Podcast with insolvency Practitioner

[ramswriter podcast]

??NEW PODCAST??

I’m joined by Insolvency Practitioner Scott Bebbington

we discuss 

✅Admin process
✅Who loses out
✅Stadium Sale
✅Best/Worse case
✅Probable Outcome 

https://pod.fo/e/eba5b

 

[kevinhectoring]

Thanks, listened to this and it was very  interesting. He knows his onions. Only had one comment - when he talks about the stadium he suggests Mel still has some control. It’s misleading. Truth is he has no control at all unless he pays off MSD 

[SamUltraRam]

Yes, very informative.

I was wondering if we are lucky enough to end up with 2 potential buyers, who do the administrators choose ?

eg. 1 bid is for £100m from an experienced, reliable football investment group

& 1 bid is for £120m from an inexperienced investment group with no track record in football - but they both pass the fit & proper test

who would the administrator choose ?

Do they have a duty to recover the most money or to sell to the best group for DCFC ?

 

[MackworthRamIsGod]

9 minutes ago, SamUltraRam said:

Yes, very informative.

I was wondering if we are lucky enough to end up with 2 potential buyers, who do the administrators choose ?

eg. 1 bid is for £100m from an experienced, reliable football investment group

& 1 bid is for £120m from an inexperienced investment group with no track record in football - but they both pass the fit & proper test

who would the administrator choose ?

Do they have a duty to recover the most money or to sell to the best group for DCFC ?

 

This is my worry, who the administrators choose and whose interests they look after.

The long term future of the club, the fans, or who buys the biggest basket of mini muffins.

[Dean (hick) Saunders]

27 minutes ago, SamUltraRam said:

Yes, very informative.

I was wondering if we are lucky enough to end up with 2 potential buyers, who do the administrators choose ?

eg. 1 bid is for £100m from an experienced, reliable football investment group

& 1 bid is for £120m from an inexperienced investment group with no track record in football - but they both pass the fit & proper test

who would the administrator choose ?

Do they have a duty to recover the most money or to sell to the best group for DCFC ?

 

Hopefully the EFL “Fit n Proper” tests will ensure that both are acceptable owners?

(or will they… ?)

[kevinhectoring]

24 minutes ago, SamUltraRam said:

Yes, very informative.

I was wondering if we are lucky enough to end up with 2 potential buyers, who do the administrators choose ?

eg. 1 bid is for £100m from an experienced, reliable football investment group

& 1 bid is for £120m from an inexperienced investment group with no track record in football - but they both pass the fit & proper test

who would the administrator choose ?

Do they have a duty to recover the most money or to sell to the best group for DCFC ?

 

Quite. On the podcast he explained that one of the main duties on the administrator is to get the best result for the unsecured creditors. It seems that makes it difficult for the administrators to refuse the highest offer, even if a lower bidder brings a brighter future. 
 

Perhaos they can avoid the problem if they get their shortlist right 

 

[Beetle]

Question is what type of owner do the fans want?

If we are run sustainably we will be mid table championship team when we recover from the current mess.

Or an owner that splashes the cash once every three years with losses but stays in FFP - we could be in this situation again.

An Owner that completly bankrolls the club and blows all the rules to get to the PL - we could be in this situation again.

I thought we had the perfect owner willing to spend to the FFP limit but fund teh club - how wrong I was.

[Raich Carter]

41 minutes ago, Beetle said:

Question is what type of owner do the fans want?

If we are run sustainably we will be mid table championship team when we recover from the current mess.

Or an owner that splashes the cash once every three years with losses but stays in FFP - we could be in this situation again.

An Owner that completly bankrolls the club and blows all the rules to get to the PL - we could be in this situation again.

I thought we had the perfect owner willing to spend to the FFP limit but fund teh club - how wrong I was.

Totally agree with that - I thought we'd found the right guy too! Just too much bad luck, too many mistakes and too much spent.

I'd rather we don't panic - have a 5-10 year plan. Keep our youth (i.e. do all we can to not sell the Delaps, etc) and manage expectations with the fans accordingly. You could argue we sorta did that but I think we spent too much and risked too much in the interim. It was like a bad run at the casino - you keep losing but keep throwing in hoping to make it back. Then end up being so skint that you don't even have bus fair home so have to walk the 7 miles home (yes, that was me, circa 1990 - never did anything like it again but it cost me my YTS wage of £27.30 rather than Mel's £200m!).

[jono]

3 minutes ago, Raich Carter said:

Totally agree with that - I thought we'd found the right guy too! Just too much bad luck, too many mistakes and too much spent.

I'd rather we don't panic - have a 5-10 year plan. Keep our youth (i.e. do all we can to not sell the Delaps, etc) and manage expectations with the fans accordingly. You could argue we sorta did that but I think we spent too much and risked too much in the interim. It was like a bad run at the casino - you keep losing but keep throwing in hoping to make it back. Then end up being so skint that you don't even have bus fair home so have to walk the 7 miles home (yes, that was me, circa 1990 - never did anything like it again but it cost me my YTS wage of £27.30 rather than Mel's £200m!).

Yes … I suppose it’s like learning from your mistakes, which Mel didn’t. As you say, The sort of thing that can launch a punt is when you do get a crop (as we are now ) and are healthy enough (as we haven’t been for 3 years ) not to sell under pressure for funds

[RAM1966]

2 hours ago, jono said:

Yes … I suppose it’s like learning from your mistakes, which Mel didn’t. As you say, The sort of thing that can launch a punt is when you do get a crop (as we are now ) and are healthy enough (as we haven’t been for 3 years ) not to sell under pressure for funds

I think the fans need to be patient, we should expect to be paying off debt for the next 4-5 years at least - Thanks Mel!!!

I would like to see an owner come in clear all the debt and then have a sustainable approach to getting into the EPL. 

That could be either:

• Run within the clubs means and no losses.
• A sugar Daddy - Who will run within FFP Limits and physical funding with hard cash not debts placed in the club.  It does however have to be within the rules so we do not get another massive points deduction.  

I think most of us thought Mel was physically placing hard cash into the club not maxing out the credit card.  If he is true to his word of not requesting that these soft loans are repaid then Mel will gain a 'little' credibility back with the fans.  I really can't see how between him and Pearce though they still allowed the club to get into such an awful state! 

Edited September 28, 2021 by RAM1966

[BathRam72]

3 hours ago, Dean (hick) Saunders said:

Hopefully the EFL “Fit n Proper” tests will ensure that both are acceptable owners?

(or will they… ?)

Didn't Mel have to pass this test when he took over? ?

[simmoram1995]

I’d prefer a rolling approach = 

spend big = if get in playoffs or automatics successful 

if not = unsuccessful and tighten up the next season aim for mid table but financial stability then go again.

 

by tighten up = more loans , Frees and sell to buy approach 

it’s a risky approach but I means 1 year spend 1 year restrict it should in theory balance out FFP 

 

 

[i-Ram]

12 hours ago, kevinhectoring said:

Thanks, listened to this and it was very  interesting. He knows his onions. Only had one comment - when he talks about the stadium he suggests Mel still has some control. It’s misleading. Truth is he has no control at all unless he pays off MSD 

Not correct. The company that owns the stadium is not subject to administration, and therefore is under the control of Mel Morris. There may be a registered charge over it but that does not preclude Morris from entering into negotiations to sell it, or renegotiate the lease, or anything else he might reasonably want to do. MSD only have it as security, and can only take possession of the stadium for the repayment of the debt when they have a legal option to do so. That option might not yet have been triggered, given that I think all the debt is in the clubs name with third party security of the stadium and a personal guarantee supporting the direct security they have with the club - a fixed and floating charge, and I think a charge on the leasehold interest in Moor Farm.

[kevinhectoring]

36 minutes ago, i-Ram said:

Not correct. The company that owns the stadium is not subject to administration, and therefore is under the control of Mel Morris. There may be a registered charge over it but that does not preclude Morris from entering into negotiations to sell it, or renegotiate the lease, or anything else he might reasonably want to do. MSD only have it as security, and can only take possession of the stadium for the repayment of the debt when they have a legal option to do so. That option might not yet have been triggered, given that I think all the debt is in the clubs name with third party security of the stadium and a personal guarantee supporting the direct security they have with the club - a fixed and floating charge, and I think a charge on the leasehold interest in Moor Farm.

202 would go into administration tomorrow if MM did anything contrary to the interests of the club  

And there is absolutely no doubt that MSD has the power to appoint. There are probably 20 enforcement events that have been triggered, not least the admin of the club   

[jono]

1 hour ago, RAM1966 said:

I think the fans need to be patient, we should expect to be paying off debt for the next 4-5 years at least - Thanks Mel!!!

I would like to see an owner come in clear all the debt and then have a sustainable approach to getting into the EPL. 

That could be either:

• Run within the clubs means and no losses.
• A sugar Daddy - Who will run within FFP Limits and physical funding with hard cash not debts placed in the club.  It does however have to be within the rules so we do not get another massive points deduction.  

I think most of us thought Mel was physically placing hard cash into the club not maxing out the credit card.  If he is true to his word of not requesting that these soft loans are repaid then Mel will gain a 'little' credibility back with the fans.  I really can't see how between him and Pearce though they still allowed the club to get into such an awful state! 

The only debt we will have is how much the new owners are comfortable taking on

[i-Ram]

19 minutes ago, kevinhectoring said:

202 would go into administration tomorrow if MM did anything contrary to the interests of the club  

And there is absolutely no doubt that MSD has the power to appoint. There are probably 20 enforcement events that have been triggered, not least the admin of the club   

Now you are arguing a different point. I didn't say 202 wouldnt go into administration if MM did anything contrary to the interests of the club (well MSD really). I wasnt arguing either that some enforceable events may have taken place either, BUT (as I understand it) MSD HAVE NOT APPOINTED AN ADMINISTRATOR OR LIQUIDATOR ON THE COMPANY OWNING THE STADIUM.

So the guy on the podcast is correct in saying, and you are wrong, that Morris still has some control of the stadium.

MSD do not need to do anything as yet enforcing their third party security over the stadium. They have the football club's administrator who will let them know in due course if the loan they made to the club can be repaid from realisable club assets (or repayment by any new owner of the club). After that point if there is a shortfall they will revert to the personal guarantee that Morris provide and/or appoint an administrator to seek repayment from the sale of the stadium.

[PistoldPete]

40 minutes ago, kevinhectoring said:

202 would go into administration tomorrow if MM did anything contrary to the interests of the club  

And there is absolutely no doubt that MSD has the power to appoint. There are probably 20 enforcement events that have been triggered, not least the admin of the club   

I don’t think the issue is of administration when it comes to The company (202 you say) that owns PPS.

if it defaults on payments to MSd then Msd has a legal charge on PPS so it can take possession of PPS no need to liquidate the Company. 
 

mel says he will look to sell PPS to the new owners and if the company was a special purpose vehicle set up to purchase PPS , if it no longer owned PPS there wouldn’t seem to be much point in Mel keeping that company going either so he may as well liquidate it anyway , but that would be a voluntary liquidation with no need for administration.

[kevinhectoring]

1 hour ago, i-Ram said:

So the guy on the podcast is correct in saying, and you are wrong, that Morris still has some control of the stadium.

‘some’ control !! 

Well MM can’t sell the stadium, he can’t grant leases, he can’t grant security, he can’t change the terms of the club’s lease. We know all this from the charging documents. He can’t even grant contractual licences except in accordance with the specific exceptions agreed in the loan agreement.  This is why MSD doesn’t need 202 in administration to protect its interests: their security is protected by their deal terms and that is because those terms take control away from 202

oh and by the way the shares he owns in 202 are doubtless pledged to MSD so they could sack MM as director whenever they want

The administrators have stated that the club must continue to have a right to use the ground (duh). So if they decide to sell the freehold to a new owner, rather than rely on a lease, that will happen whatever MM may want. 
 

So no, the guy on the podcast could have been much clearer and he could have said to the fans: you don’t need to worry at all about 202 owning the stadium, the people running the club control it. Instead he suggested MM has control 

btw you said MM has personally guaranteed MSD.  Ages ago there was a report he had guaranteed Gabay. Have you seen it reported he is on the hook to MSD personally ? 

[PistoldPete]

35 minutes ago, kevinhectoring said:

‘some’ control !! 

Well MM can’t sell the stadium, he can’t grant leases, he can’t grant security, he can’t change the terms of the club’s lease. We know all this from the charging documents. He can’t even grant contractual licences except in accordance with the specific exceptions agreed in the loan agreement.  This is why MSD doesn’t need 202 in administration to protect its interests: their security is protected by their deal terms and that is because those terms take control away from 202

oh and by the way the shares he owns in 202 are doubtless pledged to MSD so they could sack MM as director whenever they want

The administrators have stated that the club must continue to have a right to use the ground (duh). So if they decide to sell the freehold to a new owner, rather than rely on a lease, that will happen whatever MM may want. 
 

So no, the guy on the podcast could have been much clearer and he could have said to the fans: you don’t need to worry at all about 202 owning the stadium, the people running the club control it. Instead he suggested MM has control 

btw you said MM has personally guaranteed MSD.  Ages ago there was a report he had guaranteed Gabay. Have you seen it reported he is on the hook to MSD personally ? 

The Daily Fail article suggest that he has given PGs to MSD.

https://www.dailymail.co.uk/sport/football/article-10028621/Derby-owner-Morris-writing-100million-loans-administrators-reveal-expressions-interest.html

 

[kevinhectoring]

17 minutes ago, PistoldPete said:

The Daily Fail article suggest that he has given PGs to MSD.

https://www.dailymail.co.uk/sport/football/article-10028621/Derby-owner-Morris-writing-100million-loans-administrators-reveal-expressions-interest.html

 

The reference to security over personal assets? I wonder if that’s a reference to the stadium owning group