Should Charlton have a points penalty

[Chopper71]

We were given minus 10 when the parent company went bust (rightly so I think), but have Charlton found a way around it? If I read this right it says that they've transferred all the assets to another company, and left the plc to go pop. That stinks!

 

http://news.bbc.co.uk/sport1/hi/football/teams/c/charlton_athletic/9151712.stm

 

life-long fan of the south-east London side, Murray was forced to restructure Charlton Athletic this summer when Charlton Athletic plc was effectively wound up with debts of more than £30m.

 

Charlton Athletic Football Company, which owns the players, and Charlton Athletic Holdings, which owns the Addicks' stadium The Valley and the training ground, were transferred to Murray's new company in July.

 

Murray has made no secret of the fact Charlton Athletic need to find new investors and he recently told a meeting of shareholders in the now worthless plc that £5m is required this season to avoid administration.

[sfc1971]

So the holding company goes bust and they are not going to have any sanctions forced upon them ?

 

Mmm interesting I do hope that Al Cortese has his legal team keeping a close eye on this one.

[dubai_phil]

They could have been the richest club in football after Man City if only some idiot hadn't issued a Press Release saying they were going to be bought by Dubai PLC.

 

But in hindsight, probably a lucky escape....

 

The issue with SLH was that it couldn't be separated from the footballing side (If ONLY we'd kept the Radio Station eh) In Charlton's case (as in WHU) the Holding company did actually function as a business

[anothersaintinsouthsea]

They could have been the richest club in football after Man City if only some idiot hadn't issued a Press Release saying they were going to be bought by Dubai PLC.

 

But in hindsight, probably a lucky escape....

 

The issue with SLH was that it couldn't be separated from the footballing side (If ONLY we'd kept the Radio Station eh) In Charlton's case (as in WHU) the Holding company did actually function as a business

 

It doesn't say that in the article though - have you heard that elsewhere? - I guess the more pertinent question is whether or not the £30m debt held by the holding company was football club related or not? In our case it obviously was, in West Ham's case it was not.

[CB Fry]

It doesn't say that in the article though - have you heard that elsewhere? - I guess the more pertinent question is whether or not the £30m debt held by the holding company was football club related or not? In our case it obviously was, in West Ham's case it was not.

 

 

It looks to me that Charlton Athletic Football Club PLC is the football club in the same way that SLH PLC was Saints. Sounds a bit like CAFC have got away with a cheeky one there.

[benjii]

You can't just divest yourself of assets if you owe serious money to commercial lenders.

 

The money owed must've been owed to the shareholders/directors surely, or else the lenders must have accepted a compromise of some sorts? I'm speaking from a position of complete ignorance about Charlton and who their creditors are but, generally speaking, you can't legitimately escape debts by squirelling assets away from creditors.

[Sheaf Saint]

In answer to the question: yes they should. I think all of us on here hoped that we could get away with it on a technicality, but deep down we knew that, morally, we deserved the -10. So do Charlton, and if they get away with it on a technicality then we should lodge an official complaint to the FL about it.

[Gingeletiss]

You can't just divest yourself of assets if you owe serious money to commercial lenders.

 

The money owed must've been owed to the shareholders/directors surely, or else the lenders must have accepted a compromise of some sorts? I'm speaking from a position of complete ignorance about Charlton and who their creditors are but, generally speaking, you can't legitimately escape debts by squirelling assets away from creditors.

 

Poopey did, in a different way (imagined loans!)

[saintjay77]

In answer to the question: yes they should. I think all of us on here hoped that we could get away with it on a technicality, but deep down we knew that, morally, we deserved the -10. So do Charlton, and if they get away with it on a technicality then we should lodge an official complaint to the FL about it.

 

Exactly, I think if we had got away with it there would have been a bad feel about it. I never proudly spouted off about how we may get away with it. When asked I tried to be honest and hoped we wouldnt get a penalty but admitted we probably deserved one. Its gutting that the FL changed the rules to suit in order that we didnt get away with it but thats life I guess.

 

It stinks that other clubs still continue to flounce round the rules in order to get away with things now and there seems to be no-one with the ability to do anything about it. How come things are done to make sure we are punished yet others can do what ever they like?

[eelpie]

It could all get spicy if Charlton pip us to promotion by one place.

[COMEONYOUREDS]

reading the article it sounds like they will be in administration before too long anyway. I dont believe they will put together a realistic promotion push - the future really does look bleak for them. A shame, but I never liked charlton anyway

[Wes Tender]

Exactly, I think if we had got away with it there would have been a bad feel about it. I never proudly spouted off about how we may get away with it. When asked I tried to be honest and hoped we wouldnt get a penalty but admitted we probably deserved one. Its gutting that the FL changed the rules to suit in order that we didnt get away with it but thats life I guess.

 

It stinks that other clubs still continue to flounce round the rules in order to get away with things now and there seems to be no-one with the ability to do anything about it. How come things are done to make sure we are punished yet others can do what ever they like?

 

Agree wholeheartedly. Charlton's position could well have an impact on the promotion prospects of another club which has had to cut their cloth according to their means and often debt spiralling out of control is due to a club buying or paying players money it cannot afford, but giving them an advantage in terms of the strength of their team.

 

We had to take the nasty medicine and without the penalty might have been promoted to the Championship. At the very least, Saints should make representations to the FL that a penalty should be levied on Charlton, or an explanation should be made as to what the difference was between our situation and theirs. If they do not impose the penalty, there should be a campaign from supporters of other clubs in the division to apply pressure on the FL to change their minds.

[Matthew Le God]

there should be a campaign from supporters of other clubs in the division to apply pressure on the FL to change their minds.

 

They can't go back and change the rules and then apply them retrospectively for something Charlton did in the summer. I think a lot of Charlton's debt were soft debt in the form of director loans.

Edited 9 November, 2010 by Matthew Le God

[SFKA South Woodford]

I'm just wondering when that beacon of social fairness and supporter of financial fairplay Barry Hearn is going to tell everyone that Charlton should be relegated to the Blue Square Premier division! What's that Barry? "Charlton are diamond cockernee geezers, who wouldn't hurt anyone that didn't deserve it, just like Reg and Ron"

[saintmatt]

As I understand it, we broke no rules when SLH went into admin. The reason we ended up with -10 is because the FL refused to sanction the Liebherr takeover unless we signed an agreement not to appeal the deduction (an appeal the FL (correctly) feared we'd win). The rules were only changed post SLH slipping into admin, weren't they?

[Window Cleaner]

Can't see what difference it makes to us really, we'll finish above them anyway.

[Doctoroncall]

You can't just divest yourself of assets if you owe serious money to commercial lenders.

 

The money owed must've been owed to the shareholders/directors surely, or else the lenders must have accepted a compromise of some sorts? I'm speaking from a position of complete ignorance about Charlton and who their creditors are but, generally speaking, you can't legitimately escape debts by squirelling assets away from creditors.

 

Agree. I would imagine the debt has been restructured and taken on by the new company, just like the assets. The report is badly worded.

[Wes Tender]

They can't go back and change the rules and then apply them retrospectively for something Charlton did in the summer. I think a lot of Charlton's debt were soft debt in the form of director loans.

Sorry, I fail to see the difference between our position and theirs. The PLC was wound up as was ours. We thought that we had exploited a loophole but weren't allowed to get away with it. What's the difference with Charlton's position? So what if their debt was loans from directors. So was some of Pompey's. Debt is debt and paying it off reduces the amount of cash that could be spent on improving the team, therefore writing it off in Administration gives a team an advantage, so I thought the whole idea of the points deduction was to negate that advantage. So it happened in the Summer and therefore there cannot be any points penalty for this season. Is that how it works?

[Matthew Le God]

Sorry, I fail to see the difference between our position and theirs. The PLC was wound up as was ours. We thought that we had exploited a loophole but weren't allowed to get away with it. What's the difference with Charlton's position? So what if their debt was loans from directors. So was some of Pompey's. Debt is debt and paying it off reduces the amount of cash that could be spent on improving the team, therefore writing it off in Administration gives a team an advantage, so I thought the whole idea of the points deduction was to negate that advantage. So it happened in the Summer and therefore there cannot be any points penalty for this season. Is that how it works?

 

Email the Football League then and see what they say.

[benjii]

Sorry, I fail to see the difference between our position and theirs. The PLC was wound up as was ours. We thought that we had exploited a loophole but weren't allowed to get away with it. What's the difference with Charlton's position? So what if their debt was loans from directors. So was some of Pompey's. Debt is debt and paying it off reduces the amount of cash that could be spent on improving the team, therefore writing it off in Administration gives a team an advantage, so I thought the whole idea of the points deduction was to negate that advantage. So it happened in the Summer and therefore there cannot be any points penalty for this season. Is that how it works?

 

Our debt was to commercial lenders. We had no cashflow as we had breached our overdraft limit and the bank would not advance us anymore. This meant we were unable to trade solvently and we went into administration. This act would have also represented a default on the stadium loan.

 

That is a completely different scenario from a few directors/shareholders offering to write off their debt in exchange for a transfer of assets into a new company owned by them.

 

I'm not sure if that's what happened at Charlton but unless you know all the details then simply saying, "I fail to see the difference", does not qualify you to assume that there isn't one.

[Wes Tender]

Quote:

A life-long fan of the south-east London side, Murray was forced to restructure Charlton Athletic this summer when Charlton Athletic plc was effectively wound up with debts of more than £30m.

 

Charlton Athletic Football Company, which owns the players, and Charlton Athletic Holdings, which owns the Addicks' stadium The Valley and the training ground, were transferred to Murray's new company in July.

 

So Charlton's holding Company were a PLC like ours, but able to transfer all of their largest assets like the Stadium and the training ground to Murray's new company along with the players who were owned by Charlton Athletic Football Club and effectively wipe out £30 million of debt? Is this just badly worded, or were they able to do that as a PLC?

[mattyd]

Email the Football League then and see what they say.

 

Charlton PLC is till in place. The assetts and good will were purchased. The debt is paid by the purchase. No admin (Insolvency Act definition) = no points deduction

[SuperMikey]

I think if it is how the report suggests, they should get a points deduction. I can't be arsed to read the thread to see whether this is true or not.

[John B]

As Charlton are not in administration I dont see what the problem is.

 

Possibly the financial monuveres have been done to enable someone to buy Charlton in an easy manner

[benjii]

Quote:

 

So Charlton's holding Company were a PLC like ours, but able to transfer all of their largest assets like the Stadium and the training ground to Murray's new company along with the players who were owned by Charlton Athletic Football Club and effectively wipe out £30 million of debt? Is this just badly worded, or were they able to do that as a PLC?

 

Charlton PLC is till in place. The assetts and good will were purchased. The debt is paid by the purchase. No admin (Insolvency Act definition) = no points deduction

 

As Charlton are not in administration I dont see what the problem is.

 

Possibly the financial monuveres have been done to enable someone to buy Charlton in an easy manner

 

Aye.

 

Charlton PLC owes loads of money. Charlton PLC can't afford to pay it. Charlton PLC has to sell its assets (one of which is the football club). The creditors accept that and don't exercise any rights they may have to appoint an administrator. No insolvency.

 

It's basically just a sale of the football club and associated assets, just under distressed circumstances. Or at least, that's how it sounds.

[up and away]

As Charlton are not in administration I dont see what the problem is.

 

Possibly the financial monuveres have been done to enable someone to buy Charlton in an easy manner

 

This seems reasonably sensible and I can't see the downside. If Charlton go into administration, this purchase/transfer will be looked at closely and must stand the test of not being a recourse to any possible administration. If this has been voted through by 75% of the share holders and does not disadvantage most debts that may arise, it should be ok.

 

What it does do is allow Murray to invest money into the club, without ****ing it against the wall. With the added benefit that the players come more into the same category as other creditors.