Administration

[benjii]

hmmmm

 

Benji outed as ITK?

 

Lol - no, a mate of a steward told me that

[Amesbury Saint]

I understand the point you are making and if that makes you techincally correct then so be it.

 

But we don't own the Asset - Norwich union do

 

I own a house.

To buy the house I took out a mortgage with a bank (but it could have been Norwich Union).

 

The house is my asset.

The mortgage is a debt secured against the house.

The bank does not own the asset.

 

If the house was purchsed on Hire Purchase then the bank would own the asset until the final payment is made. At which point ownership would transfer to me.

 

 

I dont think anyone is saying SMS was purchased on HP?

[aintforever]

I own a house.

To buy the house I took out a mortgage with a bank (but it could have been Norwich Union).

 

The house is my asset.

The mortgage is a debt secured against the house.

The bank does not own the asset.

 

If the house was purchsed on Hire Purchase then the bank would own the asset until the final payment is made. At which point ownership would transfer to me.

 

 

I dont think anyone is saying SMS was purchased on HP?

 

Regardless of wether it is technically an asset, if we can't afford the repayments the bank will have it back.

[Gemmel]

I own a house.

To buy the house I took out a mortgage with a bank (but it could have been Norwich Union).

 

The house is my asset.

The mortgage is a debt secured against the house.

The bank does not own the asset.

 

If the house was purchsed on Hire Purchase then the bank would own the asset until the final payment is made. At which point ownership would transfer to me.

 

 

I dont think anyone is saying SMS was purchased on HP?

 

I get all of that and completely agree with benji's assesment of transfering assets etc. This is really just semantics, wth the bottom line being if we don't pay Norwich Union, they will own the stadium - nothing that adminstration can do that would help solve that problem, coupled with fact that the debt is probably five times greater than the asset now

[Weston Saint]

Regardless of wether it is technically an asset, if we can't afford the repayments the bank will have it back.

 

They cannot have back what they do not own. I think you will find they have to put us into liquidation and become a creditor. UInless they are a preferred creditor they have to stand in the queue like everyone else.

 

Am I right Benjii or others in the know or can they repossess like any normal mortgage?

[aintforever]

They cannot have back what they do not own. I think you will find they have to put us into liquidation and become a creditor. UInless they are a preferred creditor they have to stand in the queue like everyone else.

 

Am I right Benjii or others in the know or can they repossess like any normal mortgage?

 

By your rationalle we could just go into admin, give them 5p in the pound like all the other creditors, and start up again under new ownership debt free and owning the stadium outright?

 

I don't think so somehow.

[Weston Saint]

By your rationalle we could just go into admin, give them 5p in the pound like all the other creditors, and start up again under new ownership debt free and owning the stadium outright?

 

I don't think so somehow.

No the Administrators would sell SMS to realise money to pay all the creditors

[Mole1]

By your rationalle we could just go into admin, give them 5p in the pound like all the other creditors, and start up again under new ownership debt free and owning the stadium outright?

 

I don't think so somehow.

 

The creditors could sell the land off for housing or whatever. That wouldn't happen though as someone would buy the stadium and a debt free club at a knock down price, but at a price higher than a property developer would pay for the land.

 

This is where the tyre kickers come in.

[bridge too far]

No the Administrators would sell SMS to realise money to pay all the creditors

 

So, Ron, this comes back to my earlier question:

 

If we went into administration, would it be feasible for one group to buy the stadium (via the administrator) and another group buy the football club and rent the stadium from the first group?

 

Or is that just plain silly

[dubai_phil]

No the Administrators would sell SMS to realise money to pay all the creditors

 

hmmmm

 

Now there is an idea. Take the 10 point hit, liquidate, set up a shell company, buy the stadium at 10p in the pound, have a 32,000 seat stadium free of charge, build a long term develop youngsters to trade and play our way back up the league...

 

Except it isn't quite that easy, i'm sure the magic word mortgage means they would be a preferred creditor not in the queue and as it is a charge they can decide who they sell it to - so probably would set up their own shell company and charge us 3mil a year rent and stop us ever having enough money to get back up again.

 

We keyboard warrior analysts see the world in black and white.

 

I wonder if there are more greys around than we think....

 

So do the shareholders only want their money out or have they over time (like in an arranged marriage) sort of developed some feelings for their "life" partner. Could be interesting

 

More to come methinks and it ain't gonna be the way I, or a Steward's mate sees it that's for sure

[Gemmel]

They cannot have back what they do not own. I think you will find they have to put us into liquidation and become a creditor. UInless they are a preferred creditor they have to stand in the queue like everyone else.

 

Am I right Benjii or others in the know or can they repossess like any normal mortgage?

 

Happy to be proved wrong, but i'm 99% sure that's not the case.

 

Same as if you go bankrupt. The sale of your house doesn't get divided amoungst your creditiors (unless there is sufficient equity to pay off the secured debt and leave some more), it goes to the person / people / company that has the debt secured against it, which in this case is Norwich Union.

Unless we have other debts secured against it, which would of had to been approved by Norwich Union, then it's a mute point and why Saints in administration is very different to a lot of clubs.

 

I know nothing about values, so as a pure guess, i would value St Mary's at 4 or 5 million. Which is obviously well short of what we owe

[benjii]

I have no ITK knowledge of any of our financial agreements (and if I did I wouldn't tell anyone anyway!) but it would be 99.99999999% likely that NU will have a fixed legal charge (in common parlance a "mortgage") over the stadium.

 

They are 99.9999% likely to have other sorts of security in place too.

 

If we went into administration they would be entitled to the money from the sale of the stadium (presumably all of it unless some looney wants to pay £25m + for it!). As a secured creditor they would also be first in the queue (behind the administrator's costs) of creditors so they would get the lion's share of everything else as well.

 

The overdraft with Barclays may or may not be secured (probably is). If it is secured then the two banks have probably entered into a separate deed regulating their security position.

 

Apart from a small portion ringfenced for unsecured creditors (capped at £600k I think), the two banks would probably take everything (which probably still isn't that much!).

 

So yes, the issue of who "owns" the stadium is in some respects a moot point.

 

 

Phew.... Sorry to go off on one.

 

It's been a while since we had a good juicy takeover thread with City Code, share wheeling and dealing, due diligence etc... (I think the Asturius Sports one has died a slow and painful death!) - a nice meaty administration thread just isn't quite as exciting!

Edited 22 September, 2008 by benjii