The Administration Thread

[Crewton]

12 hours ago, Eddie said:

I'm betting that "Giant meteorite" will arrive before the preferred bidder.

Well, that would certainly devalue the club further. 

[Van der MoodHoover]

3 minutes ago, Crewton said:

Well, that would certainly devalue the club further. 

I'll still be singing in the Pile of Smouldering Ash stand.... ?

[RipleyRich]

14 minutes ago, atherstoneram said:

I don't think it's the administrators who are stalling,i think the bidders are expecting the administrators selling the club now as a league 1 club and have put in derisory offers to match which doesn't go anywhere near enough to settle the bills, that wouldn't be acceptable to the administrators who have managed to arrange funds to see the season out. If we go down i can see the potential bidders walking away especially Ashley who won't get the television coverage a championship club gets.

My view is that they cannot get the debt settlement figures down to a value that make the club a viable purchase.

If HMRC stand their ground, which is likely as the rule change to make them Preferential Creditors is to essentially prevent clubs taking 12 points to reduce tax bills, then the cost to clear debt is £50m plus. Then there is a squad to invest in, plus guarantees of future funding, and I believe, requirement under EFL rules to guarantee a stadium facility for 10 years. Now that last issue of the Stadium could well put the power back into MM hands for that part of the deal.

[Crewton]

HMRC aren't getting all of their money whatever happens. No-one is going to pay that much and liquidation will give them far less than 25%. They have a decision to make when the PB is appointed. 

On the stadium, there's already an agreement in place, a long term lease, for the club to rent it from Morris' company for £1.25M a season, which covers this EFL requirement you mention (which I've never heard of before, but sounds plausible). 

[RodleyRam]

Can someone make a handy chart of the number of daily posts/pages on this topic since inception - Covid styleee?

I'm keen to know if we are on track for 1,000 pages by end of the financial year and how much Quantuma silence/meaningless statements from the EFL, lengthy discussions about specific/irrelevant clauses in the EFL handbook or pun fests it's going to take to get us over the line...

Come on Rams, we fight to the end.

[Jimbo Ram]

9 hours ago, Foreveram said:

Can you be more specific, is it imminent, 48 hours, shortly, will we be pleasantly surprised ??‍♂️

SOON

[RipleyRich]

15 minutes ago, Crewton said:

HMRC aren't getting all of their money whatever happens. No-one is going to pay that much and liquidation will give them far less than 25%. They have a decision to make when the PB is appointed. 

On the stadium, there's already an agreement in place, a long term lease, for the club to rent it from Morris' company for £1.25M a season, which covers this EFL requirement you mention (which I've never heard of before, but sounds plausible). 

25% to HMRC is roughly £7.5m. Would HMRC take a £7.5m hit to send a message out to the Football World, that never again are Clubs going to be allowed to use Administration to reduce Tax Bills?

My understanding is that is why HMRC was upgraded to Preferential Creditor status in Dec 2020.

 

I don`t think a PB will / can be named unless there is a bid that comes anywhere near achieving a CVA.

Edited March 8, 2022 by RipleyRich

[PistoldPete]

2 minutes ago, RodleyRam said:

Can someone make a handy chart of the number of daily posts/pages on this topic since inception - Covid styleee?

I'm keen to know if we are on track for 1,000 pages by end of the financial year and how much Quantuma silence/meaningless statements from the EFL, lengthy discussions about specific/irrelevant clauses in the EFL handbook or pun fests it's going to take to get us over the line...

Come on Rams, we fight to the end.

Ashley spokesman said it would be 12 weeks to complete  deal .. assuming Ashley is announced as preferred bidder, which so far neither he nor anyone else has been. So we have plenty of time to get us over 1,000 pages.

Since you mention it, Regulation 95 is the rule that required us to arbitrate with Boro.. or, according to the EFL,  be expelled from the League. So not exactly irrelevant, especially as club to club disputes are still a live topic given Barnsley's objection to Reading FFP breaches.   

 

[PistoldPete]

5 minutes ago, RipleyRich said:

25% to HMRC is roughly £7.5m. Would HMRC take a £7.5m hit to send a message out to the Football World, that never again are Clubs going to be allowed to use Administration to reduce Tax Bills?

My understanding is that is why HMRC was upgraded to Preferential Creditor status in Dec 2020.

 

I don`t think a PB will / can be named unless there is a bid that comes anywhere near achieving a CVA.

HMRC wanted preferred bidder status so that they are treated more favourably than unsecured creditors. They can still only get paid what is available from the bids that have come in. 

[Crewton]

3 minutes ago, RipleyRich said:

25% to HMRC is roughly £7.5m. Would HMRC take a £7.5m hit to send a message out to the Football World, that never again are Clubs going to be allowed to use Administration to reduce Tax Bills?

My understanding is that is why HMRC was upgraded to Preferential Creditor status in Dec 2020.

 

I don`t think a PB will / can be named unless there is a bid that comes anywhere near achieving a CVA.

They can't have what potential purchasers aren't willing to pay. They're pragmatists, not opposition supporters. They wanted the rules changed so that they would be lifted above unsecured creditors in the pecking order and could decide for themselves what was an acceptable return. Are they prepared to receive nothing on a point of principle? I don't believe so, but the speculation should be over soon. 

[Oldben]

https://www.lancs.live/sport/football/football-news/chris-kirchner-preston-derby-county-23313908

A reminder again of the Kirchner bid for Derby, that our administrators failed to capitalise on.

The reason might have been the middlesbrough/wycombe craziness but who knows.

Kirchner went public with his interest in the purchase of the Rams before withdrawing from the process in December 2021, writing in a statement: "Two weeks ago, I made a formal offer to buy the club. I believe I presented a very detailed, generous and ambitious long-term sustainable business plan. It included purchasing the stadium, future funding and maintaining the academy’s status. We improved that offer further today."

Since pulling out of the deal to buy the club, the American has sent several tweets with regards to the situation at Derby and how things unfolded.

One read: "Not misled at all… knew the rough structure. That wasn’t the problem. Problem is overall price, complexity with debts from previous owner (Mel Morris), and the stadium doesn’t make it any easier.”

The club might have been in a different position had this brought a close to the behaviour of the efl towards us.

[RipleyRich]

3 minutes ago, PistoldPete said:

HMRC wanted preferred bidder status so that they are treated more favourably than unsecured creditors. They can still only get paid what is available from the bids that have come in. 

Not my interpretation from what I have read:

https://www.morton-fraser.com/insights/hmrc-fc-1-v-0-football-creditors-fc

[i-Ram]

1 hour ago, 24Charlie said:

I see a situation where Lampard takes Everton down gets sacked and Rooney keeps us up. The pressure Everton will exert on him to take him off is will be extreme. They’ll offer him a fortune and the cash the build the squad he wants. That will be a very difficult job to turn down.

 

[Crewton]

2 minutes ago, RipleyRich said:

Not my interpretation from what I have read:

https://www.morton-fraser.com/insights/hmrc-fc-1-v-0-football-creditors-fc

That article is three years old, and is trying to second guess what the rule change means in practical terms. It isn't, in fact, a victory over the Football Creditors rule, since FCs must still be paid in full if a club wishes to exit Administration without further penalty, whilst every other class of creditor is 'free' to negotiate (albeit minority unsecured creditors have little power to decide). HMRC's response to their new status still hasn't been tested, due to the government moritorium on winding up orders during Covid. So everyone claiming that HMRC are going to play hardball are speculating, no more than that, as far as I can see. 

[RipleyRich]

3 minutes ago, Crewton said:

That article is three years old, and is trying to second guess what the rule change means in practical terms. It isn't, in fact, a victory over the Football Creditors rule, since FCs must still be paid in full if a club wishes to exit Administration without further penalty, whilst every other class of creditor is 'free' to negotiate (albeit minority unsecured creditors have little power to decide). HMRC's response to their new status still hasn't been tested, due to the government moritorium on winding up orders during Covid. So everyone claiming that HMRC are going to play hardball are speculating, no more than that, as far as I can see. 

As you say, speculation.

But based upon what I`ve read and heard, I see this as the biggest obstacle.

We know bids have been made, but for whatever reason no bid accepted / preferred bidder named. Why?

All I can see is that the bids submitted don`t satisfy the necessary requirements and/or values to move forward.

When you look into the level of debt, the assets, the complicated structure and the short term investment required to get the club moving again, the Club makes no sense as a business acquisition. (To me)

[duncanjwitham]

14 minutes ago, Oldben said:

https://www.lancs.live/sport/football/football-news/chris-kirchner-preston-derby-county-23313908

A reminder again of the Kirchner bid for Derby, that our administrators failed to capitalise on.

The reason might have been the middlesbrough/wycombe craziness but who knows.

Kirchner went public with his interest in the purchase of the Rams before withdrawing from the process in December 2021, writing in a statement: "Two weeks ago, I made a formal offer to buy the club. I believe I presented a very detailed, generous and ambitious long-term sustainable business plan. It included purchasing the stadium, future funding and maintaining the academy’s status. We improved that offer further today."

Since pulling out of the deal to buy the club, the American has sent several tweets with regards to the situation at Derby and how things unfolded.

One read: "Not misled at all… knew the rough structure. That wasn’t the problem. Problem is overall price, complexity with debts from previous owner (Mel Morris), and the stadium doesn’t make it any easier.”

The club might have been in a different position had this brought a close to the behaviour of the efl towards us.

You've basically answered your own question there - looks like Kirchner didn't want to pay what was required to settle (enough of) the debts, which presumably other bidders were (more) willing to.  And probably didn't want to deal with the stadium in a sensible way either.  It's the admins job to get the best deal they can, not sell it to the first guy to wave a bunch of tatty £5 notes in their faces.

[RodleyRam]

25 minutes ago, PistoldPete said:

Ashley spokesman said it would be 12 weeks to complete  deal .. assuming Ashley is announced as preferred bidder, which so far neither he nor anyone else has been. So we have plenty of time to get us over 1,000 pages.

Since you mention it, Regulation 95 is the rule that required us to arbitrate with Boro.. or, according to the EFL,  be expelled from the League. So not exactly irrelevant, especially as club to club disputes are still a live topic given Barnsley's objection to Reading FFP breaches.   

 

You seem like a fun guy, can we be mates?

Edited March 8, 2022 by RodleyRam

[duncanjwitham]

3 minutes ago, RipleyRich said:

We know bids have been made, but for whatever reason no bid accepted / preferred bidder named. Why?

All I can see is that the bids submitted don`t satisfy the necessary requirements and/or values to move forward.

Or we could just take the admins at their word, and accept that the bids are actually complicated documents, and they want to be absolutely clear about what is being offered (and that the creditors will accept it) before they pick one.

[GenBr]

1 hour ago, atherstoneram said:

I don't think it's the administrators who are stalling,i think the bidders are expecting the administrators selling the club now as a league 1 club and have put in derisory offers to match which doesn't go anywhere near enough to settle the bills, that wouldn't be acceptable to the administrators who have managed to arrange funds to see the season out. If we go down i can see the potential bidders walking away especially Ashley who won't get the television coverage a championship club gets.

Sorry - i can't believe you actually believe this. We've had a 21 point deduction this season and we've been under transfer embargo for years now - all bids will have been made under the assumption that we will be a league 1 team next year.

As i've said before the division we are in makes no difference to the value of the bids. The bidders aren't paying for the club as such - they are just paying off debts and they'll the minimum required regardless of what division we're in.

The administrators sole concern is to get as much money as possible to pay back to the creditors. They will accept the highest bid. They certainly won't be stringing it out to the end of the season just because they've secured funding in the bizarre hope that a new higher bid will magically appear. 

23 minutes ago, RipleyRich said:

25% to HMRC is roughly £7.5m. Would HMRC take a £7.5m hit to send a message out to the Football World, that never again are Clubs going to be allowed to use Administration to reduce Tax Bills?

My understanding is that is why HMRC was upgraded to Preferential Creditor status in Dec 2020.

 

I don`t think a PB will / can be named unless there is a bid that comes anywhere near achieving a CVA.

Its up to HMRC what they want to do, but theres nothing to say they have to accept the full payment up front. They could agree for it to be paid off over time.

If nothing is agreed then they get nothing at all - we dont own pride park, we dont own moor farm and we'll have about 6 players under contract at the end of the season, so they're not going to get anything from us selling assets off.

[PistoldPete]

5 minutes ago, RodleyRam said:

You seem like a fun guy, can we be mates?

I can do puns as well if you prefer. Anything to get us over 1000 pages.