The Administration Thread

[Indy]

17 minutes ago, PistoldPete said:

And he was exactly right, I believe.

He was completely correct. And that statement also shows the EFL weren’t entirely truthful when they said that we had misled them about the method being used, implying that they had only accepted it in the past because they hadn’t understood it. It sounds like they understood it perfectly: within the rules, but carrying some risk in the future. 

[kevinhectoring]

6 hours ago, Shipley Ram said:

Yes Mel behaved in a reprehensible, but legal way with the non payment of bills. It's the way business behave but it shafted Derby county, and a whole load of local business's who may struggle with the repucussions of this. It seems when he realised they had in in for us he decided not to inject any more cash, to borrow for the running costs and not pay bills when he could get away with it. There was an easement from HMRC for Covid which he used to the full.

The way you are looking at the collection from the player is wrong he my opinion, they appear on the wage slips as deductions yes but in reality the company pays both the wages and taxes, it wasn't taking money and not forwarding it but not paying a bill. I don't think a change to the liability law as you suggest would be on the cards.

I think the cash withheld from salaries etc is technically held on trust for HMRC. So to use it as we did for cashflow was a breach of trust. Seems HMRC is lenient about this, perhaps because their position as a preferred creditor has been restored 

I think BZI was supposed to clear the HMRC arrears. When that deal finally fell apart MM tried to find another sale that would clear the debts, to no avail. The debts were accruing monthly. He realised Gibbo and EFL were in effect blocking a sale and I guess he was determined they were not going to make him keep writing cheques. Hence Q were appointed 

Not a happy story. His efforts to sell the club were hopeless and his belief that Samuelson was the guy to help him was a massive error. Whether he was morally obliged to continue to fund the club until he found a sale is debatable. 

[kevinhectoring]

5 hours ago, I know nuffin said:

Didn't think there was a rule until recently how amortization had to be done

It had to be done in accordance with FRS 102 

[kevinhectoring]

4 hours ago, jono said:

And the EFL as representatives of all clubs including Derby, had the duty to say to Boro .. you are unfairly damaging the spirit of the competition, it’s rules and acting in an unsporting manner when you have had ample opportunity to address this with us or the courts prior to Derby’s administration. .. saying they might have “put pressure on Boro or were “peed off” isn’t really substantive action from the games organisers and rule makers is it ? Instead, by staying silent they put huge pressure on Derby and Q to cave in and go away. They failed to act in a fit and proper way. … But maybe that fits with them being “disappointed” with the rulings of their arbitration committees and accepting those rulings on other matters, with as they so delightfully put it “with regret” 

What makes you think they did not say exactly that to Boro ? We’ll never know but I’d imagine they at least told him they thought his claim was without merit. Those would be private conversations 

[Van der MoodHoover]

2 hours ago, Ghost of Clough said:

The EFL's current CFO had been quoted saying soemthing along the lines of "it's acceptable, but it is a risky policy for the club to take [due to pushing the amjority of amortisation charges until the end of contracts]"

Which is economically true. But if the regulator forms the view that it is unacceptable then it has to comminicate that to the club and invite them to change going forward. 

Happens to me often in actuarial work because you are forming judgements and interpretations. 

Coming back years after, putting the club on trial and then seeking punitive punishment for what are really quite minor differences of interpretation is absolutely not regulation. 

[richinspain]

1 hour ago, kevinhectoring said:

What makes you think they did not say exactly that to Boro ? We’ll never know but I’d imagine they at least told him they thought his claim was without merit. Those would be private conversations 

They couldn't say that the claims were without merit, because according to them they weren't privy to what the actual claims were.  ?

Edited April 24, 2022 by richinspain

[kevinhectoring]

9 minutes ago, richinspain said:

They couldn't say that the claims were without merit, because according to them they weren't privy to what the actual claims were.  ?

there would have been a massive difference between their public pronouncements and what they said privately to Gibbo.  
 

[kevinhectoring]

7 hours ago, Charlie George said:

 

Was speaking to someone who knows at the game Saturday,and there are doubts about the viability of the bid. Expects Ashley to get the club.

I hope Ashley doesn’t give up, we need a back up. Was sorry to read he’s looking at other clubs

maybe it’s CK and Rooney. Or Ashley 

Take your pick 

[kevinhectoring]

3 hours ago, Ghost of Clough said:

The EFL's current CFO had been quoted saying soemthing along the lines of "it's acceptable, but it is a risky policy for the club to take [due to pushing the amjority of amortisation charges until the end of contracts]"

Not helpful if EFL officials spout nonsense - the overriding requirement is for accounts to show a true and fair view and if the policy is ‘risky’ it’s hard to see that this satisfies the test. 
 

The foolish thing MM did was adopt a policy that was at odds with what the 71 other clubs were doing. Hostage to fortune 

[jono]

8 hours ago, kevinhectoring said:

What makes you think they did not say exactly that to Boro ? We’ll never know but I’d imagine they at least told him they thought his claim was without merit. Those would be private conversations 

But they were very happy to discuss Derby’s failings in public and issue sanctions. They may well have SAID something to Boro  but they didn’t DO anything 

Are you by any chance employed by the EFL ? 

[G STAR RAM]

6 hours ago, kevinhectoring said:

Not helpful if EFL officials spout nonsense - the overriding requirement is for accounts to show a true and fair view and if the policy is ‘risky’ it’s hard to see that this satisfies the test. 
 

The foolish thing MM did was adopt a policy that was at odds with what the 71 other clubs were doing. Hostage to fortune 

It is irrelevant what the other 71 clubs were doing. Accounts have to follow FRS, not what other companies are doing.

If a players value decreases on a linear basis, it should have been very easy for the EFL to prove this, they must have had thousands of examples.

The method that DCFC chose for amortisation eas probably much more realistic than straight line amortisation. 

The only reason it was so bad for us was because our signings were awful and so many of them left for nothing at the end of their contracts.

[richinspain]

7 hours ago, kevinhectoring said:

there would have been a massive difference between their public pronouncements and what they said privately to Gibbo.  
 

Oh, I'm 100% sure of that. After all, they couldn't say in public how hard they were going to try to make an example of DCFC, and in particular Mel Morris.
However, to say that they had no knowledge of Gibson's actual claims is just ludicrous in my opinion. To repeat it several times over several months is trying to escape personal blame in my opinion. Why couldn't they know what the claims were but still feel that they should be dealt with by their procedures, even if they knew that the claims were dubious at best?
DCFC/MM are far from faultless in what has happened recently to the club, but the EFL have in no way helped us because of their own spineless actions.

[PistoldPete]

7 hours ago, kevinhectoring said:

Not helpful if EFL officials spout nonsense - the overriding requirement is for accounts to show a true and fair view and if the policy is ‘risky’ it’s hard to see that this satisfies the test. 
 

The foolish thing MM did was adopt a policy that was at odds with what the 71 other clubs were doing. Hostage to fortune 

And you know all about spouting nonsense. There is a risk that if players are not sold before the end of the contracts they could end up facing big write off in the final year. There is also a risk associated with  straight line depreciated value, which may  bear no relation to the players value. Either method was  within the rules, until EFL changed them.

What the EFL guy Denko said was spot on. And what van der Moodhoover says is spot on too, EFL should not be punishing DCFC for differences in professional opinion between third party accountants or commercial property valuers. Finance professionals like Denko and the forensic accountant on the IDC board understand this.

 

[duncanjwitham]

1 hour ago, G STAR RAM said:

It is irrelevant what the other 71 clubs were doing. Accounts have to follow FRS, not what other companies are doing.

If a players value decreases on a linear basis, it should have been very easy for the EFL to prove this, they must have had thousands of examples.

The method that DCFC chose for amortisation eas probably much more realistic than straight line amortisation. 

The only reason it was so bad for us was because our signings were awful and so many of them left for nothing at the end of their contracts.

FRS102 states that if there is a method of reliably estimating values it should be used, otherwise you should default to straight-line.  The EFL and their non-accountant-containing appeals panel decided, in their infinite wisdom, that our method of estimating values was reliable, but that we were completely wrong for using it ?‍♂️.

[Mostyn6]

Had a bizarre conversation the other day, apparently Mel was not allowed to pump any further money into the club without incurring further points penalties etc and it’s been suggested EFL forced his hand and us into Administration. Sounds far-fetched but actually I bet he couldn’t put more money in. Apparently he wasn’t allowed to pay HMRC out of his own pocket. 

[kevinhectoring]

1 hour ago, G STAR RAM said:

t is irrelevant what the other 71 clubs were doing. Accounts have to follow FRS, not what other companies are doing.

In theory you must be right. But what is appropriate in any case turns in part on what sector your in. So a panel is likely to be influenced by market practice especially if the panel lacks accountants with a strong technical background 

[roboto]

6 minutes ago, Mostyn6 said:

Had a bizarre conversation the other day, apparently Mel was not allowed to pump any further money into the club without incurring further points penalties etc and it’s been suggested EFL forced his hand and us into Administration. Sounds far-fetched but actually I bet he couldn’t put more money in. Apparently he wasn’t allowed to pay HMRC out of his own pocket. 

Straight from the horses mouth? How is Mel these days? ?

Honestly though, that doesn't seem so far fetched from what I've heard about the EFL and their feelings towards DCFC.

I work for a company within the sports industry (a product that lots of sports teams use on a regular basis) and a contact of mine used to work with the EFL and said there has been an anti-Derby stance at the top level for some time. Timing coincided with Morris taking over and challenging TV deals etc.

I'm pretty sure they're doing whatever they can to damage DCFC/Morris as much as possible. We need to reset the system and hopefully the CK takeover happens and we can wipe the slate clean and we can all move forward.

[Gee SCREAMER !!]

15 minutes ago, Mostyn6 said:

Had a bizarre conversation the other day, apparently Mel was not allowed to pump any further money into the club without incurring further points penalties etc and it’s been suggested EFL forced his hand and us into Administration. Sounds far-fetched but actually I bet he couldn’t put more money in. Apparently he wasn’t allowed to pay HMRC out of his own pocket. 

That makes no sense at all.  He wouldn't be paying more in, he'd be paying what he should have. I think you heard or saw something you shouldn't have.  Did the people who told you this look like 

 

[Gee SCREAMER !!]

10 hours ago, kevinhectoring said:

What makes you think they did not say exactly that to Boro ? We’ll never know but I’d imagine they at least told him they thought his claim was without merit. Those would be private conversations 

No chance.  They crapped their pants in case it opened the floodgates to more claims so ignored it.

[Curtains]

37 minutes ago, roboto said:

Straight from the horses mouth? How is Mel these days? ?

Honestly though, that doesn't seem so far fetched from what I've heard about the EFL and their feelings towards DCFC.

I work for a company within the sports industry (a product that lots of sports teams use on a regular basis) and a contact of mine used to work with the EFL and said there has been an anti-Derby stance at the top level for some time. Timing coincided with Morris taking over and challenging TV deals etc.

I'm pretty sure they're doing whatever they can to damage DCFC/Morris as much as possible. We need to reset the system and hopefully the CK takeover happens and we can wipe the slate clean and we can all move forward.

The EFL hate us 

They have proliferated the problem .

I think they might just have a disingenuous party to celebrate their achievements so far .

 

 

Edited April 25, 2022 by Curtains
Added