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Pompey Takeover Saga

Fitzhugh Fella

By Fitzhugh Fella,
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SuperMikey

SuperMikey

Posted
Posted
I doubt he'd refuse it if his real debt is actually lower (say about £1 - hypothetically, of course): 20% of £32m would be a rather nice return for £1 of debt.

 

I wouldn't say no to that offer. :cool:

 

Fairly sure he's owed more than £1, but I can see that. Sure he'd probably want the full 100% he's owed, but if P*mpey go down the pan then so does the money he's owed by them, as well as the money owed to other clubs, charities, schools and small businesses.

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Kingsbridge Saint

Kingsbridge Saint

Posted
Posted (edited)

The crux of AA's administration seems to be that having a competitve club will generate the best return for the creditors over the 5 years by securing a return to the Premier League. However, his proposed CVA (with the proposed salary budget) only offers 25p in the event that promotion is secured, whereas the Griffin plan (budgeting for a Championship side)potentially offers 65p. This proves that AA's administration has not been conducted in the best interests of the creditors and is a sham. I would not be surprised if he ends up with another professional misconduct investigation off the back of this. No way is the CVA going to be approved, not a chance now. So unless a deal is struck to exit administration before the start of the season they will be staring at a points deduction. And they will still be potless.

Edited by Kingsbridge Saint
clarity
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Danish Saint

Danish Saint

Posted
Posted
The crux of AA's administration seems to be that having a competitve club will generate the best return for the creditors over the 5 years by securing a return to the Premier League. However, his proposed CVA (with the proposed salary budget) only offers 25p in the event that promotion is secured, whereas the Griffin plan (budgeting for a Championship side)potentially offers 65p. This proves that AA's administration has not been conducted in the best interests of the creditors and is a sham. I would not be surprised if he ends up with another professional misconduct investigation off the back of this. No way is the CVA going to be approved, not a chance now. So unless a deal is struck to exit administration before the start of the season they will be staring at a points deduction. And they will still be potless.

 

....and still not a buyer in sight!

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hutch

hutch

Posted
Posted
Anyone that does not vote against the CVA will be classified as approving the CVA, so in real terms only the people who need to vote are those that object to the CVA.

I doubt if that's right. As I understand it, the CVA must be approved by those in total holding £1 more than 75% of the total unsecured debt. If you don't vote in favour, you don't approve it. I doubt whether it matters whether you are there or not. Failing to attend a meeting wouldn't make your debt disappear. I assume proxy votes are permitted.

 

On the version quoted above, the rule would have to say that the CVA must be rejected by 25%. It doesn't say that. An abstention is effectively a vote against.

 

Here's the relevent bit from the FL rulebook....

 

12.3.3 If any club relegated to the League from The Premier League (in accordance with the Rules of The Premier League) whilst it was a member of The Premier League, took or suffered any such action as set out in Regulation 12.3.1 of these regulations at any time following the end of the season (as defined in the Rules of The Premier League) but before it becomes a member of The League, then that club, upon being accepted as a member of The League in accordance with Regulations 7.4 and 10.1 shall suffer a deduction of 10 points, such points deduction to apply in respect of the following Season such that the Club starts that Season in Division One on minus 10 points.

 

12.3.4 For the avoidance of doubt, where a Club is subject to more than one of the procedures in Regulation 12.3.1 above during a process of compromising its creditors (for example Administration followed by a Company Voluntary Arrangement), the Club shall only be deducted one set of 10 points,

such deduction to apply with effect from the first insolvency procedure.

Pompey went into administration before the end of the season. They took a 9 point hit for that under PL rules. 12.3.3 doesn't apply in this case.

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suewhistle

suewhistle

Posted
Posted

A quick scan shows they share many of our opinions:

 

"The current level of unsecured creditors’ claims are estimated to be in the

region of £83 million, although the Administrators are of the opinion that the

final admitted claims will be significantly less than this total."

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Joensuu

Joensuu

Posted
Posted

 

Wow, a sensible plan. Sell off the high earners, reduce running costs to £5m pa. Then use the rest of the income (c. £6.5m pa to pay off the creditors). Repeat for five years until creditors have received a fair amount.

 

I particularly like the way that, despite not anticipating successive relegations, the plan budgets for it...

 

Few creditors can agree to Android's CVA now. -15 (and the rest) are very likely. Of course, if Chainrai realises he can't get a club on the cheap, he might just pull the plug and start the winding up himself. Looks like the Skates have two choices, a quick death or a slow one.

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dubai_phil

dubai_phil

Posted
Posted
I doubt he'd refuse it if his real debt is actually lower (say about £1 - hypothetically, of course): 20% of £32m would be a rather nice return for £1 of debt.

 

I wouldn't say no to that offer. :cool:

 

That of course assumes that he wants the club's survival to be his way of getting his money back.

 

IF he wants to get ALL of his money back and MUCH more then he just needs the club to vanish so he can develop or sell the land he owns and make truckloads out of Tesco's and his Fitness First Gym

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hutch

hutch

Posted
Posted
You're right Hutch - I couldn't get my brain working at the time!! I wonder if the ruleset I've downloaded is an old set as I can't see anything in there relating to in administration without a cva being produced.

It isn't in there. It's part of something called The Football League Insolvency Policy. Whether that policy is actually written down or not, I don't know. I certainly can't find a copy.

 

But it definately exists, and it's pretty draconian. Ask Leeds, Luton, Bournemouth, Rotherham ....

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NickG

NickG

Posted
Posted
Wow, a sensible plan. Sell off the high earners, reduce running costs to £5m pa. Then use the rest of the income (c. £6.5m pa to pay off the creditors). Repeat for five years until creditors have received a fair amount.

 

I particularly like the way that, despite not anticipating successive relegations, the plan budgets for it...

 

Few creditors can agree to Android's CVA now. -15 (and the rest) are very likely. Of course, if Chainrai realises he can't get a club on the cheap, he might just pull the plug and start the winding up himself. Looks like the Skates have two choices, a quick death or a slow one.

 

why -15?

 

isn't that only if they come out without a CVA? At the moment they have 3 ways of avoiding -15, agree first CVA, agree alternative or stay in administration.

 

Have I got that right?

 

Little knowledge a dangerous thing:confused:

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S-Clarke

S-Clarke

Posted
Posted
why -15?

 

isn't that only if they come out without a CVA? At the moment they have 3 ways of avoiding -15, agree first CVA, agree alternative or stay in administration.

 

Have I got that right?

 

Little knowledge a dangerous thing:confused:

 

pretty sure that's right.

 

Stockport stayed in admin for an entire season and did not incur any more point deductions (you can stay in admin for up to 2 seasons). They could only bring in 1 or 2 loans, but that was the least of their worries.

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rallyboy

rallyboy

Posted
Posted

so they can avoid points penalties by staying in admin, but they would be restricted on bringing in new players?

That works for me, it would be the penalty that just keeps on taking away!

 

I propose a season staying in admin with a depleted squad locked in a hopeless relegation battle and then no CVA next summer.

Start Lg One with a points penalty, -15 for the CVA and -12 for the irregularities which will have been proven by then - and Lge Two will be calling.

 

At some point on this potential journey the few will have to decide when the adventure was no longer worth the longterm damage.

Currently it was worth it, a cup win over one relegation.

 

But I reckon by maybe Christmas 2011, that gamble of the club's future against a 1-0 win over a bankrupt midtable championship side will look like an act of madness, and anyone who stubbornly insists that it was still worth it will be sectioned.

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EastleighSoulBoy

EastleighSoulBoy

Posted
Posted

 

Phew! That took some reading. Some parts I understood, specifically their note that AA (not Griffins wording, they were more circumspect) does not seem to have discharged his legal duties to the creditors in an appropriate manner. Griffins sums seem to stack up, despite HY/AA not being forthcoming with requested information.

 

AA seems to have 'dressed up' their predicament quite a lot and, in their short term of remit, Griffins have exposed that.

 

I sincerely hope that all the creditors get to read this. Griffins have offered them their services. They have not cut PCFC loose without a paddle yet they have improved the dividend, immensely. Even Gaydamak should realise that 65% (possibly as high as 99%!) of £30m is better than 20%!

 

This work from Griffins must surely be the straw that broke the camel's back. Creditors would be ill advised to accept anything less than what Griffins propose.

 

PCFC should not be allowed to wriggle out of this one.

 

Griffins work seems a fair summation of the situation.

 

I suggest our resident Skates take a read. Your club will not die, punished heavily yes, but the club has been there before and can rise. If AA's now seemingly far fetched proposals are adopted I think that PCFC (or it's reincarnation) will find itself here again within a few years. If so they will not have the PL to deal with but an altogether stronger taskmaster in the guise of the FL (which by then will have tightened even further the rules and punishments).

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Gemmel

Gemmel

Posted
Posted (edited)
A quick scan of the link Nick has posted suggests to me that this report places Gaydamak very neatly over a barrel:

 

Either drop your claim or risk being examined for running up huge debts and thereby trading insolvently.

 

That's pretty much it in a nutshell.

 

I think a disfunctional 11 year old could lead the prosecution against gaydamak for trading insolvently and win.

 

He could of course hot foot it to Russia with his Dad, but he still wouldn't get his hands on the money, so he might as well clear his name.......albeit for a cost of 32 million.

 

But it doesnt stop there, the document clealy points to other Directors and Shadow directors, who would also be liable and I have a sneaky suspicion, that does NOT include, Tanya Robins, who seems to have a new best friend in HMRC.

 

The hands have been shown, aa went with a bluff, whilst HMRC were holding the Royal Flush, and gave them enough rope to hang themselves.

 

Ironically it actually saves pompey, although the penalty points and level of freefall that is bestowed on them remains to be seen.

 

aa must be reeling - All the time he was signing autographs, another administrator was working in the background.

 

aa says 20p in the pound and look how clever he is, the others say anything from 65p - to 99p and look how stupid he is.

 

One lawyer lost his job when he got involved with pompey. How many days until it's two..............

Edited by Gemmel
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Wes Tender

Wes Tender

Posted
Posted

I sincerely hope that all the creditors get to read this. Griffins have offered them their services. They have not cut PCFC loose without a paddle yet they have improved the dividend, immensely. Even Gaydamak should realise that 65% (possibly as high as 99%!) of £30m is better than 20%!

 

 

But surely the essence of what Griffins is proposing is that Gaydamak gets nothing and those extra monies be transferred towards payment of the unsecured creditors, thus raising their payment from the 20p to 65p in the pound. That is how I read it. Effectively they propose to put a gun against Gaydamak's head by threatening to prove that he was trading illegally whilst insolvent unless he withdraws his claims to money owed to him.

 

Bridge too far and Gemmel take the same view as I do in their posts. Have we somehow got the wrong end of the stick?

 

Where you say that you hope that the other creditors know of Griffins' proposals, there is no reason that I can see why Griffins should not have sent a copy of their document or an internet link to it, to all of the creditors. After all, the list of creditors is available in the public domain.

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EastleighSoulBoy

EastleighSoulBoy

Posted
Posted
But surely the essence of what Griffins is proposing is that Gaydamak gets nothing and those extra monies be transferred towards payment of the unsecured creditors, thus raising their payment from the 20p to 65p in the pound. That is how I read it. Effectively they propose to put a gun against Gaydamak's head by threatening to prove that he was trading illegally whilst insolvent unless he withdraws his claims to money owed to him.

 

Bridge too far and Gemmel take the same view as I do in their posts. Have we somehow got the wrong end of the stick?

 

Where you say that you hope that the other creditors know of Griffins' proposals, there is no reason that I can see why Griffins should not have sent a copy of their document or an internet link to it, to all of the creditors. After all, the list of creditors is available in the public domain.

 

Having reread that part I have to agree with you. More credit to HMRC in appointing Griffins and probably giving them the ammunition.

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Guest Dark Sotonic Mills

Guest Dark Sotonic Mills

Posted
Posted
But surely the essence of what Griffins is proposing is that Gaydamak gets nothing and those extra monies be transferred towards payment of the unsecured creditors, thus raising their payment from the 20p to 65p in the pound. That is how I read it. Effectively they propose to put a gun against Gaydamak's head by threatening to prove that he was trading illegally whilst insolvent unless he withdraws his claims to money owed to him.

 

Bridge too far and Gemmel take the same view as I do in their posts. Have we somehow got the wrong end of the stick?

 

Where you say that you hope that the other creditors know of Griffins' proposals, there is no reason that I can see why Griffins should not have sent a copy of their document or an internet link to it, to all of the creditors. After all, the list of creditors is available in the public domain.

 

Precisely what they are saying. Give up your claim to £32m and in doing so save the club and creditors or keep as you are and risk action to recover up to £58m in losses for trading insolvently.

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fromdayone

fromdayone

Posted
Posted
But surely the essence of what Griffins is proposing is that Gaydamak gets nothing and those extra monies be transferred towards payment of the unsecured creditors, thus raising their payment from the 20p to 65p in the pound. That is how I read it. Effectively they propose to put a gun against Gaydamak's head by threatening to prove that he was trading illegally whilst insolvent unless he withdraws his claims to money owed to him.

 

Bridge too far and Gemmel take the same view as I do in their posts. Have we somehow got the wrong end of the stick?

 

Where you say that you hope that the other creditors know of Griffins' proposals, there is no reason that I can see why Griffins should not have sent a copy of their document or an internet link to it, to all of the creditors. After all, the list of creditors is available in the public domain.

 

 

I think it reads that Gaydamak would receive 65p in the pound along with the other unsecured creditors due to the fact that ALL the parachute money would be used to repay their debt. But IF Gaydamak agreed to drop his 32m claim then the remaining unsecured creditors would be boosted by that amount and receive 99p in the pound.

 

He would obviously loose his money but would not be under threat of investigation/ detainment at HM's pleasure.

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Joensuu

Joensuu

Posted
Posted
why -15?

 

isn't that only if they come out without a CVA? At the moment they have 3 ways of avoiding -15, agree first CVA, agree alternative or stay in administration.

 

Have I got that right?

 

Little knowledge a dangerous thing:confused:

 

You are right that there three ways to avoid the -15. However, the point I was making is that it now seems very unlikely that the current CVA proposal will be agreed.

 

They could of course try to get a different agreement passed, but the more favorable it is to the creditors, the less attractive it will be to a prospective buyer. Chainrai (to date the only plausible new owner), is likely to be put off by the Griffin proposal, as there would be little chance of him getting his hands on the parachutes nor league money. It would seem this option is possible, but on a tight timescale. I can't see how HMRC can be satisfied while still leaving an attractive prospect for any new owner to buy into.

 

Finally, yes, they do have the option of prolonging things even further, by delaying the inevitable. As already mentioned, the clock is ticking on this delay, Android only has 21 months left. As far as I can see all this would mean is that any point deductions are delayed, in the meantime Android can try to offload the higher earners, and replace them with, err, that's right, only the youth team and reserves can be used to replace first team players. I'd love for Android the go down this route, sell the players, play the kids, relegate the club, and then find point deductions waiting at the end of the journey.

 

Don't forget the -15 has previously been 'awarded' to clubs who have emerged from administration with a CVA. If the league want to deduct points, they will.

 

Quite simply, while not certain, it now looks more likely than not that the club with start next season on at least -15.

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hutch

hutch

Posted
Posted
But surely the essence of what Griffins is proposing is that Gaydamak gets nothing and those extra monies be transferred towards payment of the unsecured creditors, thus raising their payment from the 20p to 65p in the pound. That is how I read it. Effectively they propose to put a gun against Gaydamak's head by threatening to prove that he was trading illegally whilst insolvent unless he withdraws his claims to money owed to him.

Not as I read it. Giving (rightly) the lions share of the parachutes and TV income to the creditors rather than the club, thereby reducing the clubs available income to pay stupid wages they can't afford, raises the dividend to around 65p. If Gaydamak walks away the 65p becomes 99p.

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bridge too far

bridge too far

Posted
Posted
Not as I read it. Giving (rightly) the lions share of the parachutes and TV income to the creditors rather than the club, thereby reducing the clubs available income to pay stupid wages they can't afford, raises the dividend to around 65p. If Gaydamak walks away the 65p becomes 99p.

 

But if he doesn't, there will be questions asked about the disappearance (allegedly) of £85m. And if this disappearance means the company was trading illegally, whilst insolvent, he will be brought to book.

 

Lose / lose for Gaydamak methinks :)

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Joensuu

Joensuu

Posted
Posted

Wonder whether Gaydamak will retain ownership of the land surrounding Fratton:

1) if he opts to walk away from the £34m

2) if he maintains his claim to be a creditor and risks HRMC prosecution.

 

My guess is that with few assets in the UK, the land surrounding Fratton might be the only part of Gaydamak's assets which a UK court might be easily able to impound.

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Wes Tender

Wes Tender

Posted
Posted
Not as I read it. Giving (rightly) the lions share of the parachutes and TV income to the creditors rather than the club, thereby reducing the clubs available income to pay stupid wages they can't afford, raises the dividend to around 65p. If Gaydamak walks away the 65p becomes 99p.

 

Fair enough. But surely this proposal is reliant anyway on the HMRC winning its case in court to overturn the priority given to footballing creditors. As I understand it, the current situation regarding the parachute payments was that it would be ringfenced to go to football creditors and that the residue of any monies remaining was the 20% for unsecured creditors.

 

The Android had wrung his hands theatrically and cried crocodile tears at the unjust implications of this rule, while secretly rubbing his hands with glee that Chainrai who had appointed him would benefit at the expense of the taxman and local businesses and charities.

 

Now that this other rival administrators has come up with these proposals, couldn't the Android agree with them that these figures are workable, but only in the event of a change in the ruling on the football debt priority?

 

Actually, the Android is totally snookered by the intervention of Griffins, isn't he? There is no way that most of the creditors will take 20p/25p in the pound over 5 years rather than wait to see whether the football debt priority is overturned and they get 65p to 99p in the pound.

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Saint_Ash

Saint_Ash

Posted
Posted

So this Griffin proposal is just showing what the offer to the creditors COULD be just to stop the creditors voting for the Android offer? As Griffin aren't the administrators for the club then these are just figures that they're saying Android should be working out? He'll obviously come out and say they're unworkable and maybe up his figure to 30p in the £ or something?

 

Anyway, can the Android and his crooks be thrown out as administrators and Griffin be installed? Who has the authority?

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stevegrant

stevegrant

Posted
Posted
So this Griffin proposal is just showing what the offer to the creditors COULD be just to stop the creditors voting for the Android offer? As Griffin aren't the administrators for the club then these are just figures that they're saying Android should be working out? He'll obviously come out and say they're unworkable and maybe up his figure to 30p in the £ or something?

 

Anyway, can the Android and his crooks be thrown out as administrators and Griffin be installed? Who has the authority?

I think HMRC reserved the right to challenge his appointment again in court.

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hutch

hutch

Posted
Posted
Fair enough. But surely this proposal is reliant anyway on the HMRC winning its case in court to overturn the priority given to footballing creditors. As I understand it, the current situation regarding the parachute payments was that it would be ringfenced to go to football creditors and that the residue of any monies remaining was the 20% for unsecured creditors.

No, it isn't. Both Griffin & HY proposals factor in paying off the football creditors in full.

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Wes Tender

Wes Tender

Posted
Posted
So this Griffin proposal is just showing what the offer to the creditors COULD be just to stop the creditors voting for the Android offer? As Griffin aren't the administrators for the club then these are just figures that they're saying Android should be working out? He'll obviously come out and say they're unworkable and maybe up his figure to 30p in the £ or something?

 

Anyway, can the Android and his crooks be thrown out as administrators and Griffin be installed? Who has the authority?

 

If he could up his figure to 30p in the pound, the question would beg to be asked why he didn't do that to start with. After all, his primary duty is to get the maximum for the creditors, although many will argue that he isn't exactly the most ethical administrator about. That would be an increase of 50% over the 20p, therefore substantial, but still less than half of the Griffin figure, which I take it relies on the football creditors priority rule being overturned. If it were overturned, presumably the Android could also match those figures himself, but naturally he didn't wish to rock the boat and suggest that the unsecured creditors wait until the court case was decided.

 

In any event, it must be crystal clear to the Android that since the developments of the past couple of days, he is now on a hiding to nothing and that there is no way that the CVA he proposes will be accepted by 75% of the creditors. Furthermore, it seems likely that if HMRC take up their option to challenge Andronikou as administrator, they will raise questions over the way he has acted and also ask how the statement of financial affairs debt more than doubled since they took the Skates to court under the winding-up order.

 

If Andronikou is removed as administrator on grounds of his professional shortcomings, would he still be paid or receive a much reduced fee? He might also receive further admonishments from the profession, or even better, debarred from acting as an administator in future.

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Wes Tender

Wes Tender

Posted
Posted
No, it isn't. Both Griffin & HY proposals factor in paying off the football creditors in full.

 

I'll have to read that again in more detail obviously. As it stands, I don't see where all this money is coming from unless the debt is in fact much less than the Android makes out. As it stands, surely the parachute payments are earmarked to the footballing creditors and Gaydamak only increases the payment to 99p instead of 65% if he withdraws his debt.

 

Where is the money allowing Griffin to offer 65p when the Android can only offer 20p?

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benjii

benjii

Posted
Posted

For those who can't be bothered to read the Griffin document, these two paragraphs sum it up in a nutshell:

 

The Administrators have sought to strike a balance between the company and its

creditors. We think that the Administrators have not placed enough emphasis on

the position of creditors and the club will retain too much of the benefit of its recent

expenditure on the team which will be available cheaply to any future owner.

 

The proposals seek to allow the club to spend large sums on getting back to the FA

Premier League but the creditors will not benefit substantially from this expenditure.

Funnily enough, it's what a lot of us have been saying!

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benjii

benjii

Posted
Posted
I'll have to read that again in more detail obviously. As it stands, I don't see where all this money is coming from unless the debt is in fact much less than the Android makes out. As it stands, surely the parachute payments are earmarked to the footballing creditors and Gaydamak only increases the payment to 99p instead of 65% if he withdraws his debt.

 

Where is the money allowing Griffin to offer 65p when the Android can only offer 20p?

 

Because AA wants to run PFC as one of the biggest spending Championship clubs. Griffin have pointed out that this is absurd.

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hutch

hutch

Posted
Posted

In a nutshell, in order to fulfill his duty to get the best possible deal for the creditors, AA has proposed to give them a pittance, and let the club keep the bulk of the parachute payments to pay inflated wages (in nPC terms) in future seasons to have a better chance of getting back to the PL. If they succeed, their income goes back up by around £60m p.a. of which AA has promised to give £4m to the creditors as a "thank you" bonus, and Chainrai gets to keep the rest.

 

As an alternative, Griffin has proposed that the club should in future operate within its means WITHOUT the help of the parachute money. i.e. it uses whatever it collects in gate money, merchandising etc to operate the club, pay wages and buy players. They're going to find it hard to understand that one down there. The parachute payments (and SKY money) are used to pay off the football creditors and the rest goes to the unsecured creditors. Income from sale of current players goes to the creditors. Income from sale of any new players goes to the club. If Gaydamak persists with his claim, they get around ⅔ of what they are owed, and Gaydamak probably gets his day in Court. If he drops it they get paid in full.

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