The Administration Thread

[Half Fan Half Biscuit]

Haven't read through the terms of the various charges so may be on the wrong track but . . .

 

Hasn't the Club going into admin effectively crystallised the fixed charge on the stadium so this is effectively under the control of MSD?

If the stadium is under the control of MSD, Mel can't do anything with the stadium without MSD's approval.

 

 

[Dean (hick) Saunders]

58 minutes ago, atherstoneram said:

Don't think there is a timeframe as such but if we are still in administration during the closed season when the EFL ask the administrators for proof that we can complete next season, which is looking unlikely, then the EFL can expel us from the league.

[Rev]

3 minutes ago, Half Fan Half Biscuit said:

Haven't read through the terms of the various charges so may be on the wrong track but . . .

 

Hasn't the Club going into admin effectively crystallised the fixed charge on the stadium so this is effectively under the control of MSD?

If the stadium is under the control of MSD, Mel can't do anything with the stadium without MSD's approval.

 

 

For all we know, Mel could still be meeting the repayments on the ground, after all he owns it.

[europia]

52 minutes ago, atherstoneram said:

Don't think there is a timeframe as such but if we are still in administration during the closed season when the EFL ask the administrators for proof that we can complete next season, which is looking unlikely, then the EFL can expel us from the league.

Yes exactly. As soon as there are no fixture fulfilment issues for the EFL to be concerned with, they can make a decision  based purely on finances. Despite accusations to the contrary, I actually don't think the EFL want to preside over the demise of DCFC. However that decision will need to be taken if no one is willing to buy the club, for what now seems to be an overinflated valuation (due to the well documented 'eye watering' amount of debt, plus the cost of purchasing PP). 

[Gee SCREAMER !!]

2 minutes ago, Rev said:

For all we know, Mel could still be meeting the repayments on the ground, after all he owns it.

Probably or he defaults.  However, despite it being his issue and asset to lose he wants any new buyer to cover the last 6 months payments by adding back rent to the list.

[Half Fan Half Biscuit]

10 minutes ago, Rev said:

For all we know, Mel could still be meeting the repayments on the ground, after all he owns it.

But that's the point - under the terms of a fixed charge the original owner has no control over the asset once the charge is enforced.

And a fixed charge has preference over a floating charge.

The floating charge MSD have is there to mop up any shortfall should the amount raised from selling the assets subject to the fixed charge not be enough the pay the lender off.

So if bidders are only prepared to offer £2m for the ground (as in the case of Binnies), the remaining £20m (and rising) owed to MSD would surely have to come out of the other money offered, leaving peanuts for HMRC after football creditors have been paid and sod all for non-preferential creditors. 

Edited April 1, 2022 by Half Fan Half Biscuit

[Mucker1884]

5 hours ago, StrawHillRam said:

To quote Debbie Harry and Blondie -  One way or another I think we are getting close to the end of this debacle. 
No idea what the end looks like though

 

I think you'll find it was actually...

One way, or another, I think we're getting,
I think we're getting, getting, getting, getting,

One way, or another
It's closer, closer, closer, closer

erm... Something, something end, something debacle.

 

#choon! 

[Sparkle]

1 hour ago, Carl Sagan said:

I think there's a maximum limit of 18 months before a club is expelled from the EFL. And you can't start 2 successive seasons in administration, but we just missed that so it's possible we can still begin next season in Admin with Quantuma at the helm.

There’s no money though so we wouldn’t get past the summer 

[PistoldPete]

1 minute ago, Sparkle said:

There’s no money though so we wouldn’t get past the summer 

If we sell season tickets for next season there will be money. GoC says we are due £7m from EFL before the summer. So why wouldn't we get past the summer?

[Sparkle]

2 minutes ago, PistoldPete said:

If we sell season tickets for next season there will be money. GoC says we are due £7m from EFL before the summer. So why wouldn't we get past the summer?

Well I am confident that I wouldn’t be purchasing a season ticket if the club was under administration and I am probably not alone in that. In terms of being due £7 million by the EFL well they haven’t exactly handed over the sky TV money have they?

[Rev]

58 minutes ago, Half Fan Half Biscuit said:

But that's the point - under the terms of a fixed charge the original owner has no control over the asset once the charge is enforced.

And a fixed charge has preference over a floating charge.

The floating charge MSD have is there to mop up any shortfall should the amount raised from selling the assets subject to the fixed charge not be enough the pay the lender off.

So if bidders are only prepared to offer £2m for the ground (as in the case of Binnies), the remaining £20m (and rising) owed to MSD would surely have to come out of the other money offered, leaving peanuts for HMRC after football creditors have been paid and sod all for non-preferential creditors. 

I'm not entirely sure what you're trying to say here, no surprise as I'm not an accountant or insolvency lawyer, so bear with me as I try to understand!

I've assumed the fixed charge over PP is against the stadium owning company, wholly owned by Mel Morris, and not part of this insolvency. As far as I know, that company hasn't defaulted on any repayments due, so the charge hasn't been invoked.

Are you saying that the fixed charge on the stadium is the company that owns Derby County's problem, rather than the Mel Morris owned company that owns the ground?

If so, that would suggest you can borrow money to purchase an asset from a company, but let the company you've bought the asset from be responsible if you don't pay up. Surely that's not the case?

I'm not being arsey by asking these questions, just looking to better understand the obstacles to a deal at this time.

[kevinhectoring]

2 hours ago, atherstoneram said:

They can't sell just for any price offered.

If it exceeds the fire sale value on liquidation, yes they can 

[B4ev6is]

36 minutes ago, Sparkle said:

Well I am confident that I wouldn’t be purchasing a season ticket if the club was under administration and I am probably not alone in that. In terms of being due £7 million by the EFL well they haven’t exactly handed over the sky TV money have they?

I  buy one tomorrow if I could as derby need our money and our help.

[kevinhectoring]

7 minutes ago, Rev said:

I'm not entirely sure what you're trying to say here, no surprise as I'm not an accountant or insolvency lawyer, so bear with me as I try to understand!

I've assumed the fixed charge over PP is against the stadium owning company, wholly owned by Mel Morris, and not part of this insolvency. As far as I know, that company hasn't defaulted on any repayments due, so the charge hasn't been invoked.

Are you saying that the fixed charge on the stadium is the company that owns Derby County's problem, rather than the Mel Morris owned company that owns the ground?

If so, that would suggest you can borrow money to purchase an asset from a company, but let the company you've bought the asset from be responsible if you don't pay up. Surely that's not the case?

I'm not being arsey by asking these questions, just looking to better understand the obstacles to a deal at this time.

The 202 charges are enforceable for any number of reasons, unless the defaults have been waived by MSD  (unlikely)    
 

The big question is whether 202 should have been put into administration. 

[Rev]

1 minute ago, kevinhectoring said:

The 202 charges are enforceable for any number of reasons, unless the defaults have been waived by MSD  (unlikely)    
 

The big question is whether 202 should have been put into administration. 

I assume 202 is the ground owning company? 

If so, how could the charges be enforced if, and it's a big if, the payments were up to date?

[MaltRam]

8 minutes ago, B4ev6is said:

I  buy one tomorrow if I could as derby need our money and our help.

Me too.

[Albert]

What a complicated omnishambles Mel has created. 

I honestly can't believe these are even discussions we're needing to have on here. How did it ever get to this point? 

Mel took a club that was 'boring', but financially secure and improving season on season, and burned all that to choke repeatedly. Instead of accepting his financial mistakes in all this, he's decided to burn whatever legacy he could claim, and destroy the club. Even if he had some honour and saved the club now, by accepting whatever loss it would take to get a sale to a new party to happen, the damage is already done. 

We should have been the writing on the wall when he sold the stadium to himself, the level of dodgy involved was ridiculous, and was always a risk of coming to a head like this. The ball is still in his court for the club to survive, but it could take a decade for us to overcome this damage. 

[Guest]

42 minutes ago, PistoldPete said:

If we sell season tickets for next season there will be money. GoC says we are due £7m from EFL before the summer. So why wouldn't we get past the summer?

Because the sums you are talking about would probably not convince the EFL that they were sufficient to ensure that the club could fulfil its fixture list next season. Who knows now how many season tickets we can sell for a start given the uncertainty surrounding our future? The reality now is we are taken over or we go into liquidation. Our gambling habits of the last seven seasons came to an end when Mel's folly was finally exposed. It's not the fault of the fanbase but until this is resolved, DCFC is 'high risk.' 

No, it's even worse than that, it's a 'wholly unacceptable high risk' without new owners and an agreed business plan in place as far as the EFL is concerned. That is the reality and that is why from our point of view resolution of our predicament is now critical. Otherwise, it's the end of DCFC as we know it. We as fans need to see that reality and stop clutching at straws.

[kevinhectoring]

13 minutes ago, Rev said:

I assume 202 is the ground owning company? 

If so, how could the charges be enforced if, and it's a big if, the payments were up to date?

Defaults all over the shop

- tax defaults by a guarantor(DCFC)

- a guarantor is in administration 

- a guarantor is insolvent 

- borrower insolvent (probably) 

- a guarantor subject to major litigation and regulatory proceedings 

etc etc 

default is not limited  to payment default - far from it 

[Rev]

9 minutes ago, kevinhectoring said:

Defaults all over the shop

- tax defaults by a guarantor(DCFC)

- a guarantor is in administration 

- a guarantor is insolvent 

- borrower insolvent (probably) 

- a guarantor subject to major litigation and regulatory proceedings 

etc etc 

default is not limited  to payment default - far from it 

That's a pretty bleak picture you paint, are those defaults guaranteed, even if payments are up to date?