Derby finally accept 21 point deduction.

[I know nuffin]

On 10/10/2021 at 22:09, europia said:

Mr Morris decided that he was no longer willing to fund the clubs operational costs. That's it really. 

The word he used when chatting about going into administration was able not willing. Stated the money had run out

[Van der MoodHoover]

4 hours ago, Rev said:

I once ran a multi-millionaire bound business, but Max Mosley's death and Tories starting to prefer the opposite sex killed it off.

I'm choked up...... I'll start a whip round..... ?

[Mostyn6]

7 hours ago, Ghost of Clough said:

You cannot use "need to have a competitive squad" as an excuse. If that's what the administrators use to defend out transfer activity then the appeal be flat out rejected.

Enough players should have been sold to see us through to the point where we can avoid admin. Certainly long enough to get through to the next transfer window where further sales can be made if needed. Remember, the club statement said we're approaching a "financially sustainable" position.

Gotta pull you up on this as it’s nonsense. You cannot factor in hypothetical sales, as you’re factoring in imaginary interest from buying clubs and imaginary values to some extent, this is something the club has been penalised for with amortisation policy so the EFL can hardly apply it! 
 

also the number 1 rule is to play competitive football and try to win. 

[Oldben]

Under a scenario where derbys 12pts are reduced to 6pts on appeal.

Derby would still face a further 9 point deduction from the efl.

With the current squad and the transfer embargo plus not being allowed to offer high salaries for free transfers, how does Derby avoid the drop.

The administrators are attempting to reduce the 12pts so as to keep potential new buyers keen.

But if we end up on 15pts as summarised I think we still face the drop.

I read that the administrators believe that with clubs current debt and ground ownership situation, only staying in the championship offers the potential of new owners.

I think even if it was 15pts there's the further 3pts deduction for each potential breach of failing to pay players wages on time hanging over the club.

Then there's the January transfer window, players could be sold but due to transfer embargo, who could Derby bring in to strengthen the team.

Mens guilty of leaving the club without the talent to escape the drop, how can the club escape the drop without winning games instead of just drawing games.

[Ghost of Clough]

7 hours ago, Mostyn6 said:

Gotta pull you up on this as it’s nonsense. You cannot factor in hypothetical sales, as you’re factoring in imaginary interest from buying clubs and imaginary values to some extent, this is something the club has been penalised for with amortisation policy so the EFL can hardly apply it! 
 

also the number 1 rule is to play competitive football and try to win. 

There were confirmed bids for Buchanan and Lawrence 

[PistoldPete]

25 minutes ago, Ghost of Clough said:

There were confirmed bids for Buchanan and Lawrence 

How much? £1 million each? So we delay admin by a month or two? Too little to late.. plus the risk that EFL embargo meant we coudln't get replacements, so increasing the risk of further financial strain through relegation. 

[Crewton]

As I understood it, there was "interest" from WBA in Lawrence, but no firm bid, and Forest's top bid for Buchanan was no more than about £1.25m upfront. 

I'm not sure there was enough substance there to compel Derby to sell, and not enough to guarantee even the due payment to Arsenal. 

[PistoldPete]

10 hours ago, vonwright said:

I'm not sure you can say the 'historic chain of events' will be irrelevant. It will be up to us to prove that COVID was the proximate cause of a forced administration. The EFL will argue that our COVID losses alone were not sufficient to force us into administration, that they at most exacerbated the losses and debts we recklessly incurred, and that that behaviour ('normal business risks') was the effective cause. A proximate cause isn't just the most recent contributory factor, and since this will come down to interpreting the rule book anyway, the EFL's wording is pretty clear: we will need to prove it was the sole cause of our (forced) administration.I  think we will fail, although a) I'm not a lawyer, and b) I fully accept it would be an interesting case.

On the other point, the Wigan case suggests the EFL will expect some explanation of why these specific COVID losses necessitated administration, above and beyond Mel just deciding he'd had enough. And the fact he'd willingly racked up bigger losses pre-COVID does seem relevant there. The EFL explicitly talked about how owners getting bored of losing money was sad, but their choice, and nothing to do with the FM clause.

 

I wouldn't go so far as to say that historic chain of events is irrelevant, you do need to look at the pattern.

 

If our historic overspending had put us in such a weakened state that admin would have been inevitable anyway then we would lose the case.     

But we carried on trading for 18months after the pandemic started so I don't think that it would be seen that way. The covid losses in revenue alone have been £20 million plus and continuing at £1million per month, pus the effect on player valuations , PPS valuation (if that is in the mix for a sale), and the prospects of a sale of the club . All a pretty massive effect all told.

Mel's high spending days were clearly over, the wage bill was already being slashed  before the pandemic, and he was looking to sell the club. Our spending is now below pre covid revenues of £30 million per annum so if not for covid we would now be profitable and certainly sustainable. 

But you are right on the second point, EFL will no doubt try and say it was  Mel's fault for giving up. But it isn't like the Wigan case where the owner on a whim gave up after a few days. Mel had said he would continue to fund the club until a buyer was found.. and he did so  for a full two years, but no buyer could be found (exacerbated again by the covid situation) .   

Whether an independent panel  would take the view that an owner  benefactor should be expected to sell all his family wealth in order to avoid administration, I don't know. I would hope not, as it would  seem vey harsh. 

 

 

 

   

 

 

[kevinhectoring]

13 hours ago, PistoldPete said:

I don't think we have a good answer to the question why COVID losses were entirely responsible for forcing us into administration,

I think you’ve used these words because the rule requires the force majeure to be ‘solely’ responsible for the insolvency event. 

I don’t think we’d need to show there was no other contributing factor (though arguably this is what the rule says)

Edited October 12, 2021 by kevinhectoring

[DCFC27]

Surely if Wigan didn’t get theirs overturned, we have no chance. They were put in admin in the middle of the start of the pandemic and still given a 12 point deduction. Their owners did leave them very soon and without trying to keep them a float.

Maybe our argument will lie on trying to persuade the commission Mel tried everything to keep the club  afloat throughout covid but eventually failed as he could not sustain the losses. 

Interestingly, the administrators seem as confident in the EFLs procedures as Mel was. I am no fan of Mel but some of the points he raised about the EFL weren’t without merit. Still a Bamford though. 
 

[DCFC27]

34 minutes ago, PistoldPete said:

I wouldn't go so far as to say that historic chain of events is irrelevant, you do need to look at the pattern.

 

If our historic overspending had put us in such a weakened state that admin would have been inevitable anyway then we would lose the case.     

But we carried on trading for 18months after the pandemic started so I don't think that it would be seen that way. The covid losses in revenue alone have been £20 million plus and continuing at £1million per month, pus the effect on player valuations , PPS valuation (if that is in the mix for a sale), and the prospects of a sale of the club . All a pretty massive effect all told.

Mel's high spending days were clearly over, the wage bill was already being slashed  before the pandemic, and he was looking to sell the club. Our spending is now below pre covid revenues of £30 million per annum so if not for covid we would now be profitable and certainly sustainable. 

But you are right on the second point, EFL will no doubt try and say it was  Mel's fault for giving up. But it isn't like the Wigan case where the owner on a whim gave up after a few days. Mel had said he would continue to fund the club until a buyer was found.. and he did so  for a full two years, but no buyer could be found (exacerbated again by the covid situation) .   

Whether an independent panel  would take the view that an owner  benefactor should be expected to sell all his family wealth in order to avoid administration, I don't know. I would hope not, as it would  seem vey harsh. 

 

 

 

   

 

 

I think the EFL will point to:

 

- not paying wages on time in Jan 2019 (prior to covid) 

- Losses in each year up to covid (apart from the year we sold our stadium). 

- Breaking  P&S

- Selling our stadium before covid 

- borrowing from MSD prior to covid

Clearly in hindsight the club has been run on a month by month basis, just keeping its head above water. There doesn’t seem to have been any saving for a rainy day or decisions made with a thought to “what happens if we get relegated?” “Or what happens if we have a bad season and our revenue drops?” 
 

The EFL can label that and say, covid was the straw that broke the camels back. 

[PistoldPete]

5 minutes ago, DCFC27 said:

Surely if Wigan didn’t get theirs overturned, we have no chance. They were put in admin in the middle of the start of the pandemic and still given a 12 point deduction. Their owners did leave them very soon and without trying to keep them a float.

Maybe our argument will lie on trying to persuade the commission Mel tried everything to keep the club  afloat throughout covid but eventually failed as he could not sustain the losses. 

Interestingly, the administrators seem as confident in the EFLs procedures as Mel was. I am no fan of Mel but some of the points he raised about the EFL weren’t without merit. Still a Bamford though. 
 

As many people have said , our case is much stronger than Wigans precisely because we went into administration 18 months after covid started its effect so the cumulative losses due to covid had built up to over £20 million.. arguably much more than that when you factor in the effect on player valuations etc, as Stoke are trying to do. Wigan packed in after only three months.

 

Also their owner filed for administration days after taking ownership which hardly helped Wigan's case at all. 

[PistoldPete]

1 minute ago, DCFC27 said:

I think the EFL will point to:

 

- not paying wages on time in Jan 2019 (prior to covid) 

- Losses in each year up to covid (apart from the year we sold our stadium). 

- Breaking  P&S

- Selling our stadium before covid 

- borrowing from MSD prior to covid

Clearly in hindsight the club has been run on a month by month basis, just keeping its head above water. There doesn’t seem to have been any saving for a rainy day or decisions made with a thought to “what happens if we get relegated?” “Or what happens if we have a bad season and our revenue drops?” 
 

The EFL can label that and say, covid was the straw that broke the camels back. 

A £20 million loss of revenue is not a "straw", nor is the collapse of possible sales of the club, or collapse in an effective transfer market for players below Premier League level.

 

And as I have said many times the historic losses are not really relevant unless it can be shown that admin was inevitable anyway even without covid, which given pattern of reducing spending, and Mel's past forbrbearance  I don't think it was.  

[Mostyn6]

2 hours ago, Ghost of Clough said:

There were confirmed bids for Buchanan and Lawrence 

Was the combined total of bids enough to “see us through to the point where we avoid administration”?

[Mostyn6]

42 minutes ago, DCFC27 said:

Surely if Wigan didn’t get theirs overturned, we have no chance. They were put in admin in the middle of the start of the pandemic and still given a 12 point deduction. Their owners did leave them very soon and without trying to keep them a float.

Maybe our argument will lie on trying to persuade the commission Mel tried everything to keep the club  afloat throughout covid but eventually failed as he could not sustain the losses. 

Interestingly, the administrators seem as confident in the EFLs procedures as Mel was. I am no fan of Mel but some of the points he raised about the EFL weren’t without merit. Still a Bamford though. 
 

Wigan’s then new owner had a bet on them being relegated. The named owner was a fictitious person who didnt exist. They’d only been affected by a handful of games without spectators. Their gate receipts were down already due to spectators disinterest. 
 

Derby can establish a pattern of relying on turnover, topped up by benefactor. The turnover was depleted. 

[sage]

2 hours ago, Ghost of Clough said:

There were confirmed bids for Buchanan and Lawrence 

Not selling Lawrence at the start of his last year of contract when he accounts for 12% of our players wage bill is insane, bearing in mind we went  into administration weeks later.  

[Gaspode]

14 minutes ago, sage said:

Not selling Lawrence at the start of his last year of contract when he accounts for 12% of our players wage bill is insane, bearing in mind we went  into administration weeks later.  

You can only sell a player if there is genuine interest in the player at a price that makes it worthwhile - he's hardly pulled up any trees while he's been here and he's also shown the world that he has off-field issues that he struggles to cope with. Maybe the bid (if there really was a bid) was so low that the club decided it made more sense to hang onto him (particularly as we were already under an embargo that may have made replacing him almost impossible.....)

[Crewton]

16 minutes ago, sage said:

Not selling Lawrence at the start of his last year of contract when he accounts for 12% of our players wage bill is insane, bearing in mind we went  into administration weeks later.  

There's absolutely no evidence that I can find that WBA actually put a formal bid in for Lawrence, or even made an enquiry. One report of "interest" in the Mail, nothing further.

I guess we could have touted him around, but simply getting him off the wage bill wouldn't make up for £20M loss of revenue.

[sage]

1 minute ago, Crewton said:

There's absolutely no evidence that I can find that WBA actually put a formal bid in for Lawrence, or even made an enquiry. One report of "interest" in the Mail, nothing further.

I guess we could have touted him around, but simply getting him off the wage bill wouldn't make up for £20M loss of revenue.

My comment was based on another posters comment on a bid of £1m. If we turned that down and went into admin weeks later then that is financially reckless and the kind of thing that could see our appeal thrown out.  

We certainly turned down £2m for Buchanan when we had 2 other left backs. We did that 2 to 3 weeks before going into admin. 

[TuffLuff]

To be honest I think we might get the 12 points reduced to -6 and it makes a bit of sense to do so.

-The EFL get to keep the -9 + the 3 suspended which is the strong punishment and waives off Wycombe and Boro from further action against Derby or the EFL.

-If we get it deduced to -6 then we just about remain competitive in the league, we have something to play for.

I’m not basing it on anything, but it is the cleanest solution to which everyone can then move on.

Edited October 12, 2021 by TuffLuff