Administration is it the best option now

[Curtains]

2 minutes ago, Charlotte Ram said:

That is what I would do, on a Burton Albion wage budget, of £6-7million a year.

It’s very difficult for the fans to know what’s happening but any talk of administration or liquidation has been put to rest by what you have said and that’s a relief because I want the best for the club .

Hopefully these latest developments are not just platitudes.

I will be truly happy when we are talking Football and how the Team are performing week in week out rathe than all the other peripheral stuff .

Happy Days will return I hope. 

[Curtains]

2 minutes ago, RoyMac5 said:

That's not what has been suggested by Chris Coles:

 

Ok point taken. 
 

Looks like Mel will finance the club until it’s taken over !

[Malty]

3 hours ago, CornwallRam said:

@Malty, as an accountant, would we be able to reduce the HMRC debt by going into administration?

We know we can't clear the apparent football related debts - transfer instalments and, I think, payouts to Keogh and Cocu. The MSD loan is secured, so administration won't help that - even less so if it's MSD putting us into administration.

The club would be able to default on supplier's credit, but I doubt that's going to cut more than six figures. The big chunk is the supposed £20m we owe to HMRC. If £15m or so can vanish from that, administration could be seen as worthwhile.

I’m not a corporate recovery accountant or expert but I can broadly tell you the below:

- In the event of administration the creditors are paid in a certain order.

- the crown are towards the top of the list

- shareholders are bottom (and usually get nothing (so Mel would get nothing).

- secured creditors will be paid out of proceeds from the sale of the assets that they are secured against. So the administrator would sell those assets and pay the secured creditors (note that in Derby’s case it probably wouldn’t come to this as whoever buys what’s left of DCFC would need the stadium and therefore have to come to some kind of arrangement).

- unsecured creditors get the rough end of the deal and normally end up with a few pennies per pound.

the administrators would take a fee from the sale of what’s left of DCFC - and DCFC pretty much starts again without the debt that the old company had.

Of course it’s much more complicated than that, but broadly that’s the picture. 

Of course, don’t forget that administration means a pretty large sanction from the EFL.

The other point to note is that any buyer would be looking at Derby and thinking I’d get a much better deal if I let it fail and then saved it than buying the business as a going concern from Mel. It stinks, but that’s how it normally works.

[G STAR RAM]

6 hours ago, Curtains said:

I think Mel should consider it to be honest 

What are the ins and outs of him putting us into administration?

What would he gain from it and what would he lose?

[IlsonDerby]

6 hours ago, Curtains said:

I think Mel should consider it to be honest 

Isn’t our biggest debt to HMRC? Which means that admin wouldn’t solve it as taxes aren’t subject to the same agreements as other creditors ?  

[Comrade 86]

Have a day off mate! 

[Curtains]

3 minutes ago, 86 Hair Islands said:

Have a day off mate! 

I’ll make it a month 

[Comrade 86]

6 minutes ago, Curtains said:

I’ll make it a month 

Can't do that mate. There's football to watch. Think all will come clear over the next week or so anyway.

[glyn1957]

2 hours ago, RoyMac5 said:

What? Have you read the 'Chris Coles' twitter thread?

 

No i do not have twitter ,its the feeling that if you cant say yes to the questions i put to DCFC about my four season tickets it leaves me feeling very nervous.

 

[G-Ram]

I still think the Erik Alonso takeover was our best option ?

[Boycie]

2 minutes ago, G-Ram said:

I still think the Erik Alonso takeover was our best option ?

So did Simon Jordan.

[G-Ram]

3 minutes ago, Boycie said:

So did Simon Jordan.

????

[Curtains]

1 hour ago, 86 Hair Islands said:

Can't do that mate. There's football to watch. Think all will come clear over the next week or so anyway.

Hope so but I don’t hold out much hope to be honest. 
 

 

[SillyBilly]

8 hours ago, Ambitious said:

I thought the people who understood the accounts were of the mind that administration doesn't help anyone? 

I do not believe that a 15 point penalty would make a jot of difference to us in our current state. We could well be the first team ever relegated with negative points. 

Jeez, it really is a possibility isn't it. Record low Prem total, not sure about -ve but could definitely see a record low Championship total if we're deducted points; we'll be odds on for League 1 record low next? Total shambles.

[Spanish]

3 hours ago, Charlotte Ram said:

This is straight forward,

If Mel puts the company into administration and he is the only who can do it as he is covering all expenditure at the moment and hence the club is a going concern.

 All the property and fixed  assets will be sold or the value realised of the intangible assets (players) by an administrator who would be an insolvency practitioner appointed by the court. Mel would have no say where the assets were sold and for how much and if he was an unsecured creditor for his company loans would lose everything, also MSD are preferential creditors with two separate charges over the stadium all assets and the academy, they have a negative pledge on both charges which essentially means that Mel cannot do anything without their approval including a sale to another party, and neither could the administrator.

Also HMRC is now a secondary preferred creditor (from 1/12/20) so that debt would not disappear and neither would any football related debts which if not paid in full would stop the Rams from rejoining the football league again, and finally all debts would be as follows; Clubs are required to pay Football Creditors in full. Other creditors must be paid 25p in the pound on exit or 35p in pound over a 3 year period.The cherry on the cake would bee the points deduction of 10-12 points, plus the need to prove the club had sufficient cash to carry them through I believe 18 months trading, so to sum up if Mel put the club into administration, he would lose everything the club would have no players, no academy and no stadium and no meaningful reduction in debt. 

If Mel was to liquidate with MSD approval he would realise part of his loans and control the process, my guess is that he will kick to touch and see if the takeover/additional investment happens and then decide, he is paying wages and bills at the moment, the only thing he is not doing is buying in players, because he cannot due to the EFL

Top post.  Liquidation ends the club forever of course and I can’t believe this is something he could contemplate

[ossieram]

I wondered why I didn't come on here as often as I used to, then I read this and my question was answered. 

[kevinhectoring]

11 hours ago, Curtains said:

You got any better ideas .

Well where do you start, with ideas that are better than yours? Here are a few: Agree a number with HMRC, agree the accounts with EFL, address any other embargo issues, strengthen the squad, be prepared to sack Rooney if he can’t motivate or organise us on the pitch, find a new owner who is a safe pair of hands, get excited about 21/22.
Administration?  Are you ‘aving a laugh?

[kevinhectoring]

11 hours ago, mwram1973 said:

We won't decide anything, It'll be Mel that puts us into admin if he so chooses.

It would probably be MSD. If Mel throws in the towel (I don’t think he would ever do that), I think he’d stop paying MSD and tell them to do their worst. Why are we even discussing this ? 

[Boycie]

Curtains, curtains is falling apart again.

?

[Ken Tram]

9 hours ago, Charlotte Ram said:

... if Mel put the club into administration, he would lose everything the club would have no players, no academy and no stadium and no meaningful reduction in debt. 

Would you mind kindly explaining the situation relating to the stadium?

Has the club sold the stadium? And if so, would it not be separate from the club's assets?

In fact, I would not mind a tiny explanation about what actually happened in relation to the stadium!