The Administration Thread

[Sparkle]

1 hour ago, atherstoneram said:

That might make some think again who keep saying HMRC will accept 25% of what is owed. If they are entitled to the full amount that is what they will want.

Yet that is what they are not going to get - more of a concern to the HMRC should be the the 100% towards football creditors which they should be stopping from happening 

[RipleyRich]

3 minutes ago, duncanjwitham said:

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.

Only you as an individual can make that decision.

[rammieib]

9 hours ago, atherstoneram said:

If a bidder comes to an agreement regarding a payment plan it gets even harder if we are relegated due to less TV money,less TV coverage leads to less sponsorship money as the adverts are not reaching the figures they do in the championship. Out of contract players less likely to renew contracts so the administrators say the club is not viable going forward due to the large amount of debt to be serviced.

I think you have missed the point.

£28M - Cost to settle debts whether you're in Championship or League One.

So by that virtue - the bidder is paying £0 for the club ownership whether its in the Premier League or League One. So future income is irrelevant against the amount they are bidding for the club - because the offers are £0.

If maybe its a case of saying that a bidder will pay £20m for the Stadium if its a Champ Club or £10m if its in League One then that might make a little bit more sense. However - unless all offers are structured like that, the Admins should be making a decision on the now element, not constantly delaying the future security of the club.

[RipleyRich]

3 minutes ago, GenBr said:

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.

Yep, it`s a conundrum.

My personal opinion is that 25% is not acceptable to HMRC. As I previously mentioned, they are out to stop Football Clubs using Administration to reduce debt. 12 points is a small price to pay to lose £20m of debt.

As for a longer term repayment, yes I agree, and that is alluded to in the Morton Fraser article. The fact it`s 3 years old is irrelevant, that`s just when the landscape was changing.

However, if a longer term payment of say 75% of the debt is acceptable, it`s a huge ongoing commitment for any new owner and straight away loads the overheads. Lets say 5 years is agreed at say £4m per year (will interest be applied too?) that`s a huge additional pot of money to find for any club, but particularly if that club is now in L1 with massively reduced revenue, with a full squad to fund and £1.25m per year to rent a stadium then the business plan looks very different.

That doesn`t look like a Mike Ashley purchase to me.

[FindernRam]

Years ago I was on the fringes of negotiating a deal between two large international companies.

Stage 1: Sign an NDA to protect the usual technical and commercial sensitivities

Stage 2: Both companies had pre-baked standard forms so insisted theirs was the one to use

The main issue was which set of laws to use and secondary which dictionary to use.

Stage 3: After MONTHS of getting nowhere I recall both sides walked away!

So delays are entirely to be expected and not a sign of poor management on either side. It takes 2 (or three or 4) to Tango

[RodleyRam]

22 minutes ago, PistoldPete said:

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

You're right though, I think we could even aim for 1500, sky's the limit.

I still want my graph though

[Ram-Alf]

2 minutes ago, FindernRam said:

Years ago I was on the fringes of negotiating a deal between two large international companies.

Stage 1: Sign an NDA to protect the usual technical and commercial sensitivities

Stage 2: Both companies had pre-baked standard forms so insisted theirs was the one to use

The main issue was which set of laws to use and secondary which dictionary to use.

Stage 3: After MONTHS of getting nowhere I recall both sides walked away!

So delays are entirely to be expected and not a sign of poor management on either side. It takes 2 (or three or 4) to Tango

Until the ink is dried on the contracts nowt is done, I'm currently 3/4 down the line from selling and buying a property, Vendors can still pull out if not happy with what they're buying, Same as the PB, There's still lots of bridges to cross before the seasons out, And then it could be to late, No PB will stump up the £5m as Q have the cash to complete, League 1 beacons, Then we become a far cheaper deal and this is the pi$$er, How much do you pay for a league 1 club who've too much debt?

[ram59]

15 hours ago, atherstoneram said:

And until we know otherwise it's understandable to think that they are paying their bills, that's why they can recruit players. If it comes to the time they are not then they will have the same embargoes placed upon them.

It's nothing to do with them being able to pay their bills, it's about them being able to pay their bills whilst staying within their financial plan agreed with the EFL. A lot depends on whether there was any pay off for the old manager and how much they're paying Ince senior and his assistant. 

[Papahet]

Awfully quiet, I can't see anything happening till the summer at this rate.

[Ram-Alf]

16 minutes ago, RipleyRich said:

Yep, it`s a conundrum.

My personal opinion is that 25% is not acceptable to HMRC. As I previously mentioned, they are out to stop Football Clubs using Administration to reduce debt. 12 points is a small price to pay to lose £20m of debt.

 

Pretty sure you're not to far wrong, HMRC are known for scapping debt...not millions but billions especially since Covid, The concern will be, If they let DCFC pay 25% and I believe that has allready been agreed upon from posters on here posting that, When is the next football club going to write their HMRC debt off and go into Admin.

All EFL clubs are watching us with bated breath

[nottingram]

1 hour 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.

I would suggest that while £7.5m is not much to HMRC, it is quite a lot to the thousands of households facing a cost of living crisis while their payments to HMRC go up too, who might not appreciate them foregoing £7.5m to make a point about the one football administration we get maybe every other year.

The debt should never have been run up, but now it has I think it is HMRC’s duty to be sensible about things.

[Betty Swollocks]

I suppose that the sale of Jozwiak has made things a little easier as regards getting an acceptable price.

Rumours are that the the money from his sale was the same amount that was required to pay off Lech Poznan so therefore that is another 100% creditor off the books.

So say, if the 28 million figure was correct to satisfy all debts but Ashley or whoever only bid 26 million, the 2 million or whatever we received for Joz pays off the debt to Poznan (Football Debt) so the overall figure now drops to 26 million making Ashleys bid viable?

I guess we will find out for sure in the next days and weeks, but to me it makes no sense whatsoever to buy the club and burden it with a 15 point deduction next season for the sake of a few million quid when you are a rich as Ashley.

 

[Betty Swollocks]

18 minutes ago, Unlucky Alf said:

Pretty sure you're not to far wrong, HMRC are known for scapping debt...not millions but billions especially since Covid, The concern will be, If they let DCFC pay 25% and I believe that has allready been agreed upon from posters on here posting that, When is the next football club going to write their HMRC debt off and go into Admin.

All EFL clubs are watching us with bated breath

As a "preferred" creditor they can accept anything from 26-100%

My guess is the administrators have offered them 26% and said "well you`ve got more than the unsecured creditors at 25% therefore you are being "preferred"

I`m pretty sure that legally that would stand up too. 

[WhiteHorseRam]

35 minutes ago, FindernRam said:

So delays are entirely to be expected and not a sign of poor management on either side. It takes 2 (or three or 4) to Tango

I beg to differ. 

 

My great fear is that if someone really wanted us, they would have made it happen by now, especially since Mel seemed to clear a path through the Boro rubbish.

I really hope we aren't being purchased as the equivalent of someone's super yacht status symbol/something to do at the weekend.

Anyway, aside from that, sorry to hear your big deal fell through.

What's your next move in cornering the second-hand bicycle market in Tissington?

 

[RamBeauIV]

51 minutes ago, RipleyRich said:

Yep, it`s a conundrum.

My personal opinion is that 25% is not acceptable to HMRC. As I previously mentioned, they are out to stop Football Clubs using Administration to reduce debt. 12 points is a small price to pay to lose £20m of debt.

As for a longer term repayment, yes I agree, and that is alluded to in the Morton Fraser article. The fact it`s 3 years old is irrelevant, that`s just when the landscape was changing.

However, if a longer term payment of say 75% of the debt is acceptable, it`s a huge ongoing commitment for any new owner and straight away loads the overheads. Lets say 5 years is agreed at say £4m per year (will interest be applied too?) that`s a huge additional pot of money to find for any club, but particularly if that club is now in L1 with massively reduced revenue, with a full squad to fund and £1.25m per year to rent a stadium then the business plan looks very different.

That doesn`t look like a Mike Ashley purchase to me.

I think RipleyRich has hit the nail on the head w.r.t. HMRC, but as one of the Rammettes said (about 500 pages ago), in all likelihood, we will be paying HMRC 25% upfront on exiting administration AND then a payment plan for the next 2 years (probably £750K a month or whatever it takes).  HMRC are not going to let us off £20M+ (END OF CHAT).  Otherwise they will be setting a dangerous precedent to every other football club ("well you let Derby off £20M, so we'll do the same thank you").  I think this is why the Gibbon and the EFL were both demanding to know what sort of arrangement Q had been discussing with HMRC.

Any bidder will have to factor in some sort of payment plan with HMRC going forward over 2 (or 3 years). Keeping HMRC happy will allow the other creditors to be paid the 25% which avoids the 15-point penalty next season. Kirchner was talking about £50M including funding for the next 2 years.  That wasn't enough (to also include PP).  

Investing in Derby County is not going to produce a quick return. People also seem to be ignoring what the EFL said in their Q&A with the Rams Trust last month.  The 12-point deduction is just PART ONE of their punishment.  The Business Plan which they impose on us for the next 2 or 3 years will be designed to really hamstring us.  Look at Reading's - and they didn't go into administration (e.g. £6M cut in wage bill; 25-player limit; strict budgets; threat of 6-point deductions), so Wayne saying he wants to sign 40-players is not going to happen no matter how rich our new owner is.

We need to be pragmatic. Keep the Faith and stay up this season. Get out of administration without further point penalties. Accept that we're going to lose the likes of Lawrence and Festy this summer.  And just hope to keep our Championship status for the next 2 seasons whilst developing the youngsters and stabilising the club. That's the best way of ducking the EFL.  Realistic dreams.  ...and just hope that relegation doesn't drive the bidder(s) away. 

[Macintosh]

I wonder if the news that two players can be signed short term contract from Russia until the season end if they are from overseas is something a new owner could be looking at?

[Ram-Alf]

5 minutes ago, Betty Swollocks said:

As a "preferred" creditor they can accept anything from 26-100%

My guess is the administrators have offered them 26% and said "well you`ve got more than the unsecured creditors at 25% therefore you are being "preferred"

I`m pretty sure that legally that would stand up too. 

To be honest, As a prefered creditor they can accept anything from 0% to 100%...ie right the debt off, £28m or £7.5m is really small change, I've a family relative who makes descisions on whether to chase or right off VAT debt, All down to how much they can realistically get...something or nothing, They'll always go for something as it's better than nowt, Also they have to think of the community, Would they pull the plug on DCFC...no, So imo HMRC will settle for what they can get.

As i've said in a previous post, The 3 bidders will wait to see where we finish up, MA will want TV exposure for Sports Direct, He aint going to get a lot of publicity in League 1, So imo he'll want DCFC on the cheap, The Binnies have offered(allegedly)£28m and lease the ground, Appleby and co know what they're getting into, So a League 1 club wouldn't faze them.

WR said Q will let him know this week who the PB is, But as he said...he's heard that one before.

[ollycutts1982]

If what came out of the Ashley camp is true about it taking 12 weeks to complete a takeover then surely we can’t wait until the end of the season to announce a PB. The season ends early May. 3 months from there would take us to early August. With having only a few players still under contract how the hell could we plan a pre season and hope to be competitive going in to next season. 

[Crewton]

1 hour ago, RipleyRich said:

As for a longer term repayment, yes I agree, and that is alluded to in the Morton Fraser article. The fact it`s 3 years old is irrelevant, that`s just when the landscape was changing.

Odd that they haven't published a more recent article on the issue, isn't it? It's almost as if nothing has happened to increase the certainty in such cases. 

To be fair, your post and its conclusion has been put forward many, many times by posters holding a similar view. Everyone is waiting to see how HMRC are going to approach this issue, particularly in respect of football administrations. I keep seeing "precedent" mentioned too, which has little relevance in tax matters unless HMRC or a taxpayer is testing the legality of a particular interpretation of tax law. 

As I said before, we'll know soon enough what HMRC's approach will be and then all the speculation can end. 

[BucksRam]

1 hour ago, Papahet said:

Awfully quiet, I can't see anything happening till the summer at this rate.

I've honestly more or less stopped checking.  Constant refreshing of this forum, Twitter, NewsNow etc was doing my sanity no good whatsoever.  What will be, will be. To be fair, my main focus has been on the horrendous events in Ukraine which has been more of a distraction for me, albeit an admittedly morbid one ?