The Football Creditor rule is explicit, simple, and solves all of Derby's issues

[The Scarlet Pimpernel]

Blimey, haven't we got an actual Barrister as a member to cut through all this?

[Day]

40 minutes ago, kevinhectoring said:

Assuming they sue on a contract I think the EFl rules would be the contract they sue on. I think you’ve said that the rule book is a series of bilateral contracts between the EFL and each club. But if that were right, then 

- why do the rules contain a provision that says that claims  between clubs under the rules need to be subject to arbitration ?

- why do the rules state in some provisions but not others that only the EFL can sue for breach? 
 

And obviously the EFl articles themselves are a contract between all the clubs (as members) because that’s what company articles are 

Can you link me to the provisions you are referring to as this may apply to other issues such as transfers between clubs where bilateral contracts would exist.

Under Financial Fair Play section which this falls under, it clearly states.

4.4   Each Club shall, at all times and in all matters within the scope of these Rules, behave with the utmost good faith both towards The League and the other Clubs (provided always that only The League shall have the right to bring any action whatsoever for any alleged breach of this requirement).  Without prejudice to the generality of the foregoing, Clubs shall not manage their affairs or submit information which is intended to seek to or take any unfair advantage in relation to the assessment of fulfilment (or non-fulfilment) of the requirements of the Rules.

https://www.efl.com/-more/governance/efl-rules--regulations/efl-regulations/appendix-5-financial-fair-play-regulations/

 

[SamUltraRam]

So is there a date set for this arbitration hearing ?

My boss is starting to wonder why my work output has dropped since Christmas & I can't tell him it's because I keep checking my phone for DCFC updates.

If I lose my job I think I'll pursue the EFL for loss of earnings

[kevinhectoring]

15 minutes ago, David said:

Can you link me to the provisions you are referring to as this may apply to other issues such as transfers between clubs where bilateral contracts would exist.

Under Financial Fair Play section which this falls under, it clearly states.

4.4   Each Club shall, at all times and in all matters within the scope of these Rules, behave with the utmost good faith both towards The League and the other Clubs (provided always that only The League shall have the right to bring any action whatsoever for any alleged breach of this requirement).  Without prejudice to the generality of the foregoing, Clubs shall not manage their affairs or submit information which is intended to seek to or take any unfair advantage in relation to the assessment of fulfilment (or non-fulfilment) of the requirements of the Rules.

https://www.efl.com/-more/governance/efl-rules--regulations/efl-regulations/appendix-5-financial-fair-play-regulations/

 

The provision you quote is a good example of what I am saying. The provision requires clubs to act in utmost good faith. The  words in brackets which say that only the EFL can sue for breach of that requirement, can only be required if there are other rule breaches which clubs are entitled to sue on 

I’d hope the outcome of this case (if it’s heard) will be: once a club is sanctioned by the EFL for FFP breach, no other club has separate rights to claim for damages. The words in brackets don’t help that argument, obviously, because of their implication. 

[Day]

Just now, kevinhectoring said:

The provision you quote is a good example of what I am saying. The provision requires clubs to act in utmost good faith. The  words in brackets which say that only the EFL can sue for breach of that requirement, can only be required if there are other rule breaches which clubs are entitled to sue on 

I’d hope the outcome of this case (if it’s heard) will be: once a club is sanctioned by the EFL for FFP breach, no other club has separate rights to claim for damages. The words in brackets don’t help that argument, obviously, because of their implication. 

I share the same hope, if the claim must be heard, however I would have to disagree that 4.4 won't help the argument and should be dismissed. 

Combined with 3.1 under Membership right at the very top of the EFL rules also shows no bilateral contracts under the membership of the league.

3.1 Membership of The League shall constitute an agreement between The League and each Club to be bound by and comply with:

https://www.efl.com/-more/governance/efl-rules--regulations/efl-regulations/section-2---membership/

Looking at the Sheff Wed decision, it also refers to the bilateral agreement between the club and the EFL, and goes on to say it exists to protect all Championship clubs, no mention of any bilateral agreement between all clubs. 

Anyhow, off to get ready to watch the game!

[Jon Bon Pony]

41 minutes ago, SamUltraRam said:

So is there a date set for this arbitration hearing ?

My boss is starting to wonder why my work output has dropped since Christmas & I can't tell him it's because I keep checking my phone for DCFC updates.

If I lose my job I think I'll pursue the EFL for loss of earnings

You'll have a better case than Wycombe at least ?

[PistoldPete]

41 minutes ago, David said:

Can you link me to the provisions you are referring to as this may apply to other issues such as transfers between clubs where bilateral contracts would exist.

Under Financial Fair Play section which this falls under, it clearly states.

4.4   Each Club shall, at all times and in all matters within the scope of these Rules, behave with the utmost good faith both towards The League and the other Clubs (provided always that only The League shall have the right to bring any action whatsoever for any alleged breach of this requirement).  Without prejudice to the generality of the foregoing, Clubs shall not manage their affairs or submit information which is intended to seek to or take any unfair advantage in relation to the assessment of fulfilment (or non-fulfilment) of the requirements of the Rules.

https://www.efl.com/-more/governance/efl-rules--regulations/efl-regulations/appendix-5-financial-fair-play-regulations/

 

I think it is very close to the smoking gun for the Boro/ Wycombe  claim..

"Utmost good faith" is quite a high bar so if Morris did anything slightly dishonest it is for EFL only to bring any action whatsoever,

We don't really know what Gibson claim is about .. other than allegation of "systematic cheating".. which is an allegation far worse than not acting in utmost good faith.  His allegation is not only false but it  also means he is not allowed to bring an action due to this rule. 

Similarly Wycombe claim.. deliberately delaying the accounts.. also a false allegation and it  also means they cannot bring an action due to this rule it seems .

So unless either have anything else up their sleeves apart from what has been disclosed publicly they are both dead in the water.

And I think you are right about the football creditor rule too David, despite what others have said. EFL may say thats not what we meant blah blah , but that is how I read it too.  

 

 
 

[kevinhectoring]

1 hour ago, SamUltraRam said:

So is there a date set for this arbitration hearing ?

My boss is starting to wonder why my work output has dropped since Christmas & I can't tell him it's because I keep checking my phone for DCFC updates.

If I lose my job I think I'll pursue the EFL for loss of earnings

Pretty clear your boss has an enforceable claim against the poison Gibbo dwarf 

[Ghost of Clough]

2 hours ago, The Scarlet Pimpernel said:

Blimey, haven't we got an actual Barrister as a member to cut through all this?

@DarkFruitsRam7 should have finished writing his exam paper and handed it over to Quantuma by now

[PistoldPete]

EFL v Sheff Wed

So Efl charged Wendies under the provision David has highlighted. They were found not guilty of this charge however.

[DarkFruitsRam7]

2 hours ago, Ghost of Clough said:

@DarkFruitsRam7 should have finished writing his exam paper and handed it over to Quantuma by now

We had to pick 3 questions out of 7. Funnily enough I skipped that one!

[PistoldPete]

13 hours ago, David said:

I share the same hope, if the claim must be heard, however I would have to disagree that 4.4 won't help the argument and should be dismissed. 

Combined with 3.1 under Membership right at the very top of the EFL rules also shows no bilateral contracts under the membership of the league.

3.1 Membership of The League shall constitute an agreement between The League and each Club to be bound by and comply with:

https://www.efl.com/-more/governance/efl-rules--regulations/efl-regulations/section-2---membership/

Looking at the Sheff Wed decision, it also refers to the bilateral agreement between the club and the EFL, and goes on to say it exists to protect all Championship clubs, no mention of any bilateral agreement between all clubs. 

Anyhow, off to get ready to watch the game!

David on reflection this isn’t quite the smoking gun I thought it was , but it definitely helps . Gibson claim of systematic cheating or couhig claim of deliberately delaying accounts would be acts of bad faith and so they can’t bring those claims.

But I haven’t seen anything yet that would rule out Boro claiming that they lost out due to us breaking some other rule.

As you say it doesn’t feel right but doesn’t seem to be stopping these parasites from continuing. 

[i-Ram]

23 hours ago, PistoldPete said:

It certainly is not a red herring, I think you miss the point completely.

as things stand they are not football creditors. They are however creditors for the purposes of a CVA . So their claims can be compressed. 
 

if a tribunal subsequently makes an award it will have to allow for statutory deductions that would have applied to any claim . 

So the amounts due to be paid will be net of the statutory deduction. If Derby pay that net amount they will be paying 100% of the amounts due . .. so satisfying the football creditor requirement.

Bit more time on my hands today and I have copied in @RoyMac5and @Tamworthram and @Davidtoo. What I suggest here might not be correct as I am no insolvency expert, and I am not party to any of the negotiations. So this is simply my understanding. Probably no better or worse than the thoughts of @duncanjwithamor @Ghost of Cloughwho seem well read on the matters.

Boro and Wycombe are not creditors. Presently they have only submitted unproven claims to be considered by way of arbitration under EFL Rules. To become creditors, let alone football creditors, an arbitration process has to proceed, all facts have to be considered, and a decision is made. That decision we would all like to think will come back that the claims have no merit, but it is possible that an award could be made in favour of the two parasites. At that point they could argue that they are creditors, and I think at that point they could justifiably argue that they are therefore football creditors under EFL Rules.

Legal proceedings cannot commence against the Club as it is in administration, so Q (or a court) have to give consent to allow legal proceedings to go ahead. Q have argued that no proceedings can commence - whether it be via the EFL arbitration route or via the legal route of civil proceedings - arguing that statute is with them. In an administration process under the Corporate Insolvency and Governance Act 2020  Q’s position was that no arbitration could be commenced, as an automatic moratorium within the 2020 Act prevents the arbitration from proceeding unless leave has been granted by the court. EFL countered and said statute is all well and good from an administrative perspective, but if the Club wants to continue playing in the EFL then they have to abide by the rules of the league membership. Effectively I think saying, you can save the Club but go play your football in another league!

Q were proposing to come out of Administration with a Class Cram restructuring option rather than CVA (according to Ian Redfearn of BAWT), disregarding totall the claims of Boro and Wycombe, and the new owner would set-up a NewCo to own the Club post-administration. This would have meant that Boro and Wycombe could not have once again claimed against the NewCo once the sale was concluded, and the claims died with the OldCo. That clearly isn’t going to happen now. Note we would have started next season at -15 points if the EFL had agreed to that course of action.

We are left in a position where Q reluctantly have agreed to go down the Arbitration route. That the claims of Boro and Wycombe will be considered. I imagine that might go the EFL LAP route, with Q keeping their legal powder dry until such time as they think they might want to invoke it under civil proceedings. If you like, keeping matters polite with the EFL for as long as they need to. Hopefully the LAP will find no merit in the claims of the Parasites, but if they say there is some award due then ‘arguably’ they become creditors for the award amount, although not necessarily under statute.   Depending on the size of the award Q would then need to consider next actions, taking into account whether a PB will pay the extra monies due, and whether existing and legislate creditors will be happy with the position, particularly if their take is to be further diluted. HMRC in particular might have strong views. If there is one plus side, it is likely if the Club does still exist after the Boro/Wycombe award is accounted for and dealt with, we are more likely to come out under a CVA with all creditors getting the minimum % for the EFL to not invoke the -15 point penalty. That would however mean Boro/Wycombe being paid 100% of their award as I think then Q to move forward would have to acknowledge them as football creditors.

I could try and guess the end game here, but I don’t think there is any further point speculating on the situation until we know the findings of the arbitration. 

[i-Ram]

P.s. I know this is @David’s thread, and he wealds more power than Kim Jong-un but I don’t see there much merit having this thread running now separate from the main Administration thread. It is more confusing I think to be having two threads going covering the same kind of stuff.

[duncanjwitham]

7 minutes ago, i-Ram said:

We are left in a position where Q reluctantly have agreed to go down the Arbitration route. That the claims of Boro and Wycombe will be considered.

The rest of your post pretty much matches my understanding, but it's still not 100% clear exactly what's being arbitrated right now - whether it's the full claims, or a narrower question like are 'Boro/Wycome football creditors, or querying the interaction with the EFL rules and the insolvency moratorium or something.

[i-Ram]

Just now, duncanjwitham said:

The rest of your post pretty much matches my understanding, but it's still not 100% clear exactly what's being arbitrated right now - whether it's the full claims, or a narrower question like are 'Boro/Wycome football creditors, or querying the interaction with the EFL rules and the insolvency moratorium or something.

Agree; we are in the dark until Q or EFL break silence ?

[PistoldPete]

56 minutes ago, i-Ram said:

Bit more time on my hands today and I have copied in @RoyMac5and @Tamworthram and @Davidtoo. What I suggest here might not be correct as I am no insolvency expert, and I am not party to any of the negotiations. So this is simply my understanding. Probably no better or worse than the thoughts of @duncanjwithamor @Ghost of Cloughwho seem well read on the matters.

Boro and Wycombe are not creditors. Presently they have only submitted unproven claims to be considered by way of arbitration under EFL Rules. To become creditors, let alone football creditors, an arbitration process has to proceed, all facts have to be considered, and a decision is made. That decision we would all like to think will come back that the claims have no merit, but it is possible that an award could be made in favour of the two parasites. At that point they could argue that they are creditors, and I think at that point they could justifiably argue that they are therefore football creditors under EFL Rules.

Legal proceedings cannot commence against the Club as it is in administration, so Q (or a court) have to give consent to allow legal proceedings to go ahead. Q have argued that no proceedings can commence - whether it be via the EFL arbitration route or via the legal route of civil proceedings - arguing that statute is with them. In an administration process under the Corporate Insolvency and Governance Act 2020  Q’s position was that no arbitration could be commenced, as an automatic moratorium within the 2020 Act prevents the arbitration from proceeding unless leave has been granted by the court. EFL countered and said statute is all well and good from an administrative perspective, but if the Club wants to continue playing in the EFL then they have to abide by the rules of the league membership. Effectively I think saying, you can save the Club but go play your football in another league!

Q were proposing to come out of Administration with a Class Cram restructuring option rather than CVA (according to Ian Redfearn of BAWT), disregarding totall the claims of Boro and Wycombe, and the new owner would set-up a NewCo to own the Club post-administration. This would have meant that Boro and Wycombe could not have once again claimed against the NewCo once the sale was concluded, and the claims died with the OldCo. That clearly isn’t going to happen now. Note we would have started next season at -15 points if the EFL had agreed to that course of action.

We are left in a position where Q reluctantly have agreed to go down the Arbitration route. That the claims of Boro and Wycombe will be considered. I imagine that might go the EFL LAP route, with Q keeping their legal powder dry until such time as they think they might want to invoke it under civil proceedings. If you like, keeping matters polite with the EFL for as long as they need to. Hopefully the LAP will find no merit in the claims of the Parasites, but if they say there is some award due then ‘arguably’ they become creditors for the award amount, although not necessarily under statute.   Depending on the size of the award Q would then need to consider next actions, taking into account whether a PB will pay the extra monies due, and whether existing and legislate creditors will be happy with the position, particularly if their take is to be further diluted. HMRC in particular might have strong views. If there is one plus side, it is likely if the Club does still exist after the Boro/Wycombe award is accounted for and dealt with, we are more likely to come out under a CVA with all creditors getting the minimum % for the EFL to not invoke the -15 point penalty. That would however mean Boro/Wycombe being paid 100% of their award as I think then Q to move forward would have to acknowledge them as football creditors.

I could try and guess the end game here, but I don’t think there is any further point speculating on the situation until we know the findings of the arbitration. 

Thanks Iram I am not an insolvency expert either , as you have pointed out .

I have been listening to what quantuma say though. They still seem to be saying the issue between them and the Efl is whether the Boro and Wycombe claims can be compressed. Which is why the title of this thread is important.

The merits of the claim is important too … but that may only be decided when we are out of admin .. for the reasons you say the arbitration cannot be decided until then unless a court decided otherwise or unless q agree to it. 
 

quotes in the athletic today suggest quantuma still wanting to sit it out on that front.and there’s an Efl meeting today so we could hear more later today. 

[Day]

5 minutes ago, PistoldPete said:

They still seem to be saying the issue between them and the Efl is whether the Boro and Wycombe claims can be compressed. Which is why the title of this thread is important.

@i-Ram as above, whilst I agree we do not 2 topics on what has now become the same discussion point, the point of the topic title was to try and bring attention to a key issue be it the media, MP’s and other fans that will be visiting this forum which is why I pinned it. 

It’s also the less populated of the two, so we don’t get a lot of the daily conversations and repeated links throughout the day. 

Couldn’t tell you if this topic has helped in anyway, however now it appears the vast majority including the media and MP’s are on board with what is the main issue that’s holding up the sale, doesn’t mean we should stop now, we need to continue the pressure on all forms of social media. 

[PistoldPete]

2 minutes ago, David said:

@i-Ram as above, whilst I agree we do not 2 topics on what has now become the same discussion point, the point of the topic title was to try and bring attention to a key issue be it the media, MP’s and other fans that will be visiting this forum which is why I pinned it. 

It’s also the less populated of the two, so we don’t get a lot of the daily conversations and repeated links throughout the day. 

Couldn’t tell you if this topic has helped in anyway, however now it appears the vast majority including the media and MP’s are on board with what is the main issue that’s holding up the sale, doesn’t mean we should stop now, we need to continue the pressure on all forms of social media. 

I agree David. the football creditor issue and the merits of the Boro and Wycombe claims are both important.

But the football creditor issue needs to be dealt with whilst we are in admin. The merits of the Boro and Wycombe claims can be dealt with when we come out of admin, due to the moratorium. 
 

so the football creditor issue is the most pressing one and needs to be sorted ASAP.

[i-Ram]

52 minutes ago, David said:

@i-Ram as above, whilst I agree we do not 2 topics on what has now become the same discussion point, the point of the topic title was to try and bring attention to a key issue be it the media, MP’s and other fans that will be visiting this forum which is why I pinned it. 

It’s also the less populated of the two, so we don’t get a lot of the daily conversations and repeated links throughout the day. 

Couldn’t tell you if this topic has helped in anyway, however now it appears the vast majority including the media and MP’s are on board with what is the main issue that’s holding up the sale, doesn’t mean we should stop now, we need to continue the pressure on all forms of social media.