ooh it's a corner Posted 23 April, 2009 Posted 23 April, 2009 Simple question, assuming we finish bottom three, we will start on -10. But I thought there was an extra bonus for failing to come out of admin with a CVA, so if the plc doesnt come out with a CVA, will we start on -25? Or will the football league say that the football club and plc aren't linked this way?
ooh it's a corner Posted 23 April, 2009 Author Posted 23 April, 2009 Company Voluntary Arrangement (or agreement), the bit that says we will pay all our football creditors back 100%
PaulSaint Posted 23 April, 2009 Posted 23 April, 2009 Company Voluntary Arrangement (or agreement)' date=' the bit that says we will pay all our football creditors back 100%[/quote'] As there is zero chance of anyone buying a 3rd tier club and paying off £32m of debt then can we offically say now that we will start on a lot less points than 10?
bridge too far Posted 23 April, 2009 Posted 23 April, 2009 As there is zero chance of anyone buying a 3rd tier club and paying off £32m of debt then can we offically say now that we will start on a lot less points than 10? Whoever buys us doesn't have to pay off the £32m! It's a mortgage.
1976_Child Posted 23 April, 2009 Posted 23 April, 2009 Whoever buys us doesn't have to pay off the £32m! It's a mortgage. i think that actually only about 24m is the mortgage. the rest is normal run of the mill borrowing and liabilities
PaulSaint Posted 23 April, 2009 Posted 23 April, 2009 Whoever buys us doesn't have to pay off the £32m! It's a mortgage. Are you saying that the line "pay all our football creditors back 100%" excludes Aviva's debt?
beatlesaint Posted 23 April, 2009 Posted 23 April, 2009 Are you saying that the line "pay all our football creditors back 100%" excludes Aviva's debt? yes, its a mortgage.....and if the stadium is purchased by a different body than buys the Football Club (ie the City Council) then that "debt" is not with SFC. Besides i thought it was a given that Aviva will accept a lot less than the £24mil to clear the debt, hence the City Council's interest. And anyway the stadium comes under either the PLC unbrella or this St Marys Stadium Ltd company.
bridge too far Posted 23 April, 2009 Posted 23 April, 2009 Are you saying that the line "pay all our football creditors back 100%" excludes Aviva's debt? That would be my take on it. I would assume that a new owner would take on the mortgage and pay it off over however many years there are remaining. Unless someone else buys the stadium and rents it back to the new owners. I'm not sure of my ground here but I don't think this mortgage is a 'football related debt'. I think the FRD is players wages etc. Can someone confirm or otherwise?
Arizona Posted 23 April, 2009 Posted 23 April, 2009 Company Voluntary Arrangement (or agreement)' date=' the bit that says we will pay all our football creditors back 100%[/quote'] We already have agreed to pay back Aviva 100% for the stadium with a £24m mortgage paid back over 25 years. If we were taken over, I can't see that we'd have to stump up all £31m at once to get the CVA. It's the six and a bit million overdraft that's causing all the problems. Or at least that's my take on it.
Pedro Posted 23 April, 2009 Posted 23 April, 2009 Surely a loan/mortgage only becomes a debt when repayments are in arrears, would be surprised if full amount became due "on demand" unless no money has been paid to Aviva for a considerable time. I agree that the bank overdraft has been the problem with them calling some of it in that we couldn't do, had this been the case before the transfer window then surely we could have had a fire sale of say, Surman/Davis/Lallana so we could keep afloat. Also, surely Lowe and Wilde didn't make all the decisions without the rest of the board's backing.
Dibden Purlieu Saint Posted 23 April, 2009 Posted 23 April, 2009 We will only have to pay football creditors to get our CVA, so outstanding transfer arrangements (McGoldrick fee to Notts County) and any League fees. It should be do-able for whoever buys us. Aviva debt and Barclays debt WILL NOT be included.
saintjinksie Posted 23 April, 2009 Posted 23 April, 2009 Simple question, assuming we finish bottom three, we will start on -10. But I thought there was an extra bonus for failing to come out of admin with a CVA, so if the plc doesnt come out with a CVA, will we start on -25? Or will the football league say that the football club and plc aren't linked this way? bournemouth and rotherham got -17, so that has set a precedent surely?
chuz Posted 23 April, 2009 Posted 23 April, 2009 My understanding is this: 10 points for going into administration. Additional points if you do not come out of admin with a Creditors Voluntary Agreement (CVA). Clubs that have not come out with a CVA in the past have not done so because the owed lots of money to the tax man. The FA (or it might be the FL, or indeed both) demand that all football related costs are paid in full. Until they are paid in full you cannot come out of administration, and you cannot play in the league. CVA's usually require that creditors agree to be paid a certain proportion of the money owed to them (say for argument 10p in every £1) rather than see the company go bust and get nothing. The problem has come in the past with the tax man. The tax man has said "hang on, the transfer fees owed are being paid in full, the players are being paid in full, yet we (the Government) are being offered 10p in the £1. That is not fair". So they have refused to agree to CVAs. IF we do not owe the tax man a lot of money, the chances of getting a CVA will be significantly enhanced. I can imagine this kind of scenario... A new buyer agrees to take on and pay the full cost of Football commitments (players wages, transfers owed etc) AND agrees to pay off the money owed to the tax man. It then does a deal with the creditors and offers (say for argument) £5 million to Aviva to pay off the stadium debt, £3 million to Barclays to pay off the overdraft and a proportion of the monies owed to every other creditor (the pie supplier, programme printer etc). If this can be agreed, then we can move out of admin without an additional points penalty. Two things worth bearing in mind: 1. If we owe the tax man shed loads of money, we are in deep trouble 2. The people who really suffer are local companies that supply the club with goods and services. Many cannot afford to take 10p in the £1 or whatever. This is only my understanding and if I have it totally wrong apologies! Also all the sums mentioned in here are totally speculative. Basically any new owner will want to lose as much debt as possible in exchange for cash buy outs, but they cannot write off any of the football debt and they would be unwise not to pay the tax man...
Johnny Shearer Posted 23 April, 2009 Posted 23 April, 2009 I am very worried about getting hit with further penalties. Have a sinking feeling about it all.
NickG Posted 23 April, 2009 Posted 23 April, 2009 As there is zero chance of anyone buying a 3rd tier club and paying off £32m of debt then can we offically say now that we will start on a lot less points than 10? we don't have £32m debt, we have mortgage, and overdraft
ooohTerryHurlock Posted 23 April, 2009 Posted 23 April, 2009 We already have agreed to pay back Aviva 100% for the stadium with a £24m mortgage paid back over 25 years. If we were taken over, I can't see that we'd have to stump up all £31m at once to get the CVA. It's the six and a bit million overdraft that's causing all the problems. Or at least that's my take on it. So why can't we go to another lender to get barclays off our back - at the end of the day this is all paper money - we are caught up in a load of red tape. We could raise money if we could sell season tickets and the like but we can't if we are in admin? We just need to rearrange our borrowing to another lender. Strike somekind of new deal with Aviva.
Doctoroncall Posted 23 April, 2009 Posted 23 April, 2009 This is confusing, the club is not in admin but the holding company is but the FL seem to be taking both as the same according to their statement: "In light of all this advice, the Board concluded that an administrator had been appointed in respect of the Club or part of its undertaking or assets. Accordingly, it was left with no alternative other than to invoke its 'Sporting Sanctions' regulations and apply a 10 point penalty to the Club. The other provisions of The League's insolvency policy also become effective." So it looks like they are going to put the boot in regardless.
ypbl Posted 23 April, 2009 Posted 23 April, 2009 My understanding is this: 10 points for going into administration. Additional points if you do not come out of admin with a Creditors Voluntary Agreement (CVA). Clubs that have not come out with a CVA in the past have not done so because the owed lots of money to the tax man. The FA (or it might be the FL, or indeed both) demand that all football related costs are paid in full. Until they are paid in full you cannot come out of administration, and you cannot play in the league. CVA's usually require that creditors agree to be paid a certain proportion of the money owed to them (say for argument 10p in every £1) rather than see the company go bust and get nothing. The problem has come in the past with the tax man. The tax man has said "hang on, the transfer fees owed are being paid in full, the players are being paid in full, yet we (the Government) are being offered 10p in the £1. That is not fair". So they have refused to agree to CVAs. IF we do not owe the tax man a lot of money, the chances of getting a CVA will be significantly enhanced. I can imagine this kind of scenario... A new buyer agrees to take on and pay the full cost of Football commitments (players wages, transfers owed etc) AND agrees to pay off the money owed to the tax man. It then does a deal with the creditors and offers (say for argument) £5 million to Aviva to pay off the stadium debt, £3 million to Barclays to pay off the overdraft and a proportion of the monies owed to every other creditor (the pie supplier, programme printer etc). If this can be agreed, then we can move out of admin without an additional points penalty. Two things worth bearing in mind: 1. If we owe the tax man shed loads of money, we are in deep trouble 2. The people who really suffer are local companies that supply the club with goods and services. Many cannot afford to take 10p in the £1 or whatever. This is only my understanding and if I have it totally wrong apologies! Also all the sums mentioned in here are totally speculative. Basically any new owner will want to lose as much debt as possible in exchange for cash buy outs, but they cannot write off any of the football debt and they would be unwise not to pay the tax man... Yes Chuz, what you say is correct. Fingers' crossed we can pay off the football and tax debts and then reach a deal with everyone else. As you say it's the local firms who supply goods and services like food and cleaning which will have to suffer the biggest hit. This could be a big sticking point, but I guess is where Mark Fry will earn his money.
aintforever Posted 23 April, 2009 Posted 23 April, 2009 bournemouth and rotherham got -17, so that has set a precedent surely? I think they got more because they have been in administration before.
VectisSaint Posted 23 April, 2009 Posted 23 April, 2009 So why can't we go to another lender to get barclays off our back You have heard of the credit crunch haven't you? Caused because no-one wants to loan anyone any money, especially if the loanee is slightly dodgy. Borrowing money by a plc in admin, or recently in admin does not suggest a good credit rating. But the bottom line is, our debt is not the £27 or £30m that has been bandied around. Indeed our outstanding mortgage debt was being paid off more quickly than was needed, which was a good thing (for us). Aviva would be crazy to suggest repossession, they will make far more money if we continue to pay them back as per our agreement, especially as the interest rate is far above the current base rate. Our debt is the £4+ million from the overdraft (that caused the issue initially) plus any other debts (I understood that we had paid Notts Co and Bournemouth bu the FL had withheld the payments). That is what an investor is looking at as minimum to buy the Club, but of course they also need money to continue to operate, especially through the summer when we have no income.
um pahars Posted 23 April, 2009 Posted 23 April, 2009 (edited) The way I read the League statement was that they have ruled that the Club & PLC are one and the same (as I feared they have applied substance over form ruling here) and that they effectively deem the Club to also be in administration. Therefore the line "The other provisions of The League's insolvency policy also become effective" means that if we don't come out of this "administration" (i.e the PLC's administration) without an agreed CVA, then we start to have additional points deducted. The main hurdle to agreeing a CVA will be the opposition of HMRC, although they may not be alone in opposing a CVA, and as someone had pointed out, as long as HMRC don't have 25% of the voting rights at a creditors meeting then we may have a chance, (or as long as HMRC and others who oppose it don't account for more than 25% of the creditors). I would therefore suggest that if we're not out of the bottom 3 come the end of the Forest game, then we will start next season in Division 3 initially with -10 and then any further deduction of -15 is up for grabs depending on whether or not we can agree a CVA (which is not an impossibility). Edited 23 April, 2009 by um pahars
crouchi Posted 23 April, 2009 Posted 23 April, 2009 So all we need is a really 'smart' business man who wants to acquire a debt laden company that will not make enough money to cover its operating costs - oh dear!
Horley CTFC Saint Posted 23 April, 2009 Posted 23 April, 2009 Simple question, assuming we finish bottom three, we will start on -10. But I thought there was an extra bonus for failing to come out of admin with a CVA, so if the plc doesnt come out with a CVA, will we start on -25? Or will the football league say that the football club and plc aren't linked this way? A CVA is a form of administration...hey but what happens if the adminstrator puts the club into CVA (which its not at the moment) does that mean a further points deduction?
Gingeletiss Posted 24 April, 2009 Posted 24 April, 2009 Methinks, reading this thread, that we should have a sticky started. This will be a pledge site, to purchase a season ticket for 'next season'. This would show (hopefully), any prospective buyer, that there is life after death, and they could run a profitable business.
slickmick Posted 24 April, 2009 Posted 24 April, 2009 Methinks, reading this thread, that we should have a sticky started. This will be a pledge site, to purchase a season ticket for 'next season'. This would show (hopefully), any prospective buyer, that there is life after death, and they could run a profitable business. Good idea.
saintalan Posted 24 April, 2009 Posted 24 April, 2009 Agree, willing to effectively buy 2 now, just put the money in Escrow until they can legally be sold by any new owner. Whilst I am still backing the other pledge this seems like a sensible idea, and IIRC was mentioned (DubaiPhil?) a few weeks ago. Cheers
The9 Posted 24 April, 2009 Posted 24 April, 2009 No-one that I've seen has yet mentioned that since HMRC lost it's legal status as a preferred creditor a couple of years back that they have voted against ALL football club CVAs as a matter of policy, which is one of the reasons there have been so many additional deductions. I'm not sure there are any examples of teams coming out of CVA without additional penalties since Leeds' deduction shenanigans, though it may just be the timing which is coincidental.
sticksaint Posted 24 April, 2009 Posted 24 April, 2009 As i understand it we don`t owe the taxman any money(i`m sure i read it on here somewhere) so we should be ok!
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