In laymans terms, what will administration mean?

[Frank's cousin]

How does it work then if we go into admin and two groups want to buy the club?

 

Is it that the shares are worth zero and the administrator has to accept the best deal for the creditors?

 

Need an answer from an 'administrator; really, I woudl guess it would be their duty to accept the deal that provides creditors with the greatest chance of getting their money back.

 

In football though we also need to bare in mind that unless all fottballing debts are paid in full (eg. Final paymnets on transfers and loan fees, player wages etc) then you suffer a further substantial points deduction.

[aintforever]

Need an answer from an 'administrator; really, I woudl guess it would be their duty to accept the deal that provides creditors with the greatest chance of getting their money back.

 

In football though we also need to bare in mind that unless all fottballing debts are paid in full (eg. Final paymnets on transfers and loan fees, player wages etc) then you suffer a further substantial points deduction.

 

I think it's worse than that, you need a CVA otherwise it's -17 on top of the -10.

[Clapham Saint]

How does it work then if we go into admin and two groups want to buy the club?

 

Is it that the shares are worth zero and the administrator has to accept the best deal for the creditors?

 

There isn't a set bidding method.

 

The administrator will have a statutory duty to realise as much as possible for the creditors.

 

He/she can go about raising this however he/she thinks best. Initial enquires would be made with regard to any interested parties.

 

In my experience. Once I have an idea who might be interested and hopefully had had some contact from them I would make a judgement on how to get the highest bids from them.

 

This might be sealed bids or you could try to start a bidding war or any other meathod that you can dream up.

 

I would then need to take into account how much they are offering and what it is that they are actually proposing to buy.

 

For example if "Buyer 1" offered (numbers are obviously made up for ease) £3m for the club but didn't want to buy the stadium but "Buyer 2" wants to buy the club for £2m and is also prepared to buy the stadium for a further £3m (total £5m) then the administrator would have to decide how much he might be able to sell the stadium for sparately.

 

If the stadium could only be sold to a developer (or whoever) for £1m then the £5m combined deal to "buyer 2" is the best deal.

 

If the stadium could be sold to a developer for £3m then the most money is acheived from splitting up the club and the stadium and selling them separately. £3m + £3m = £6m is the better option for the creditors and so the administrator would be obligated to take this option.

[aintforever]

There isn't a set bidding method.

 

The administrator will have a statutory duty to realise as much as possible for the creditors.

 

He/she can go about raising this however he/she thinks best. Initial enquires would be made with regard to any interested parties.

 

In my experience. Once I have an idea who might be interested and hopefully had had some contact from them I would make a judgement on how to get the highest bids from them.

 

This might be sealed bids or you could try to start a bidding war or any other meathod that you can dream up.

 

I would then need to take into account how much they are offering and what it is that they are actually proposing to buy.

 

For example if "Buyer 1" offered (numbers are obviously made up for ease) £3m for the club but didn't want to buy the stadium but "Buyer 2" wants to buy the club for £2m and is also prepared to buy the stadium for a further £3m (total £5m) then the administrator would have to decide how much he might be able to sell the stadium for sparately.

 

If the stadium could only be sold to a developer (or whoever) for £1m then the £5m combined deal to "buyer 2" is the best deal.

 

If the stadium could be sold to a developer for £3m then the most money is acheived from splitting up the club and the stadium and selling them separately. £3m + £3m = £6m is the better option for the creditors and so the administrator would be obligated to take this option.

 

So what happens to the Stadium debt?

 

Is there a chance that some of the debt could be blown off or will the full amount owed have to be paid off?

 

Obviously with a mortgage the house price usually covers what is owed but SMS is not worth near the £25mill or whatever.

[bridge too far]

Although it's a commercial site, this link gives some useful information:

 

http://www.businessresolve.co.uk/questions.htm

 

This may have been said before but if the company has a CVA, the Directors retain control. If it goes into administration, the directors have no control over the running of the business whilst it's in liquidation but still have a fiduciary duty.

 

I'm sorry if this has already been explained. I hadn't seen the difference spelt out quite so clearly.

[Frank's cousin]

I think it's worse than that, you need a CVA otherwise it's -17 on top of the -10.

 

BUt from What you can read into the accounts we dont need to worry so much about that as awe have no footballing debt, and its only barclays and aviva we need to satisfy if they dont agree we will be liquidated....

[Rational Rich]

So what happens to the Stadium debt?

 

Is there a chance that some of the debt could be blown off or will the full amount owed have to be paid off?

 

Obviously with a mortgage the house price usually covers what is owed but SMS is not worth near the £25mill or whatever.

 

Sorry, just realised not a full member so had used up my post count. Am now a full member.

 

The administrator would have to liaise with Norwich Union if it (as reported on here) has a mortgage over the stadium. Not exactly sure what the security position is, as its also been reported that the security is over gate receipts.

[Rational Rich]

Thanks Rich for the clarification. think its important that folf undersatnd teh REAL implications of this.

 

I do have some questions though that you might be able to help with.

 

My understanding is that the baord are currently doing what they believe will stave of relegation, they have tried to cut operating costs and overhead to a level that is within the current revenue stream.... if this is not teh acse and we are still incurring further monthly losses (and lower gate receipts DO impact on this) then it cant belong before they are legally forced to call in teh administrators as we woudl eb in effect be trading whilst insolvement.

 

So in come the administrators - we have been told that teh club is at least making provision for VAT and PAYE Corporation tax etc (from teh last audited accounts statemnet to teh LSE) so in theory they would be paid up in full. Assetts such as players would be sold + Jacksopns farm etc to then being to clear the overdraft with Barclays and other creditors... q. Do we actually have huge unpaid bills? As far as I can tell from the previous accounts out two greatest liabilties are the stadium loan with Aviva and teh overdraft with Barclays, an overdraft we have because we DO pay our employees and our suppliers? So selling assests to clear teh overdraft is one thing, but what happens to the AVIVA laon? the land as it is not worth the value of the loan so there its not a case of selling teh stadioum and leasing it back from someone else, that usually only happens where there are no loans against the ground. So Aviva really want us to be able to continue to pay the loan off - they do not want a useless stadium or sell the land for 25p in the pound of the laon - if that.For them it would thus be in their best interests that we continue to trade paying the 1.7 mil or so a year in repayments whatever division we are in?

 

I think its obvious that we have not cashed in assets such as Jacksons farm because of a) current land prices/property crunch and b) Its worth one heck of a lot more is rezoned for housing - long term asset managemnet of the wilde kind....

 

How do you think administrators would deal with the stadium situation? If we had already paid it off, then it would be sold for 4mil worth of land to help pay creditors and in that case not a bad thing if someone could be found who leased it abck to us for 30 years or so, but a knightmare if someone who simply wanted to stick a giant tescos on it.... thoughts?

 

 

All creditors would be paid off at x pence in the pound. Secured creditors (I would imagine Barclays and NU according to posts on this forum) would get first bite at the funds realised from the sale of the assets they have security over, then the rest goes into the pot.

 

It is for the administrator to judge how best to dispose of the assets for maximum realisations. It might be that if the club can keep going, the stadium could be sold to a property company to rent it back to the club or for redevelopment (though that wouldn't be particularly attractive in the current climate, especially in the part of town where SMS is).

 

The bank/NU would have to consider commercial and reputational issues from knocking down a football ground to build something else (i.e. bad PR, boycotts from football supporters) but ultimately that would be a pounds, shillings and pence decision.

 

Once you are in administration, all bets are off. At least at the moment we have shareholders with diminishing investments to focus their minds running the club (and the only way they will get any money back is for the club to stay solvent and ultimately get back into the prem). the administrators would have no such long term benefits and will deal with getting cash in as soon as possible in whichever way is most efficient.

[Ken Tone]

Snipped>>> How do you think administrators would deal with the stadium situation? If we had already paid it off' date=' then it would be sold for 4mil worth of land to help pay creditors and in that case not a bad thing if someone could be found who leased it abck to us for 30 years or so, but a knightmare if someone who simply wanted to stick a giant tescos on it.... thoughts?[/quote']

 

I refer the honourable gentleman to the answer I gave earlier re the administrator

also snipped >> .........and sell the ground too if he can get a buyer who will guarantee *for the short term only* to lease it back. No guarantee not to evict the club and use for housing in a few years time once the recession is over.

 

Anyone want to go through what Brighton have been through?

 

Some skint clubs have been lucky -- their local council have bought their ground, and rented it back to them. Presumably this suits both sides, as the club gets cash to bail itself out of trouble when no one would lend to it, whilst the council in effect invests its capital for rent thay may be better than it could get in interest by simply putting it in the bank....as long as the club then continues to trade

 

However .. a whopping big however, can anyone see Southampton Council or Hampshire CC having the liquidity to do this in the current climate? Or the nerve to be seen to be taking this risk?

 

Maybe one of the premiership rugby clubs might want it at a bargain price? Don't London Irish play at Reading for example? If so they might let us rent it back on matchdays as the junior partner.

 

May I reiterate btw that we were given clear undertakings last year that if the club went into administration season tickets were safe, and would continue to get us into games. It is only in the doomsday scenario of the club actually ceasing to exist that we would become creditors in the queue with the other creditors.

 

K.

[Frank's cousin]

Sorry, just realised not a full member so had used up my post count. Am now a full member.

 

The administrator would have to liaise with Norwich Union if it (as reported on here) has a mortgage over the stadium. Not exactly sure what the security position is, as its also been reported that the security is over gate receipts.

 

Is it right to assume that as the sms loan is like a mortage so Aviva will ahve first claim against the stadium irespective of who else is owed?

[The Rover]

Sorry, just realised not a full member so had used up my post count. Am now a full member.

 

The administrator would have to liaise with Norwich Union if it (as reported on here) has a mortgage over the stadium. Not exactly sure what the security position is, as its also been reported that the security is over gate receipts.

 

 

Rational Rich - can you comment on my Post #41 above please?

 

Thanks for your earlier clarification about Voluntary Agreements (I had got the wrong end of a stick).

 

As I understand it from the link below, Saints Directors could propose a CVA and thereby restructure the debts without going into Administration providing 75% of the creditors by value agree.

[Frank's cousin]

Is it right to assume that as the sms loan is like a mortage so Aviva will ahve first claim against the stadium irespective of who else is owed?

 

Sorry Rich did not see your answer to this already... thanks by the way.

[Frank's cousin]

Rational Rich - can you comment on my Post #41 above please?

 

Thanks for your earlier clarification about Voluntary Agreements (I had got the wrong end of a stick).

 

As I understand it from the link below, Saints Directors could propose a CVA and thereby restructure the debts without going into Administration providing 75% of the creditors by value agree.

 

I suspect though that we really only owe Aviva and Barclays, so can you see them accepting a CVA?

[Frank's cousin]

 

Once you are in administration, all bets are off. At least at the moment we have shareholders with diminishing investments to focus their minds running the club (and the only way they will get any money back is for the club to stay solvent and ultimately get back into the prem). the administrators would have no such long term benefits and will deal with getting cash in as soon as possible in whichever way is most efficient.

 

Its what I have been saying for some time, but be careful - this will be considered 'lowe-luvie' speak from some quarters ;-)

[Window Cleaner]

I suspect though that we really only owe Aviva and Barclays' date=' so can you see them accepting a CVA?[/quote']

 

I'm not sure that even Barclays is a major problem,

last year's accounts show an overdraft of 6.62 million (against a limit of 4.5 million from what I'M told). So we were 2.12 million out of trust, hence Barclays ask the man they really trust (:smt104:smt104 and his co-owner) to step back in a sort it out.I don't think Barclay's had much time for the usurpers but then I'll be pilloried for that suggestion.

It would seem that our only current problem is a wee bit too much on the OD and meeting our liabilities on an everyday basis.If you looks at the Leeds accounts prior to their demise they owed players a lot of money, meaning everybody wasn't getting their full whack when it was due.I doubt that we have that problem but it could be that we till owe past players (or managers) money.

[SP Saint]

I suspect though that we really only owe Aviva and Barclays' date=' so can you see them accepting a CVA?[/quote']

 

It sounds feasible to me.

 

If the club goes down, Aviva will be left with an empty rusting shell to try and sell or alternatively rent out to Saints (2009) Ltd. Do they really want to be football landlords? I reckon they could well agree to settle.

 

Equally Barclays may agree to a rescheduling of debts if the alternative is a very low return via administration.

[Rational Rich]

Its what I have been saying for some time' date=' but be careful - this will be considered 'lowe-luvie' speak from some quarters ;-)[/quote']

 

To clarify, I've never been particularly pro or anti anyone in the board room, find the board room politics boring, all I want is for competant people to run the club in a way that results in success on the pitch, whether that is Lowe, Wilde, Crouch, Salz, the barrister bloke, Mark Dennis, MLT, or anyone else (other than Mandaric!). Only time will tell whether we have that at the moment (and there's not much of a positive spin that can be put on the current situation no matter whose side you're on)

[Frank's cousin]

I'm not sure that even Barclays is a major problem,

last year's accounts show an overdraft of 6.62 million (against a limit of 4.5 million from what I'M told). So we were 2.12 million out of trust, hence Barclays ask the man they really trust (:smt104:smt104 and his co-owner) to step back in a sort it out.I don't think Barclay's had much time for the usurpers but then I'll be pilloried for that suggestion.

It would seem that our only current problem is a wee bit too much on the OD and meeting our liabilities on an everyday basis.If you looks at the Leeds accounts prior to their demise they owed players a lot of money, meaning everybody wasn't getting their full whack when it was due.I doubt that we have that problem but it could be that we till owe past players (or managers) money.

 

Have we at the very least in that time reduced the rate of losses, or are we still losing money? because that seems to be the problem, because in effect there comes atime when we have no choice if trading whilst insolvement...?

[Frank's cousin]

To clarify, I've never been particularly pro or anti anyone in the board room, find the board room politics boring, all I want is for competant people to run the club in a way that results in success on the pitch, whether that is Lowe, Wilde, Crouch, Salz, the barrister bloke, Mark Dennis, MLT, or anyone else (other than Mandaric!). Only time will tell whether we have that at the moment (and there's not much of a positive spin that can be put on the current situation no matter whose side you're on)

 

Sorry, I know that you know that, but its dont stop some ignoring it...;-)

[Window Cleaner]

Have we at the very least in that time reduced the rate of losses' date=' or are we still losing money? because that seems to be the problem, because in effect there comes atime when we have no choice if trading whilst insolvement...?[/quote']

 

No we've definitely reduced our outgoings, we've had a few bits and bobs coming in,like the Davies transfers(probabled stage payments though, might have even still owed Boro on him though). WE got a knock on from Crouch,the money from UEFA cos Saga and Skacel played in their respective national sides.Probably still a bit of trail payments as well,perhaps from Jones and Baird,

those would be showed up as "trade debtors" in the accounts anyway.

 

I suppose we'll get the half year account in about a month or so and I would expect the salary mass to be really hammered down, probably as low as 3.5 million for the half year. The rest depends on how much we've reduced ancillary cost by, don't forget in theory we could not even afford to

pay a single footballer player last year without posting a loss. All our income was spent before we paid a single player a single pound.That's what the current board are addressing (well I hope so anyway).More of our revenue has to be channelled into footballers kicking footballs and less on ancillary crap.Just like the good old days, football clubs played football, they did not run boutiques, sell street wear,curtains and garden gnomes.

[bridge too far]

No we've definitely reduced our outgoings, we've had a few bits and bobs coming in,like the Davies transfers(probabled stage payments though, might have even still owed Boro on him though). WE got a knock on from Crouch,the money from UEFA cos Saga and Skacel played in their respective national sides.Probably still a bit of trail payments as well,perhaps from Jones and Baird,

those would be showed up as "trade debtors" in the accounts anyway.

 

I suppose we'll get the half year account in about a month or so and I would expect the salary mass to be really hammered down, probably as low as 3.5 million for the half year. The rest depends on how much we've reduced ancillary cost by, don't forget in theory we could not even afford to

pay a single footballer player last year without posting a loss. All our income was spent before we paid a single player a single pound.That's what the current board are addressing (well I hope so anyway).More of our revenue has to be channelled into footballers kicking footballs and less on ancillary crap.Just like the good old days, football clubs played football, they did not run boutiques, sell street wear,curtains and garden gnomes.

 

What - like half the population of Holland being employed as our coaching staff?

[Ken Tone]

BUt from What you can read into the accounts we dont need to worry so much about that as awe have no footballing debt' date=' and its only barclays and aviva we need to satisfy if they dont agree we will be liquidated....[/quote']

 

Are you really sure we have no footballing debts? Genuine question - I do not know --

but .....

 

We must be very unusual if so:

 

no outstanding payments on any transfer ?

 

no money owed to players in wages or signing on/off fees?

 

no money owed to any agents, dodgy or otherwise?

 

Virtually every modern day transfer is done in staged payments. No one actually pays £x million up front any more. We may well be owed a fair bit of money by other clubs too, but the administrator or new owners (unless filthy rich and using own money), may not be able to get hold of all that money in time to pay off our own debts and ensure we owe no football debts by the required date.

 

I had a go on this forum the other day about 'doomsayers' so I'm the last person to want to make things seem worse than they are. But my hope is that we avoid administration. I do not see administration as a preferred solution as some seem to do.

 

If we do go into administration there is still a good chance that the club may survive and even *eventually* grow stronger. It is not necessarily the end of Southampton FC as we know it. But there's also just as good a chance that we would end up as a shadow of even what we are now, never mind what we were in the glory days. I don't relish the thought of us becoming another Brighton, let alone a Bradford Park Avenue or Accrington Stanley.

 

K.

[Frank's cousin]

Are you really sure we have no footballing debts? Genuine question - I do not know --

but .....

 

We must be very unusual if so:

 

no outstanding payments on any transfer ?

 

no money owed to players in wages or signing on/off fees?

 

no money owed to any agents, dodgy or otherwise?

 

Virtually every modern day transfer is done in staged payments. No one actually pays £x million up front any more. We may well be owed a fair bit of money by other clubs too, but the administrator or new owners (unless filthy rich and using own money), may not be able to get hold of all that money in time to pay off our own debts and ensure we owe no football debts by the required date.

 

I had a go on this forum the other day about 'doomsayers' so I'm the last person to want to make things seem worse than they are. But my hope is that we avoid administration. I do not see administration as a preferred solution as some seem to do.

 

If we do go into administration there is still a good chance that the club may survive and even *eventually* grow stronger. It is not necessarily the end of Southampton FC as we know it. But there's also just as good a chance that we would end up as a shadow of even what we are now, never mind what we were in the glory days. I don't relish the thought of us becoming another Brighton, let alone a Bradford Park Avenue or Accrington Stanley.

 

K.

 

Did look like we were clear of that as of last audited accounts - Lowe is known for his wanting to keep aged debt to a minimum...

[Chez]

NoThe rest depends on how much we've reduced ancillary cost by, don't forget in theory we could not even afford to

pay a single footballer player last year without posting a loss. All our income was spent before we paid a single player a single pound.

 

no one ever explained to me where all that money goes. The mortgage is £2m, running the academy was £1m (but including staffing costs I assume), where does the rest go on insurance, electric/gas bills, lawyers costs etc?

[Frank's cousin]

no one ever explained to me where all that money goes. The mortgage is £2m, running the academy was £1m (but including staffing costs I assume), where does the rest go on insurance, electric/gas bills, lawyers costs etc?

 

wages

utilities

insurance

police/service costs

tax

vat

paye

suppliers

[Clapham Saint]

All creditors would be paid off at x pence in the pound. Secured creditors (I would imagine Barclays and NU according to posts on this forum) would get first bite at the funds realised from the sale of the assets they have security over, then the rest goes into the pot.

 

It is for the administrator to judge how best to dispose of the assets for maximum realisations. It might be that if the club can keep going, the stadium could be sold to a property company to rent it back to the club or for redevelopment (though that wouldn't be particularly attractive in the current climate, especially in the part of town where SMS is).

 

The bank/NU would have to consider commercial and reputational issues from knocking down a football ground to build something else (i.e. bad PR, boycotts from football supporters) but ultimately that would be a pounds, shillings and pence decision.

 

Once you are in administration, all bets are off. At least at the moment we have shareholders with diminishing investments to focus their minds running the club (and the only way they will get any money back is for the club to stay solvent and ultimately get back into the prem). the administrators would have no such long term benefits and will deal with getting cash in as soon as possible in whichever way is most efficient.

 

 

As Rich has said above, if we go into administration all bets are off.

 

In laymans terms:

 

Entering andministration results in a moratorium over all debts (a freeze on all amounts owed to Barclays, Norwich Union and everyone down to the milkman).

 

The directors lose control of the club and its assets to the administrator, however as BTF said above they retain a duty to the company.

 

Any compnay or individual who thinks that they are owed money by the club may submit a claim for the amount that they are owed to the administrator.

 

The administrator will then raise as much money as possible from the assets as he/she can. The administrator's main concern is the amount of money that can be raised and not that the football club survives. However in most scenario's the football club being sold (and surviving) is likely to also be the route that the administrator takes to raise as much money as possible.

 

The money raised is then paid out to the various creditors.

 

Creditors who have a charge registered against the company (Barlcays, Norwich Union and maybe a couple of others), will get paid in priority to Joe Bloggs.

 

In a non-football company, who gets paid what would be irrelevant to the business (or club) being sold to a new company and carrying on without the previous debts. The funds are paid out in accordance with a specific legal formula and there isn't much that anyone can do about it.

 

The issue arrises with the F.A. insisting that all football debts are paid in full regardless of everyone else.

 

The F.A.s rules are different from the administrator's legal obligations, which is what causes the problems.

 

In order to pay football related debts. The administrator either needs to pay all debts (and if this is possible there wouldn't have been a need for the club to go into administration in the first place) or the administrator needs to show that paying the football related debts in some way benefits the other creditors (i.e. joe bloggs and eveyone else)

 

This could be the case if an investor made an offer for the club of (say) £5 million but the offer was conditional upon the football related debts of £3m being paid and the club not receiving a 17 point deduction.

 

If the above deal were to go through then although the administrator would have to pay £3m to creditors that he technically shouldn't, this results in an extra £2m being available to pay to everybody else which otherwise wouldn't be available.

 

Does the above make sense? I have tried to write in laymans terms but could well be being too techincal or equally be too patronising. It isn't my intention to do either.

 

CS

[Frank's cousin]

 

The issue arrises with the F.A. insisting that all football debts are paid in full regardless of everyone else.

 

The F.A.s rules are different from the administrator's legal obligations, which is what causes the problems.

 

In order to pay football related debts. The administrator either needs to pay all debts (and if this is possible there wouldn't have been a need for the club to go into administration in the first place) or the administrator needs to show that paying the football related debts in some way benefits the other creditors (i.e. joe bloggs and eveyone else)

 

This could be the case if an investor made an offer for the club of (say) £5 million but the offer was conditional upon the football related debts of £3m being paid and the club not receiving a 17 point deduction.

 

If the above deal were to go through then although the administrator would have to pay £3m to creditors that he technically shouldn't, this results in an extra £2m being available to pay to everybody else which otherwise wouldn't be available.

 

Does the above make sense? I have tried to write in laymans terms but could well be being too techincal or equally be too patronising. It isn't my intention to do either.

 

CS

 

Thanks for the concise and clear account CS. I do think that is where Lowe HAS probably been smart in that I am speculating based on the last audited accounts that we dont have any footballing debts (or at least minimal) so I dont think we would fall fowl of the dreaded -17 on top of the -10 for admin...?

[Clapham Saint]

Thanks for the concise and clear account CS. I do think that is where Lowe HAS probably been smart in that I am speculating based on the last audited accounts that we dont have any footballing debts (or at least minimal) so I dont think we would fall fowl of the dreaded -17 on top of the -10 for admin...?

 

Except that... we are currently in defualt on our overdraft.

 

It is therefore upto the Bank if they want to let certain payments through or not.

 

If you were the bank manager responsible for this account you would know if the company was about to enter administration, in fact as (I presume) the ranking chargeholder, you would have to give your concent.

 

If you knew that the company was about to go into administration and it was your job to minimise the Bank's exposure, would you allow the players wages to be paid or would you block them and leave them to be (football related) debts in the administration?

 

How much is our total wage bill per month?

Edited 23 January, 2009 by Clapham Saint

[teamsaint]

in the absence of any real information, its certain that administration is down to whose interests it serves.

 

I suggest Either

 

1. One of the creditors think they are better off woth the club in administration- seems slightly unlikely during the transfer window, but perhaps thats why a Feb date is being touted around

 

or

 

2. A "prepack" administration is being lined up. (By Lowe ).these DO happen, and DO work. Don't know if its feasible in the case of the Super Saints though.

Anyone know if it could be done?

[westofshannonsaint]

thanks to the op for posting this thread (perhaps it should be stickied)

 

.....................

A buyer would have to make arrangements to take over the company's debts as well as buy the club so it isn't just a case of (any one person) buying the company for a quid, the £27.5m debt is not written off at this stage.

 

but (correct me if I am wrong) you would still buy the club for less from the administrators than you would from the share holders. If someone was looking to buy Saints would they not be better off waiting? at least they would not have to deal with Lowe & co.

 

I have it on good authority that if we do go into administration then Lowe and a few of his friends will buy Southampton FC, lock, stock and barrel.

 

that would not surprise me at all, but the optimist in me will not let me think about it.

[Ken Tone]

Except that... we are currently in defualt on our overdraft.

 

It is therefore upto the Bank if they want to let certain payments through or not.

 

If you were the bank manager responsible for this account you would know if the company was about to enter administration, in fact as (I presume) the ranking chargeholder, you would have to give your concent.

 

If you knew that the company was about to go into administration and it was your job to minimise the Bank's exposure, would you allow the players wages to be paid or would you block them and leave them to be (football related) debts in the administration?

 

How much is our total wage bill per month?

 

Quite. I suspect Bournemouth, Luton etc *tried* not to have football-related debts too, but if you're going skint, banks tend to play dirty.

 

Clapham saint's description of how administration would work is spot on. But if anyone wants a less clear and more patronising analogy ....

 

It's a bit like letting someone else drive your car --- a complete stranger, who won't deliberately crash as such, but won't care about long-term maintenance and servicing, and who may not want to go where you want to go --- but you are forced to sit there as his passenger anyway.

 

K.

[Rational Rich]

thanks to the op for posting this thread (perhaps it should be stickied)

 

 

 

but (correct me if I am wrong) you would still buy the club for less from the administrators than you would from the share holders. If someone was looking to buy Saints would they not be better off waiting? at least they would not have to deal with Lowe & co.

 

 

 

 

Not necessarily, due to the points penalties etc, why take over a business in a manner that immediately prejudices its capability to make money.

[Clapham Saint]

Quite. I suspect Bournemouth, Luton etc *tried* not to have football-related debts too, but if you're going skint, banks tend to play dirty.

 

Clapham saint's description of how administration would work is spot on. But if anyone wants a less clear and more patronising analogy ....

 

It's a bit like letting someone else drive your car --- a complete stranger, who won't deliberately crash as such, but won't care about long-term maintenance and servicing, and who may not want to go where you want to go --- but you are forced to sit there as his passenger anyway.

 

K.

 

I quite like that analogy... I might steal it for explaining things to clients in the future.

 

For what it's worth I don't think that Barclays refusing to pay wages would be "playing dirty". Going by what is posted on this forum, we would seem to have been in breach of our overdraft for a very long time. They could have withdrawn the facility ages ago but have chosen not to.

 

(No I don;t work for them before anyone asks).

[Rational Rich]

in the absence of any real information, its certain that administration is down to whose interests it serves.

 

I suggest Either

 

1. One of the creditors think they are better off woth the club in administration- seems slightly unlikely during the transfer window, but perhaps thats why a Feb date is being touted around

 

or

 

2. A "prepack" administration is being lined up. (By Lowe ).these DO happen, and DO work. Don't know if its feasible in the case of the Super Saints though.

Anyone know if it could be done?

 

A pre-pack is certainly an option but, as stated above, the purchaser would need to obtain sufficient funding to pay enough to the administrators to discharge the football debt in full and beat any other method of realising the assets

[Shrivvy Saint]

Back to the original question - as far as the playing side goes absolutely nothing as we already act like a club in administration anyway - can't afford a proper manager and can't afford a team to compete. Realistically the way things are going Administration is the only way forward just to shake the whole club to its roots. We can only hope that out of it comes better times.

[SaintRobbie]

I have it on good authority that if we do go into administration then Lowe and a few of his friends will buy Southampton FC, lock, stock and barrel.

 

I feel physically sick.