Administration is it the best option now

[jono]

52 minutes ago, BaaLocks said:

The plan is simple - Mel to sell, EFL to cease the witch hunt, Derby to start fresh. Trouble is we're not in control of the decisions so our only choice seems to be to sit back and watch it happen to us. Not much of the 'hope for the best, plan for the worst' seems to be going on.

What really sticks in the craw is that you can see the road we are going down and you can see the vindictive nature of the |EFL... I can see us being done at least twice .. Administration = points deduction. Followed by Failed FFP/P+S = second deduction. 

They did it to Luton and they will do it again 

[Coneheadjohn]

1 hour ago, BathRam72 said:

 

Win a load of money then buy Mel out.

Agree with everything but I’ll probably give this but a miss.

[1967RAMS]

2 hours ago, Curtains said:

I think Mel should consider it to be honest 

I think it may be  the only viable option. Happy to be corrected but I am sure a company cannot just write off debts to an owner, which means potential new owners are put off by this. Admission would allow the debt to be legally written off and allow fresh owners to start again from league 1 next season 

[CornwallRam]

24 minutes ago, Malty said:

Just on this, the director’s will legally need to decide if DCFC is a “going concern” in order for them to submit their account and the auditors have a duty to ensure they are happy with this. 

Often in these circumstances the auditors will need a letter from the shareholders (in this case probably Mel) that they are prepared to continue pay the bills. If the auditors are not given these reassurances then they will not be able to submit accounts on a “going concern” basis and that would cause all kinds of difficulties.

So Mel will have to make the decision to continue to finance the club pretty quickly otherwise administration beckons (assuming as I’m led to believe that there is no hope of a takeover on the short term).

(FWIW, I’m a qualified accountant and therefore “in the know” about the above at least)

My bet is that none of this will happen until after the season starts and we will start the season with only four more questionable signings, alongside the current squad.

…. and I’m sure I’ll get comments saying that I’m not in the know on this point (which is getting more and more common from forum members). So to be clear again, I’m not “in the know”, I’m speculating.

Just speculating. Not “in the know”. Hope that’s clear.

@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.

[Spanish]

3 minutes ago, 1967RAMS said:

I think it may be  the only viable option. Happy to be corrected but I am sure a company cannot just write off debts to an owner, which means potential new owners are put off by this. Admission would allow the debt to be legally written off and allow fresh owners to start again from league 1 next season 

sorry probably got the wrong end of the stick but what debts are these that you refer to?

[i-Ram]

32 minutes ago, Malty said:

Just on this, the director’s will legally need to decide if DCFC is a “going concern” in order for them to submit their account and the auditors have a duty to ensure they are happy with this. 

Often in these circumstances the auditors will need a letter from the shareholders (in this case probably Mel) that they are prepared to continue pay the bills. If the auditors are not given these reassurances then they will not be able to submit accounts on a “going concern” basis and that would cause all kinds of difficulties.

So Mel will have to make the decision to continue to finance the club pretty quickly otherwise administration beckons (assuming as I’m led to believe that there is no hope of a takeover on the short term).

(FWIW, I’m a qualified accountant and therefore “in the know” about the above at least)

My bet is that none of this will happen until after the season starts and we will start the season with only four more questionable signings, alongside the current squad.

…. and I’m sure I’ll get comments saying that I’m not in the know on this point (which is getting more and more common from forum members). So to be clear again, I’m not “in the know”, I’m speculating.

Just speculating. Not “in the know”. Hope that’s clear.

Stephen Pearce caught on camera earlier today finishing off the accounts.

[1967RAMS]

22 minutes ago, i-Ram said:

Stephen Pearce caught on camera earlier today finishing off the accounts.

Have we sold Tom Lawrence? 

[RoyMac5]

Seems not @Curtains#COYR

[Gringo]

3 hours ago, Curtains said:

I think Mel should consider it to be honest 

 

3 hours ago, Curtains said:

I think Mel should consider it to be honest 

Do you even know what administration is? Or what it entails and also the new regulations that cover, related parties, preferential creditors, EFL regulations and of course there are the MSD loans on the stadium and the academy.

There is NO chance of Mel going for administration not a snowballs chance in hell, his best financial option is liquidation.

[glyn1957]

I am starting to wonder if we are  able to assure the EFL that we can finance our participation in the championship this season.

[RoyMac5]

20 minutes ago, glyn1957 said:

I am starting to wonder if we are  able to assure the EFL that we can finance our participation in the championship this season.

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

Quote

DerbyshireLive also understands there are no concerns over cash flow and no concerns over player wages being paid.

 

Edited July 26, 2021 by RoyMac5

[i-Ram]

34 minutes ago, Charlotte Ram said:

Do you even know what administration is? Or what it entails and also the new regulations that cover, related parties, preferential creditors, EFL regulations and of course there are the MSD loans on the stadium and the academy.

There is NO chance of Mel going for administration not a snowballs chance in hell, his best financial option is liquidation.

Now I might not be as bright as you, but I thought:

1) Company Administration is entered into with a view to business rescue and recovery

2) Company Liquidation is the method used to realise a company’s assets prior to closing it down.

Are you really suggesting Mel should close the Football Club down?  When responding might you also copy in mymate @Curtainswho is unavailable at the moment as he is having a doze after working on a rather complicated crossword in the Sun.

[Curtains]

23 minutes ago, i-Ram said:

Now I might not be as bright as you, but I thought:

1) Company Administration is entered into with a view to business rescue and recovery

2) Company Liquidation is the method used to realise a company’s assets prior to closing it down.

Are you really suggesting Mel should close the Football Club down?  When responding might you also copy in mymate @Curtainswho is unavailable at the moment as he is having a doze after working on a rather complicated crossword in the Sun.

You are right 

When a company goes into liquidation its assets are sold to repay creditors and the business closes down. ... The overall aim of an insolvent liquidation process is to provide a dividend for all classes of creditor, but it is often the case that unsecured creditors receive little, if any, return

[Curtains]

1 hour ago, Charlotte Ram said:

 

Do you even know what administration is? Or what it entails and also the new regulations that cover, related parties, preferential creditors, EFL regulations and of course there are the MSD loans on the stadium and the academy.

There is NO chance of Mel going for administration not a snowballs chance in hell, his best financial option is liquidation.

Really 

https://companieshouse.blog.gov.uk/2019/02/27/what-does-going-into-administration-mean/

as opposed to 

 

When a company goes into liquidation its assets are sold to repay creditors and the business closes down. ... The overall aim of an insolvent liquidation process is to provide a dividend for all classes of creditor, but it is often the case that unsecured creditors receive little, if any, return

[i-Ram]

3 minutes ago, Curtains said:

You are right.
When a company goes into liquidation its assets are sold to repay creditors and the business closes down. ... The overall aim of an insolvent liquidation process is to provide a dividend for all classes of creditor, but it is often the case that unsecured creditors receive little, if any, return

I am sure @Charlotte Ramwill be back soon to justify his/her position on why it will be best for Mel to close the Club down.

[Gringo]

4 minutes ago, Curtains said:

Really 

https://companieshouse.blog.gov.uk/2019/02/27/what-does-going-into-administration-mean/

as opposed to 

 

When a company goes into liquidation its assets are sold to repay creditors and the business closes down. ... The overall aim of an insolvent liquidation process is to provide a dividend for all classes of creditor, but it is often the case that unsecured creditors receive little, if any, return

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

[Woodley Ram]

NO

[Curtains]

 

10 minutes 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

Right so it looks like Mel wants to run the club again ! 
 

This would suggest no takeover imminent 

Edited July 26, 2021 by Curtains

[Gringo]

2 minutes ago, Curtains said:

 

Right so it looks like Mel want to run the club again ! 

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

[RoyMac5]

6 minutes ago, Curtains said:

 

Right so it looks like Mel wants to run the club again ! 
 

This would suggest no takeover imminent 

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