The Administration Thread

[CBX1985]

28 minutes ago, ram59 said:

Does anyone know if the 15 point deduction is a black or white scenario?

In other words we pay the minimum amount for no deduction, but £1 less would mean a 15 point penalty or is there a sliding scale based on the percentage of monies paid.

If it is the black or white scenario, surely new owners would then not try to even get close to the required amount. Why pay £19.5M when paying £5M gets you the same punishment?

Depends.  Again, if an offer was reasonable then all could agree.  Negotiation is key - the league can change its rules if the right deal is made.  

The best way would be to almost mortgage debt - i.e. spread it out over a longer time-frame, but pay in instalments.  Would prolong the pain in many ways, but creditors would get more back than otherwise and would look better.  Would be a way out for all sides - and with credible buyer, could make sense.

Perhaps the CK offer but repaid over ten rather three years, for instance - but with interest attached.

[duncanjwitham]

33 minutes ago, ram59 said:

Does anyone know if the 15 point deduction is a black or white scenario?

In other words we pay the minimum amount for no deduction, but £1 less would mean a 15 point penalty or is there a sliding scale based on the percentage of monies paid.

If it is the black or white scenario, surely new owners would then not try to even get close to the required amount. Why pay £19.5M when paying £5M gets you the same punishment?

I'm sure I remember seeing "up to 15 points" mentioned somewhere, but we can't check because nobody actually seems to have a copy of the EFL insolvency policy available.

[EnigmaRam]

34 minutes ago, Mostyn6 said:

I read somewhere that the difference in an acceptable deal, and a rejected (-15pts) deal is about £800k-£1.2m. Any further reductions in bid would mean we wouldn't be allowed to exit administration and would not get the Golden Share.

I cannot believe any potential bidder would be so short-sighted as to risk 15points and potential success for the sake of say £1m!

But if potential bidder is truly underbidding, there could well be a rejection from EFL.

 

This is the bit I don’t get. Surely the minus 15 and the golden share are 2 separate entities? Afterall, Who cares about minus 15 if we’re kicked out the league!!!

[CBX1985]

Just now, EnigmaRam said:

This is the bit I don’t get. Surely the minus 15 and the golden share are 2 separate entities? Afterall, Who cares about minus 15 if we’re kicked out the league!!!

Because bidders don't believe it.  None of them.

If we are kicked out, no one get's the money.  So the value in DCFC is that the league is bluffing and won't kick us out in such circumstances.  If that bluff is wrong and they will, we might as well accept our fate.

[Donnyram]

29 minutes ago, ariotofmyown said:

You could buy a Shaun Barker type of player for that money! Scrap the points, they are overrated. 

39 year old centre half with a re-built knee  ?

[StarterForTen]

2 minutes ago, EnigmaRam said:

This is the bit I don’t get. Surely the minus 15 and the golden share are 2 separate entities? Afterall, Who cares about minus 15 if we’re kicked out the league!!!

My understanding (though not ITK on this) is that EFL membership is lost if we fail to pay football creditors in full. If the football creditors are paid in full, but the exit from administration otherwise fails the EFL's rules (for example on the minimum terms to all non-football creditors) then a points penalty is likely.

What I am not at all sure about is what the exit rules are for preferential creditors that are not classed as football creditors (for example HMRC) but I would suggest they will fall into the same 25% (35% over three years) bracket as unsecured creditors. If that is the case, then the difference between no points penalty and a points penalty might be as much as £10m.

 

[i-Ram]

[Elwood P Dowd]

https://www.efl.com/-more/governance/efl-rules--regulations/efl-regulations/section-3-the-league/

Section 3 

12.1        If any Club becomes subject to or suffers an Insolvency Event, that Club shall be deducted 12 points.

 

12.18     The League Arbitration Panel shall have the power to:

12.18.1  confirm the deduction of 12 points; or

12.18.2  set aside the deduction of 12 points and substitute a deduction of such lower number of points as it shall deem appropriate; or

12.18.3  order that there shall be no sanction at all.

 

[Gone]

Another one gone ? Allsop to Cardiff

[duncanjwitham]

1 hour ago, StarterForTen said:

My understanding (though not ITK on this) is that EFL membership is lost if we fail to pay football creditors in full. If the football creditors are paid in full, but the exit from administration otherwise fails the EFL's rules (for example on the minimum terms to all non-football creditors) then a points penalty is likely.

What I am not at all sure about is what the exit rules are for preferential creditors that are not classed as football creditors (for example HMRC) but I would suggest they will fall into the same 25% (35% over three years) bracket as unsecured creditors. If that is the case, then the difference between no points penalty and a points penalty might be as much as £10m.

 

(Not an expert either, but my understanding is...)

HMRC are also an unsecured creditor - any creditor that doesn't have a security charge over something (which is basically everyone bar MSD in our case) is class as unsecured.  So they will need paying at 25% or 35%/3 to avoid a deduction.  What the preference does is mean they get paid earlier in the list (after MSD and the admins, I think).

I *think* it also means that they don't have to be paid at the same rate as the other unsecured creditors (since they're not in the same class).  So we could end up being forced to pay (as a made up example) 40% to HMRC (because they won't accept less), but could get away with paying 25% to the remaining unsecured creditors (barring football creditors of course).

[Ghost of Clough]

1 hour ago, Mostyn6 said:

I read somewhere that the difference in an acceptable deal, and a rejected (-15pts) deal is about £800k-£1.2m. Any further reductions in bid would mean we wouldn't be allowed to exit administration and would not get the Golden Share.

I cannot believe any potential bidder would be so short-sighted as to risk 15points and potential success for the sake of say £1m!

But if potential bidder is truly underbidding, there could well be a rejection from EFL.

 

No. The £1m difference is the difference between a 25% and 35% deal with unsecured creditors. Both result in exiting administration with no points deducted. It's only if you don't pay the minimum amount to creditors when you get the points deduction. 

I believe, we only have to pay football creditors 100% to keep our golden share. Someone has to pay MSD in full for us to keep the stadium. The rest (unsecured and Admin fees) could be 0%, still stay in the league but start on -15.

[61GT]

3 hours ago, uttoxram75 said:

This chap?

Laurence Bassini, who is looking to buy into Birmingham City, has been declared bankrupt twice and, in behaviour that wis definitely not 'shady', changed his name by deed poll after the first one. And he was banned from all football for three years, too.

Sounds like a great fit for us! ?

 

[alram]

so what has changed since kirchner "pulled out"

 

this process needs to be done quickly, every hour is vital. ok we dont need a running commentary but you would have thought there would be somebody front of the queue.

[Barney1991]

All the fuss that Ashley has done with media and his lawyers letter and he still hasn’t bid. Al the people who want Ashley he’s going to wait till he’s the last one hopefully Morgan or Appleby bid enough 

[Addingham Ram]

1 hour ago, Arsene Titman said:

Not sure I see your reasoning. If the creditors are paid in I one year, rather than over 3, then that saves the buyer 10% because they are paying creditors 25% rather than 35% of what is owed to them. If true, there is another saving available because Nixon’s article also says that administrator’s fees are negotiable ( although HMRC deal is not). Nixon is saying that the various bidders believe that the CK bid was actually too high and are looking at ways of trimming it. If the savings can be made then a points deduction should be avoided

I'm not sure that is the case.

Wasn't CK's intention to pay over 3 years, based on an initial payment by him (possibly 10% / 15%) with the balance being paid out of any income the club brought in over the first 3 years?

So CK would have probably paid less than the 25% himself, and the club would have paid the rest, no doubt strangling our expenditure until the 35% was paid in full.

[Elwood P Dowd]

I am sure when I read through the  EFL regulations some months ago the was a penalty for not paying the creditors a certain %, this is, of course, if a club were to avoid liquidation and had found a “genuine” buyer. ?

The outtake  I posted above deals with the penalties if a club goes into Liquidation.

[Ramarena]

5 hours ago, Brailsford Ram said:

Agreed and I also think that his naivety around English football could have meant that he may have been reliant on what he was hearing from Cooke and Stretford. Maybe in the end he suddenly realised that while his bid might have been worth a punt in the Championship, it was too much for a club in League One. Several members have suggested on here recently that he was paying over the odds given our projected loss of revenue.

We can’t have you talking like that about Garry Cook!

[Gaspode]

18 minutes ago, TexasRam said:

Another one gone ? Allsop to Cardiff

It's going to be death by a thousand cuts as the players we had last season are slowly taken away - absolutely hate this situation....

[kevinhectoring]

2 hours ago, RoyMac5 said:

You don't know that. If the EFL hadn't decided to block the cross class cram it wouldn't have mattered. Or if Mel had dealt with it sooner. 

You and I both know that Gibson’s intention was to ensure we were seriously damaged. Which is why he held out until after the window closed. Bye bye Jags.  

So I’ll repeat it: Singing the ‘we can stay up’ refrain at the top of his voice was not smart. That’s my only point Roy 

[Gone]

2 minutes ago, Gaspode said:

It's going to be death by a thousand cuts as the players we had last season are slowly taken away - absolutely hate this situation....

Yep we’ve been totally sold down the river by MM & Q and not to mention the time wasting charlatan from Texas