The Administration Thread

[Elwood P Dowd]

23 minutes ago, Half Fan Half Biscuit said:

Totally confused by all this.

In a recent update didn't one of the MPs say the stadium wasn't the issue?

Don't think Quantuma would make good estate agents. Many house put on the market are advertised at "offers over £x".

Couldn't they have told bidders the base price was £50m including stadium - don't bother if you're not going to come in with a figure less than that? Would have saved a lot of time and effort (and admin fees).

And wasn't the original Binnie bid near that anyway in that they were prepared to lease the stadium and sort it out later?

And didn't they have someone lined up on 24 December some 3 months ago so why are the farting around still trying to get acceptable bids? 

I agree it is all very confusing and is not helped by Qs statements

[Stive Pesley]

There do appear to be 3 outstanding charges/loans against the club

https://find-and-update.company-information.service.gov.uk/company/00049139/charges

The first one from August 2020 is against the ground

The second one from October 2020 is against the ground PLUS the academy

The third one appears to have been taken out by Quantuma in November 2021

 

God knows what this all means, but it's unclear to me where the loan amounts are officially stated (if anywhere). People seem pretty convinced they know the figures, but are they just repeating hearsay?

 

[ollycutts1982]

I think it’s quite clear that Q have misread the room at every turn leading them now to be in a very precarious position. I honestly don’t think we are any further on to naming a PB than we were in Jan which is massively worrying. 

[Jimbo Ram]

6 minutes ago, Elwood P Dowd said:

I agree it is all very confusing and is not helped by Qs statements

Binnies bid 30 mill including the stadium didn’t they?

[Eatonram]

1 minute ago, Jimbo Ram said:

Binnies bid 30 mill including the stadium didn’t they?

I recall 28m without the stadium (they described this as the "asking price) followed by an increase to 30m but they expected the stadium for the extra 2m. Make of that what you will.

[vonwright]

47 minutes ago, Stive Pesley said:

Absolutely - and Ashley/Appleby are business men with zero sentiment for the Rams. They will walk away if the figures don't add up, and they won't shed a tear. The fact Mel does have some sentiment is  their gambit I believe

 

It's hardly even a gambit: they are looking at the club and saying it just isn't worth anything like £30m-£35m if they then have to pay an extra £20m for the stadium. It feels from the Q statement that they may be struggling to get a formal bid above the level needed to keep our golden ticket, let alone avoid the 15 point penalty. 

Mel Morris needs to understand that he isn't playing poker here, and this isn't a tough business negotiation. This is a rescue mission. Unless he gifts the stadium and settles his debts with MSD himself, it seems very likely a viable sale won't be possible. Derby will be liquidated.

If he genuinely can't afford that, we are in very deep trouble. If he can - but doesn't do it - then he should at least be aware that he will be remembered by a city as the man who killed their football club. And no, this is not a request for charity. It is a request that he settles his bill before he leaves the table.

 

[PistoldPete]

12 minutes ago, Stive Pesley said:

There do appear to be 3 outstanding charges/loans against the club

https://find-and-update.company-information.service.gov.uk/company/00049139/charges

The first one from August 2020 is against the ground

The second one from October 2020 is against the ground PLUS the academy

The third one appears to have been taken out by Quantuma in November 2021

 

God knows what this all means, but it's unclear to me where the loan amounts are officially stated (if anywhere). People seem pretty convinced they know the figures, but are they just repeating hearsay?

 

It means MSD has us by the short and curlies and that needs sorting by someone soon.

[Jimbo Ram]

6 minutes ago, Eatonram said:

I recall 28m without the stadium (they described this as the "asking price) followed by an increase to 30m but they expected the stadium for the extra 2m. Make of that what you will.

Exactly, nowhere near 50 mill.

[Eatonram]

No matter what the various scenarios are, it is hard to see how liquidation could possibly be a good out come for any of the main players.

1 MM will lose a fortune

2 HMRC will lose a fortune

3 MSD will be left owning a stadium/training ground with no Tennant.

4 Other creditors lose a fortune

5 EFL reputation as a governing body further destroyed

6 Football as a whole loses DCFC, a founder member, likely to hasten structural change even to the PL whether they like it or not.

 

There is not an outcome for any stakeholder that is worse than liquidation, so for this reason alone, I have hope.

[StarterForTen]

18 minutes ago, vonwright said:

It's hardly even a gambit: they are looking at the club and saying it just isn't worth anything like £30m-£35m if they then have to pay an extra £20m for the stadium. It feels from the Q statement that they may be struggling to get a formal bid above the level needed to keep our golden ticket, let alone avoid the 15 point penalty. 

Mel Morris needs to understand that he isn't playing poker here, and this isn't a tough business negotiation. This is a rescue mission. Unless he gifts the stadium and settles his debts with MSD himself, it seems very likely a viable sale won't be possible. Derby will be liquidated.

If he genuinely can't afford that, we are in very deep trouble. If he can - but doesn't do it - then he should at least be aware that he will be remembered by a city as the man who killed their football club. And no, this is not a request for charity. It is a request that he settles his bill before he leaves the table.

 

Beautifully written. 

[Gaspode]

4 minutes ago, Eatonram said:

No matter what the various scenarios are, it is hard to see how liquidation could possibly be a good out come for any of the main players.

1 MM will lose a fortune

2 HMRC will lose a fortune

3 MSD will be left owning a stadium/training ground with no Tennant.

4 Other creditors lose a fortune

5 EFL reputation as a governing body further destroyed

6 Football as a whole loses DCFC, a founder member, likely to hasten structural change even to the PL whether they like it or not.

 

There is not an outcome for any stakeholder that is worse than liquidation, so for this reason alone, I have hope.

The problem with this is that they will all play the blame game while the club disappears into oblivion- not sure any of the people involved has the balls to do what's needed to find a solution - and Q have proven themselves to be completely ineffective.....

The club becomes less attractive by the day as we slip towards relegation and the players get nearer to the end of their contracts. I'm genuinely concerned that we are no longer saleable - there's simply too much cost and too little value....

[duncanjwitham]

13 minutes ago, Big Trav said:

If you go back in time. You will find articles about the MSD loans to Derby County LTD. It was secured strictly against the training ground only. Mel used a loan to buy the stadium originally from That dodgy Henry Gabsy and then later took out a loan from MSD which was secured against the stadium. A stadium NOT linked to derby county at all. All in this article ahttps://amp.theguardian.com/football/2021/feb/25/derby-takeover-silence-and-mounting-debts-how-did-it-come-to-this

Right, having checked companies house in detail, this is my understanding of the situation (not an accountant etc etc).  There are 3 "loans" in play:

• Rams Investment Ltd, purely related to the stadium. Taken out in November 2019, cleared in October 2021.
• MSD, linked to *both* DCFC and the stadium. Taken August 2020, still outstanding.
• MSD, purely DCFC related, secured against the training ground. Taken October 2020, still outstanding.

The first MSD loan is secured against both DCFC assets and the stadium. It is a club loan (not a personal Morris one), and presumably was used to provide funding during lockdown.  The second MSD loan is basically just an extension of the first one - you can see Supplemental Debenture listed on it.  We extended the loan and added in the training ground as additional security.  The club is on the hock for the collective MSD loans, and we know their value (as of November 2021) was £20m as it's in the admins statement of affairs.  Morris has no personal loan from MSD (linked to the stadium anyway), other than offering up the stadium as security for the club's loan.

The Rams Investment Ltd loan (we have no idea of the value) was taken out over a year after the stadium was purchased, and cleared at some point before October 2021.  We don't know what it was for, but it seems unlikely it was to buy the stadium, given it was a year after the fact.  It's also a bit weird, because both this loan and the MSD one contain negative pledges - which means that you can't also use that asset as security for something else.  So it seems strange that either party would accept the MSD loan if RIL still had a major charge against the stadium.  The most likely explanation seems to be that the loan was cleared a long time ago but just not updated on companies house etc, which fits with what the article says.  But either way, it was cleared at least 6 months ago.

The accepted wisdom (and this was literally stated on Radio Derby yesterday morning, that's how widespread it is) is that Morris wants ~£22m for the stadium and will use that to clear the outstanding MSD loans and then hand the stadium over.  If you have any evidence that that isn't true, then now is the time to post it.  Because if you are claiming that paying Morris £22m for the stadium will not clear the outstanding £20m+ that the club owes MSD, then that fundamentally changes a lot of stuff.

[strawhillram]

2 hours ago, jono said:

They do both in Stoke already 

 

27 minutes ago, Eatonram said:

I recall 28m without the stadium (they described this as the "asking price) followed by an increase to 30m but they expected the stadium for the extra 2m. Make of that what you will.

It was probably £30m all in. And Quantuma would decide how it  as used to pay HMRC, creditors and how much to get the stadium off MM (the stadium is not actually in their remit as administrator)

 if £22m went to MM to clear the loan on the stadium then only leaves £8m for the rest of the debt and therein lies the problem with the golden ticket.

Q’s task is to get best deal for the creditors, so If £28m is used to clear the debt then MM would get £2m to clear the stadium loan. MM would have to pay the other £18m himself

[RoyMac5]

12 minutes ago, duncanjwitham said:

Right, having checked companies house in detail, this is my understanding of the situation (not an accountant etc etc).  There are 3 "loans" in play:

Rams Investment Ltd, purely related to the stadium. Taken out in November 2019, cleared in October 2021.

MSD, linked to *both* DCFC and the stadium. Taken August 2020, still outstanding.

MSD, purely DCFC related, secured against the training ground. Taken October 2020, still outstanding.

...

The accepted wisdom (and this was literally stated on Radio Derby yesterday morning, that's how widespread it is) is that Morris wants ~£22m for the stadium and will use that to clear the outstanding MSD loans and then hand the stadium over.  If you have any evidence that that isn't true, then now is the time to post it.  Because if you are claiming that paying Morris £22m for the stadium will not clear the outstanding £20m+ that the club owes MSD, then that fundamentally changes a lot of stuff.

So are the MSD loans 'football debts' and if not what happens if its not cleared?

Edited April 1, 2022 by RoyMac5

[i-Ram]

58 minutes ago, Tombo said:

Your response made me smile Tombo. Not seen the image before. Not sure that was what caused the reaction though; I think it was more likely the fact that after giving it large, you have absolutely nothing to back it up. 

[duncanjwitham]

1 minute ago, RoyMac5 said:

So is the MSD loan a 'football debt' and if not what happens if its not cleared?

It's definitely not a football debt (those are literally just stuff owed to other football clubs, players, coaches, managers etc), but it's a secured debt (against the stadium, training ground and literally everything else the club owns).  So if we just don't pay it, MSD get to repossess as much stuff as they can, until they've got enough to cover what they're owed.  There's no prospect of paying 25p in the £1 or anything either, again they'll just repossesses stuff until they get 100%.

So all the talk about Morris just giving the stadium back needs a bit more nuance.  There's no point him giving it back if the MSD debt isn't cleared at the same time (by one party or another).

(Not an accountant etc...)

[EnigmaRam]

46 minutes ago, Eatonram said:

No matter what the various scenarios are, it is hard to see how liquidation could possibly be a good out come for any of the main players.

1 MM will lose a fortune

2 HMRC will lose a fortune

3 MSD will be left owning a stadium/training ground with no Tennant.

4 Other creditors lose a fortune

5 EFL reputation as a governing body further destroyed

6 Football as a whole loses DCFC, a founder member, likely to hasten structural change even to the PL whether they like it or not.

 

There is not an outcome for any stakeholder that is worse than liquidation, so for this reason alone, I have hope.

There is for anyone wishing to get it all for a lot less than circa £50 mil. 

[DJAY]

30 minutes ago, duncanjwitham said:

The Rams Investment Ltd loan (we have no idea of the value) was taken out over a year after the stadium was purchased, and cleared at some point before October 2021. 

Wasn't this around the time Henry Gabay was mentioned? I assume it was something to do with that. We were told it got paid off pretty quickly.

[duncanjwitham]

Just now, DJAY said:

Wasn't this around the time Henry Gabay was mentioned? I assume it was something to do with that. We were told it got paid off pretty quickly.

Yeah, it may well have been to do with that. Like I said, the most likely explanation I can see is that the charge was actually cleared a long time ago, and only updated recently on companies house.

[RipleyRich]

53 minutes ago, Eatonram said:

No matter what the various scenarios are, it is hard to see how liquidation could possibly be a good out come for any of the main players.

1 MM will lose a fortune

2 HMRC will lose a fortune

3 MSD will be left owning a stadium/training ground with no Tennant.

4 Other creditors lose a fortune

5 EFL reputation as a governing body further destroyed

6 Football as a whole loses DCFC, a founder member, likely to hasten structural change even to the PL whether they like it or not.

 

There is not an outcome for any stakeholder that is worse than liquidation, so for this reason alone, I have hope.

The way I see that is this:

1. The max MM can lose is £20m. That applies if he either gives the Stadium away to effect a sale of the club, or, in the event of liquidation he settles the loan but retains ownership of the "assett"

2. HMRC forced a rule change to stop Football Clubs using administration to avoid/reduce tax bills. I genuinely believe they will stick it out for either a bigger settlement than 25% or be prepared to forego a max £7.5m to drive home a message to the Football World.

3. I cannot imagine that MSD secured a £20m loan against an asset that would not have sufficient residual value in the worst case scenario. They surely are not that niaive? I am convinced they would have done due diligence and have a back up plan for redevelopment or similar.

4. If the preferential creditors cannot be satisfied that becomes an inevitable fact.

5. EFL will quite rightly lay the blame at mismanagement by the clubs owner and Directors.

6. Within a short space of time there will only be Derby County fans and Forest Fans that will truly miss DCFC in the long term. Unfortunately DCFC do not have the financial necessity to the EFL that Rangers did to the SFA.