see it.The SOA is now in the hands of the court and is now legally binding, the court case on the 1st was just a date to hear the evidence for the WUO, so the Inland revenue are within their right i belive to use this info in the SOA against them if found trading whilst insolvent, regardless of any Administration.

[OldNick]

As i see it.The SOA is now in the hands of the court and is now legally binding, the court case on the 1st was just a date to hear the evidence for the WUO, so the Inland revenue are within their right i belive to use this info in the SOA against them if found trading whilst insolvent, regardless of any Administration.

Now that would seem fair, but as people have said to me, who says the law is fair?

[slickmick]

As i see it.The SOA is now in the hands of the court and is now legally binding, the court case on the 1st was just a date to hear the evidence for the WUO, so the Inland revenue are within their right i belive to use this info in the SOA against them if found trading whilst insolvent, regardless of any Administration.

 

Q: How does it affect Pompey's High Court case?

 

A: As soon as the intention to enter administration is filed, the winding-up petition is stopped in its tracks. There will be no developments and no hearing. When the club enters full administration, the winding-up petition ends entirely.

Now, if a slot became available at the Courts by Friday, that could make it interesting.

Edited 24 February, 2010 by slickmick

[bridge too far]

Ever hopeful, I've been googling away like mad and came across this:

 

http://www.windingup.org/

 

Look at the Case Study. Does it not suggest that the Court has to agree to administration where a WUP has been presented? In the case study, the court was persuaded that administration was the best solution. But that surely begs the question - what happens if the Court IS NOT so persuaded?

[ericofarabia]

Hope 'arry doesn't read this............

 

 

Lie detection expert Darren Stanton quotes in todays Sun P8 signs for spotting a liar: eye contact,where they look, what they say,how they stand.watch their hands,watch their lips, and twitches. I nearly choked on my breakfast on the last one "Liars often twitch which can be one of the easiest signs to spot. Often its the liars eyelids which twitch or it could be a tiny muscle in the cheek or neck. Males have an area at the bottom of the nose which actually twitches when we know we haven't told the truth".

 

I bloody well did ......Splurtage of Red Bull and Vodka all over the place:D

[Winchester Red]

I bloody well did ......Splurtage of Red Bull and Vodka all over the place:D

 

Does this mean we can stop calling him twitchy and now just cut to the chase and call him LIAR?

 

[Sevvy]

Q: How does it affect Pompey's High Court case?

 

A: As soon as the intention to enter administration is filed, the winding-up petition is stopped in its tracks. There will be no developments and no hearing. When the club enters full administration, the winding-up petition ends entirely.

Now, if a slot became available at the Courts by Friday, that could make it interesting.

 

Nothing to do with the WUO as they now not getting any money at the moment if they go into Admin. one way is they can use trading whilst insolvent to get them.

[Hatch]

Hope 'arry doesn't read this............

 

 

Lie detection expert Darren Stanton quotes in todays Sun P8 signs for spotting a liar: eye contact,where they look, what they say,how they stand.watch their hands,watch their lips, and twitches. I nearly choked on my breakfast on the last one "Liars often twitch which can be one of the easiest signs to spot. Often its the liars eyelids which twitch or it could be a tiny muscle in the cheek or neck. Males have an area at the bottom of the nose which actually twitches when we know we haven't told the truth".

 

LOL.

 

Proper LOL.

[Foxy]

As i see it.The SOA is now in the hands of the court and is now legally binding, the court case on the 1st was just a date to hear the evidence for the WUO, so the Inland revenue are within their right i belive to use this info in the SOA against them if found trading whilst insolvent, regardless of any Administration.

 

Admin would stop the WUP.

 

And I doubt whether HMRC would care if they were trading while insolvent (some other body's concern) so they'd simply be joining the clamour for their share of whatever the administrator had to dish out. They may, of course, want to have a little chat with some of the employees or owners regarding seperate issues they may or may not have with their affairs but that would be a different conversation, possibly of interest to other HMRC bods.

[Burger]

"'In this world nothing can be said to be certain, except death and taxes." oh well can't use that quote again as you don't have to pay your taxes....cheating buggers

[Saint 76er]

Even if they do get themselves into Admin, is it kosher (for the benefit of the many Israeli's who must by now be reading this thread ) for Chanrai to personally pay the administrator, as he is claiming he will do?

 

Surely that is a conflict of interest, as an administrator would normally pay himself from funds he has generated through the business. Having his paymaster as one of the principle creditors trying to get as much dosh as he can out of the business seems to be, well, not quite kosher...

[No 2 to Maybush]

Admin would stop the WUP.

 

And I doubt whether HMRC would care if they were trading while insolvent (some other body's concern) so they'd simply be joining the clamour for their share of whatever the administrator had to dish out. They may, of course, want to have a little chat with some of the employees or owners regarding seperate issues they may or may not have with their affairs but that would be a different conversation, possibly of interest to other HMRC bods.

 

Definitely time for the Old Bill to step in (again) and finger Storrie's collar. Trading while insolvent is illegal, i.e. the law has been broken. I wonder if the EPL could be taken to court for aiding and abetting a company to trade while insolvent? They are certainly complicit by allowing Pompey to continue operating in their franchise. They certainly can't claim they didn't know!

[Channon's Sideburns]

Even if they do get themselves into Admin, is it kosher (for the benefit of the many Israeli's who must by now be reading this thread ) for Chanrai to personally pay the administrator, as he is claiming he will do?

 

Surely that is a conflict of interest, as an administrator would normally pay himself from funds he has generated through the business. Having his paymaster as one of the principle creditors trying to get as much dosh as he can out of the business seems to be, well, not quite kosher...

 

It is also an indirect confirmation that the club remains insolvent, as there is not sufficient income to cover the outgoings of admin....not to mention it was probably the only way to get an administrator to take it on.

[Foxy]

Definitely time for the Old Bill to step in (again) and finger Storrie's collar. Trading while insolvent is illegal, i.e. the law has been broken. I wonder if the EPL could be taken to court for aiding and abetting a company to trade while insolvent? They are certainly complicit by allowing Pompey to continue operating in their franchise. They certainly can't claim they didn't know!

 

To be honest the list of candidates for facing up to the dreadful majesty of the law seems to grow ever longer. My only concern is whether, after providing the customary 'greeting' for a motley cast of former owners, employees and hangers on, Mr Big will have sufficient romantic energy for 'Arry and Milan as I'm sure we'd all hope would be the case when they come to the party.

[Liquidshokk]

http://frattonise.blogspot.com/2010/02/pompey-circumvent-transfer-window-ban.html

 

Weird article from a bitter Skate...

 

A club insider said: “The idea came from the 12 ‘Fans’ shirt. They’ve got rid of everything else – it seemed the next logical step to ship out the crowd.

 

"To tell you the truth – which no-one round here bothers with much anymore – Bogroll Chainflush [current owner] actually thought ‘Fans’ was the name of the star player. ‘I’ve heard a lot of good things about this ‘Fans’ he said. ‘We have to cash in on him'.

[bridge too far]

I'm still searching for an authoritative piece on WUPs once a company has gone into administration.

 

Does anyone know if 'Administrative Receivership' is the same as being in administration? Because, on this website at the bottom of page 6, it says 'a winding up petiton can still be presented even if a company is already in administrative receivership (or voluntary liquidation).

 

http://www.insolvency.gov.uk/pdfs/guidanceleafletspdf/howtowindupyourown.pdf

[bridge too far]

And there's this:

 

'If the business IS VIABLE and has a good future then administration is a very powerful means to defined the company against the petition. Administration will “stay” (or postpone) the winding up petition and prevent a winding up order being made and any other legal action (except with leave of court).

 

To me, this reads that PFC stll have to attend the court on Mar 1. They wll say 'Oh it's OK now your Lordship, we've gone into administration'.

 

But his / her Lordship might well say 'but the business still isn't viable so I'm dismissing your defence - administration will solve nothing'.

 

The more I read, the more I'm convinced they'll try a pre-pack.

 

The administrator may propose a Company Voluntary Arrangement to protect the business for up to 5 years. Or it may be sold to a new company or buyers (including you as directors).

[OldNick]

 

The more I read, the more I'm convinced they'll try a pre-pack.

 

That IMO has been the talks for the last few days.They have been looking at the books readying for a bid to the administrator or even setting this up. Storrie saying he is staying, tells me he has got the nod.

It is prepacked and a dodge to avoid justice IMO...what a surprise

[Doctoroncall]

Well, all other fans are talking about it, this from a boro furum:

 

Order of priority is:

 

1. Football creditors (players wages, managers wages, compenastion to ex managers, instalments of transfer fees owed to other clubs - and presumably owed to the premier league now)

 

2. The Secured Creditors (banks/anyone who has loaned money and taken either a mortgage on land or a debenture over the company's assets)

 

3. Preferential Creditors - this is now a very limited category of employee claims as set out in statute. Until 2002 the tax man had preferential status but no longer, hence why HMRC is getting more trigger happy

 

4. The Unsecured Creditors - basically everyone else

 

5. The shareholders - they only get anything if the unsecured creditors are paid in full and the reality is they will get nothing on administration or liquidation, certainly not from the shares. Near in mind these same people may actually have put in debt and may have security so that is where they may get a return.

 

Each category ranks what we call "pari passu" so only if one class is paid in full does anything pass down to the next, subject to something called the "prescribed part" which allots a small pool of realisations if there is a debenture and "floating charge" assets which is available to the unsecured creditors.

 

Costs of realisation of each class comes out of each pot first.

 

In reality I would be amazed if there is anything for the unsecured creditors in this.

 

As the winding up petition has been served they have to apply to the court for an admin order, they can't use the out of court routes.

 

 

On the application for the order you are right, they have to show that it will result in a better return to creditors than an immediate winding up but that should be quite easy to show. On a winding up they have to cease trading and the player registrations revert to the league so the players become free agents. That won't happen on an admin at least in the interim.

 

Any disposal since the winding up petition is void unless ratfied by the court but the inter relation with that and admin is complicated.

 

Once in administration the administrator has wide powers to challenge transactions entered into in relevant periods prior to the onset of insolvency.

 

All this however assumes the assets were all in the company that owns the football club. Assets could have been moved around ages ago and I think I have read that one of the previous owners owns either the stadium or land round it, probably via other companies. I'm afraid I don't know enough about the structure to comment.

 

In addition any disgruntled creditor can apply to the court to set aside a transaction defrauding creditors but that is VERY hard to prove.

[bridge too far]

That IMO has been the talks for the last few days.They have been looking at the books readying for a bid to the administrator or even setting this up. Storrie saying he is staying, tells me he has got the nod.

It is prepacked and a dodge to avoid justice IMO...what a surprise

 

Yes it does stink a bit, doesn't it. But I suppose the upside is that at least the employees will be protected, either by keeping their jobs or by getting due redundancy pay and holiday pay.

 

IIRC we all discussed pre-pack when we were in trouble, didn't we?

 

In any event, as I posted earlier, pre-pack is a lot more transparent now than it was a year ago, as legislation has been passed by Parliament to make it so. Maybe it won't be quite a straightforward as they might hope.

[Sour Mash]

So after all the hype on here about how completely f****d the skates are, its now looking likely that they could just be starting next season in the Championship with a clean slate. They're going down anyway, -9 points or not. Looks like relatively speaking they'll get out of this ok, what a surprise!

[pedg]

So after all the hype on here about how completely f****d the skates are, its now looking likely that they could just be starting next season in the Championship with a clean slate. They're going down anyway, -9 points or not. Looks like relatively speaking they'll get out of this ok, what a surprise!

 

Depends if they can get out of admin with a CVA, if not they will get up to -20. Not forgetting the results of the court cases. Could easily find themselves on -35 points or so next season.

[Winchester Red]

So after all the hype on here about how completely f****d the skates are, its now looking likely that they could just be starting next season in the Championship with a clean slate. They're going down anyway, -9 points or not. Looks like relatively speaking they'll get out of this ok, what a surprise!

 

How is this the case?

 

If they don't pay the HMRC 100% they wont agree to an CVA and they'll start on -15

 

(Beat me to it again PEDG)

Edited 24 February, 2010 by Winchester Red
Bloody PEDG

[badgerx16]

...

Edited 24 February, 2010 by badgerx16
beaten to it

[Winchester Red]

Interesting decision for the new owners really

 

What's a CC point worth?

 

Could be about £1m per point if they owe HMRC that much and that 15 is also the non-CVA penalty

 

Doesn't it make you want to keep your cheque book in your pocket

[JackFrost]

Yes it does stink a bit, doesn't it. But I suppose the upside is that at least the employees will be protected, either by keeping their jobs or by getting due redundancy pay and holiday pay.

 

IIRC we all discussed pre-pack when we were in trouble, didn't we?

 

In any event, as I posted earlier, pre-pack is a lot more transparent now than it was a year ago, as legislation has been passed by Parliament to make it so. Maybe it won't be quite a straightforward as they might hope.

 

http://www.companyrescue.co.uk/company-rescue/options/Pre-Packaged-Administration.aspx

 

Apologies if already posted.

 

I like how it says "If the directors are worried about trading insolvent"

 

HMRC and the high court know their insolvent

[OldNick]

 

As the winding up petition has been served they have to apply to the court for an admin order, they can't use the out of court routes.

That is interesting.

[tony13579]

"

Pre-pack administration

A pre-pack is the process of selling the assets of a company immediately after it has entered administration. It is most likely that the previous directors or management purchase the assets of the company from the administrator and set up a new company.

 

This process has advantages in that it enables the administrator to realise a greater amount for the assets due to business continuity and the goodwill of the company are preserved. The employees of the company are also transferred to the new company preserving jobs.

 

Pre-packs have attracted criticism because of the appearances it gives to unconnected parties that the company has just continued without its creditors. SIP 16 was introduced in January 2009 to assist Insolvency Practitioners in pre-pack cases.[1] It was designed to make the process more transparent for creditors and to ensure that fair value was obtained for the assets.

 

In November 2009, the Office of Fair Trading announced a [2]study into corporate insolvencies, with particular focus on pre-pack administrations. It will report on whether the insolvency market is operating efficiently, with enough freedom of competition between insolvency practitioners and whether consumers and creditors are being treated as fairly as possible.

 

A recent example of a pre-pack is the sale of the assets of Cobra Beer to Coors immediately after Cobra Beer entered administration. This allowed the brand to continue, save jobs [3] but also leave suppliers out of pocket by an estimated £75 million.

"

So if Pompey were entered into admin, immidatley were pre packed, can they transfer the ground staff but let the playing staff go? shake off all thier debts and the 4 bidders could fight it out to buy/create Pompey 2010 plc at a small sum £2-3 million. rent the stadium from Chandarai and feild a park team and restart 2 leages down.

 

The administraitor would not be liable for any debts due to trading whilst insolvent.

[saintds]

So, seeing as we're unlikely to go up this year but should expect to next, basically we're not going to play them again for ages. I'm fairly gutted about that, though not about them being below us for ages

 

I'm hugely and infuriatingly gutted! I can think of nothing better than absolutely smashing them off the park at the earliest opportunity. It seems that HMRC or the FL will see to it that that isn't possible, assuming we rip Div 3 to bits next season.

[Goalie66]

 

What I would like to see happen versus what will probably happen:

 

1. HMRC object to Admin proceedure on the grounds that SOA proves that they have been trading illegally.

2. PCFC get wound up on Monday

3.Director of Public Prosecutions is brought in to start criminal investigation on PCFC

4. Twitchy, Mandrake and Storrie Teller are all found guilty of Tax evasion and sent to Jail

5. Fratton Park is turned into an Asda but in five years time they discover underground stream that causes major subsidence.

6. As land is unfit for habitation turned into land refill

 

What will probably happen

 

1. PCFC go into admin

2. Pre packaged buyer bails them out comprising a consortium of Gaydamak and Chanrai (under different guises of course )

3 Relegation

4. -30 ponts deduction in Championship because they have no CVA

5.Relegation League 1

6. Administration again

7. Insolvency

8. Asda etc

9. Land Fill etc.

 

IMO of course

Edited 24 February, 2010 by Goalie66