hutch

What date is the cut off date?

Wasn't it the date that the club's website was shut down because you didn't pay the bill?

CVA question - If a CVA is agreed, what happens if the terms are not met at a later date(is AA liable for instance) I ask because the income side of the P & L seems based upon a huge amount of assumption (player transfers, gate receipts, future tv money) and may not materialise in the quantities previously thought.

The AA CVA is to pay 4p in the first year from the proceeds of player sales (20% of total received, I think), and 4p from the club profits in subsequent years. My reading of that is that the club's obligation to make the CVA payments to creditors is conditional on achieving the income from player sales and making profits in future.

I think that any breach of the terms of a CVA leads to immediate liquidation. There are no second chances. But AA has prepared the CVA with a get-out clause.

In a nutshell, in order to fulfill his duty to get the best possible deal for the creditors, AA has proposed to give them a pittance, and let the club keep the bulk of the parachute payments to pay inflated wages (in nPC terms) in future seasons to have a better chance of getting back to the PL. If they succeed, their income goes back up by around £60m p.a. of which AA has promised to give £4m to the creditors as a "thank you" bonus, and Chainrai gets to keep the rest.

As an alternative, Griffin has proposed that the club should in future operate within its means WITHOUT the help of the parachute money. i.e. it uses whatever it collects in gate money, merchandising etc to operate the club, pay wages and buy players. They're going to find it hard to understand that one down there. The parachute payments (and SKY money) are used to pay off the football creditors and the rest goes to the unsecured creditors. Income from sale of current players goes to the creditors. Income from sale of any new players goes to the club. If Gaydamak persists with his claim, they get around ⅔ of what they are owed, and Gaydamak probably gets his day in Court. If he drops it they get paid in full.

Fair enough. But surely this proposal is reliant anyway on the HMRC winning its case in court to overturn the priority given to footballing creditors. As I understand it, the current situation regarding the parachute payments was that it would be ringfenced to go to football creditors and that the residue of any monies remaining was the 20% for unsecured creditors.

No, it isn't. Both Griffin & HY proposals factor in paying off the football creditors in full.

If they do get through, I hope somebody told them how many people over here carry firearms legally.

"Come on you fat b*stard"

BANG.

Not surprisingly, there is absolutely no road rage in South Africa.

But surely the essence of what Griffins is proposing is that Gaydamak gets nothing and those extra monies be transferred towards payment of the unsecured creditors, thus raising their payment from the 20p to 65p in the pound. That is how I read it. Effectively they propose to put a gun against Gaydamak's head by threatening to prove that he was trading illegally whilst insolvent unless he withdraws his claims to money owed to him.

Not as I read it. Giving (rightly) the lions share of the parachutes and TV income to the creditors rather than the club, thereby reducing the clubs available income to pay stupid wages they can't afford, raises the dividend to around 65p. If Gaydamak walks away the 65p becomes 99p.

I used to have chameleons in the garden, before we moved. Cute.

Also had a cobra in the same garden, before I took his head off with a spade. I would've preferred to chase him away, but Mrs. H wouldn't have set foot outside the door again unless I showed her the carcass.

I do have the African equivalent of the Black Widow spider (Brown Button spider "latrodectus geometricus") in the garden at the moment, but don't tell Mrs. H

You're right Hutch - I couldn't get my brain working at the time!! I wonder if the ruleset I've downloaded is an old set as I can't see anything in there relating to in administration without a cva being produced.

It isn't in there. It's part of something called The Football League Insolvency Policy. Whether that policy is actually written down or not, I don't know. I certainly can't find a copy.

But it definately exists, and it's pretty draconian. Ask Leeds, Luton, Bournemouth, Rotherham ....

Anyone that does not vote against the CVA will be classified as approving the CVA, so in real terms only the people who need to vote are those that object to the CVA.

I doubt if that's right. As I understand it, the CVA must be approved by those in total holding £1 more than 75% of the total unsecured debt. If you don't vote in favour, you don't approve it. I doubt whether it matters whether you are there or not. Failing to attend a meeting wouldn't make your debt disappear. I assume proxy votes are permitted.

On the version quoted above, the rule would have to say that the CVA must be rejected by 25%. It doesn't say that. An abstention is effectively a vote against.

Here's the relevent bit from the FL rulebook....

 

12.3.3 If any club relegated to the League from The Premier League (in accordance with the Rules of The Premier League) whilst it was a member of The Premier League, took or suffered any such action as set out in Regulation 12.3.1 of these regulations at any time following the end of the season (as defined in the Rules of The Premier League) but before it becomes a member of The League, then that club, upon being accepted as a member of The League in accordance with Regulations 7.4 and 10.1 shall suffer a deduction of 10 points, such points deduction to apply in respect of the following Season such that the Club starts that Season in Division One on minus 10 points.

 

12.3.4 For the avoidance of doubt, where a Club is subject to more than one of the procedures in Regulation 12.3.1 above during a process of compromising its creditors (for example Administration followed by a Company Voluntary Arrangement), the Club shall only be deducted one set of 10 points,

such deduction to apply with effect from the first insolvency procedure.

Pompey went into administration before the end of the season. They took a 9 point hit for that under PL rules. 12.3.3 doesn't apply in this case.

Why does everything down the road seem to imply that a 'new' owner, aka Chainrai, is in place and pulling all the strings. It is quite bizarre, really. Handy Andy seems to carry on merrily, planning pre-season, installing CEOs and managers, turning down bids as 'derisory' for players like they have not a care in the world. I still wonder if we are not missing something.

 

http://www.portsmouth.co.uk/frattonlatest/Pompey-close-in-on-new.6344512.jp

Who can tell in the surreal world of professional football finance, particularly when allied to the shady world that insolvency practitioners inhabit (with absolutely no disrespect to any posters on here)?

However, I am personally expecting some news around Wednesday following the FL AGM. I cannot see how the FL can give the Newcastle/West Brom/Blackpool share to Portsmouth in the current circumstances. I could see it where the League could guarantee that they would pay off all the outstanding football debt themselves by deducting it from Pompey's parachute payments. But surely now, after receiving HMRC's writ, they cannot be certain of that.

I have a feeling that the League might decide to hold the share "in trust" on Pompey's behalf, with a list of conditions to be fulfilled before the share is handed over to Pompey, and maybe a list of sanctions which will be imposed if the conditions are not met. After all, we do know that the Football League have an Insolvency Policy, and have regularly used it in the past to penalise other clubs. We just don't know what that policy is.

How do you sail round Brittany?

Just finished. USA 3-1 Australia 3rd goal in Fergie time.

Based on those performances, not much to worry about there. Both defences pretty poor. Australia could have had 5 or 6 - poor finishing. The only worry is that USA are reasonably sharp on the break.

Their friendly v Australia in Johannesburg is on here live at the moment. They look pretty average, although they've just gone 2-1 up after half an hour. Australia are the more organised side, but not finishing well. The Aussies have much more posession. USA are weak when defending in their own half, with no real midfield, but are effective on the break. Buddle's got both their goals.

Beckham's at the game.

Moore & Dempsey just got booked for a bit of handbags.

If you are looking at a mobile broadband dongle, bear in mind the hideous cost. I had an O2 dongle and it cost me more than £480 for 4 days in Spain. This was with a bolt-on. Have now moved to Vodafone. As long as you are on another Vodafone network (SFR in France) they will cap your usage at £8.50 per day plus VAT for 50 MB - enough for what you need. Every additional 50 MB is another £8.50.

 

The other option is to go onto ebay, buy an unlocked dongle (should cost you around £30) and then go into a mobile shop in France (Carphone have lots of shops there called "The Phone House"), get the best local top up SIM deal you can on data and use that. As long as the dongle is unlocked, it will work fine.

 

PS From 1st July there are new EU rules on roaming which cap the cost.

Sorry I missed the bit about the unlocked dongle in my earlier post. I've got a 3G card built into my laptop. Just pop a sim card in and it connects. It's not tied to any particular networks.

Many countries I visit have "pay as you go" mobile data services. You buy a local sim card and a top-up voucher. Don't know if that works in Europe.

Sad news. Rest in peace.

Erm do you want to tell him or shall I?

You can, and at the same time remind him that if Pompey are liquidated and the player registrations go back to the FA, he will get nothing. He will then be personally liable to the creditors for what he could have got if he'd sold them while he still could.

Yeah or the Prem could pay the football debts on their behalf and the new company is then in debt to them for the amount owed. A percentage of all future earnings go to pay off the debt?

Nope. That would still be the Company paying the extra dividend to the football creditors, but not to the others. That's not the way it's meant to work.

The other thing that strikes me is if this is upheld, The PL have no justification for holding on to parachute monies and would have to pay them directly to the club.

I agree. That's the nub of it.

The proper way to do it would be that parachute payments go to the company and are distributed equally. After all the creditors financed the PL run which earned the parachute payments in the first place. The new owner then has the choice of separately paying the football debt if he wants a licence to play football.

2 things strike me.

The first is that, if the HMRC challenge succeeds, then the "football" creditors would only be entitled to the same slice of the pie as all the other unsecured creditors, i.e. 20p in the £. The "football" debt is quoted as £22.7m. If only 20% of that is paid (£4.54m) then that leaves another £18.16m either "in the pot" for distribution among the unsecured creditors, or straight into Chainrai's pocket. It was reported that 20p would cost £16.5m, so if £39.2m (£16.5m + £22.7m) is actually available for the unsecured creditors on an equal footing, they would then receive 37p in the £ (adjusted to add the "football" creditors alongside the ordinary unsecured creditors). On that basis, AA, whose principal duty is to get the best return for the creditors, cannot (and should not already have) proposed a CVA until the matter has been determined by the Courts.

The second is that I think it was reported (by AA) that HMRC would not vote against the CVA. That is not the same as voting to accept it. It requires approval by 75% of the unsecured creditors by value, and 50% of the unassociated unsecured creditors. If HMRC simply didn't vote either way, that would make life interesting, to say the least.

It is my understanding, and I could well be wrong here, that the way the "football creditor's rule" gets past the insolvency legislation is that the insolvent Company pays the same dividend, 20p in the £ or whatever, to the football creditors as to everybody else via a CVA. The incoming new owner then pays the balance of the football debt from his own resources, not the Company, in order to get the playing licence back. That seems to be distasteful, but legal. As I read the CVA proposal, the insolvent Company is proposing to pay 100% to the football creditors (via deductions by the PL from parachute payments in the future) and only 20% to the other creditors. I think HMRC are on to something here.

here...

 

http://www.capegrace.com/

 

It's an excellent hotel, Hatch. I'm sure you'll be very comfortable . And it's walking distance to the stadium.

While you're at it, you could try its sister

http://www.africanpridehotels.com/mount-grace-country-house-and-spa.html

which is only half an hour from the England camp and matches in Rustenburg.

For those who have started packing, we had the first ground frost of the winter in Pretoria this morning.

This wasn't an aid convoy. It was a publicity stunt.

The first "survivor" interview I saw on TV was a pretty young woman with a baby in a pushchair, who were apparently only metres from the fighting on the boat. Great PR for the anti-Israeli lobby. Why was she on board? And c. 600 multi-national activists on an aid ship?

I meet a lot of aid workers in my travels around Africa. They don't carry iron bars, stun grenades or firearms.

The Israeli's were set up, and walked right into it.

I am NOT an Israeli sympathiser, and work with Palestinians every day.

No mention of Crouch?

What are these cassette tapes that you speak of?

A bit like a Blu-Ray, but a bit older.