For those with company law knowledge

[hughieslastminutegoal]

Is the football club itself a company, and could it be separated completely from Southampton Leisure Holdings?

 

If so, is it possible that this is what Lowe and Co are getting ready to do?

 

If they could hive off the club as a business (temporarily at least) paying its way because they've got costs down to absolute rock bottom, could they then put SLH into Administration and then into liquidation?

 

Lowe wanted into SFC when a stadium was mooted at Stonham, but eventually was almost forced into going ahead with something he didn't really want - a stadium in Northam. Could he find an out from this now, getting rid of those debts but the same people still owning the ongoing football club?

 

I'd put nothing past Askham and Lowe in concert.

 

I readily admit I am no company law expert, but can anyone with the requisite knowledge comment on the possibility or otherwise of something like this happening?

[Scummer]

I think there are rules to prevent companies being broken up in advance of a liquidation.

[bridge too far]

The link I'm about to show is to do with construction, not football clubs but I wonder if what has been done here could be done with SLH?

 

The contracting division has gone into administration but the housebuilding and property development bit hasn't.

 

I guess it all depends on the way the various companies are structured.

 

http://newsvote.bbc.co.uk/1/hi/wales/mid/7693325.stm

[Scummer]

The link I'm about to show is to do with construction, not football clubs but I wonder if what has been done here could be done with SLH?

 

The contracting division has gone into administration but the housebuilding and property development bit hasn't.

 

I guess it all depends on the way the various companies are structured.

 

http://newsvote.bbc.co.uk/1/hi/wales/mid/7693325.stm

 

We could possibly put the part that owns the stadium into administration, and keep the football part going. The problem is that we'd then have nowhere to play.

[bridge too far]

We could possibly put the part that owns the stadium into administration, and keep the football part going. The problem is that we'd then have nowhere to play.

 

We could rent from Eastleigh FC, surely? That holds a couple of thousand, I would have thought.

 

I'm laughing through my tears

[hughieslastminutegoal]

We could possibly put the part that owns the stadium into administration, and keep the football part going. The problem is that we'd then have nowhere to play.

 

But would that be the case?

Someone would own a stadium.

They would want a tenant.

You would't wind up SLH until you'd set up a tenancy of the stadium.

[Secret Site Agent]

Yes, if Saints is a seperate company as part of SLH, which as a subsiderary it is, it can be sold off as a going concern whilst the holding company, SLH, can be put into administration. The problem would be convincing any administrator that it can run as a going concern, but it will still have to hold any debt attributed to it, (the Club). This is to stop the transfering of debt from one company, to it's parent company, then goiung into admin and bankrupcy to clear debt. Even the old 'SLH buy southamptons debts then go into admin' doesn't work anymore and is illegal.

 

I think.

[Window Cleaner]

Yes, if Saints is a seperate company as part of SLH, which as a subsiderary it is, it can be sold off as a going concern whilst the holding company, SLH, can be put into administration. The problem would be convincing any administrator that it can run as a going concern, but it will still have to hold any debt attributed to it, (the Club). This is to stop the transfering of debt from one company, to it's parent company, then goiung into admin and bankrupcy to clear debt. Even the old 'SLH buy southamptons debts then go into admin' doesn't work anymore and is illegal.

 

I think.

 

 

But we've had informed speculation on this before.

The theory then was the FC Ltd be put into administration but not the PlC or

the Stadium Ltd. Those that spoke of it at the time seemed to be intimating that it had already been run through the legal eagles by the board and that it was in order.

[hughieslastminutegoal]

Yes, if Saints is a seperate company as part of SLH, which as a subsiderary it is, it can be sold off as a going concern whilst the holding company, SLH, can be put into administration. The problem would be convincing any administrator that it can run as a going concern, but it will still have to hold any debt attributed to it, (the Club). This is to stop the transfering of debt from one company, to it's parent company, then goiung into admin and bankrupcy to clear debt. Even the old 'SLH buy southamptons debts then go into admin' doesn't work anymore and is illegal.

 

I think.

 

So they separate while both bits are (just about) going concerns.

SLH own the stadium and other bits an pieces. The football club has an agreement to pay rent on the stadium. After a "decent" period, SLH is put into Administration?

 

I'm sure this is problematic, and may well not be possible, but just think someone has a trick up their sleeve.

[stthrobber]

Is the football club itself a company, and could it be separated completely from Southampton Leisure Holdings?

 

If so, is it possible that this is what Lowe and Co are getting ready to do?

 

If they could hive off the club as a business (temporarily at least) paying its way because they've got costs down to absolute rock bottom, could they then put SLH into Administration and then into liquidation?

 

Lowe wanted into SFC when a stadium was mooted at Stonham, but eventually was almost forced into going ahead with something he didn't really want - a stadium in Northam. Could he find an out from this now, getting rid of those debts but the same people still owning the ongoing football club?

 

I'd put nothing past Askham and Lowe in concert.

 

I readily admit I am no company law expert, but can anyone with the requisite knowledge comment on the possibility or otherwise of something like this happening?

 

I think you will find that they will do anything they can to avoid administration and certainly there is not a lot of mileage in a 2nd hand football stadium.

 

They have been left with a mess and it is causing them a lot of worry and stress trying to keep the club afloat, so whilst your question is valid, the reality is that they are not going in that direction they are trying as best they can to reduce our debt to the bank and try to develop a football team that can play good attacking football on a limited budget.

 

I don't envy that task one iota and as recent results have shown, so far, it's not working

[hughieslastminutegoal]

I think you will find that they will do anything they can to avoid administration and certainly there is not a lot of mileage in a 2nd hand football stadium.

 

They have been left with a mess and it is causing them a lot of worry and stress trying to keep the club afloat, so whilst your question is valid, the reality is that they are not going in that direction they are trying as best they can to reduce our debt to the bank and try to develop a football team that can play good attacking football on a limited budget.

 

I don't envy that task one iota and as recent results have shown, so far, it's not working

 

fair enough, you are probably right, but if separation were possible, administration for SLH would not cause a ponts deduction for the independent football club, would it?

 

No there isn't much mileage in a second-hand football stadium, so whoever became the the owner of it would need a tenant.... and the football club CCC "franchise" would have an ongoing value.

[dubai_phil]

So they separate while both bits are (just about) going concerns.

SLH own the stadium and other bits an pieces. The football club has an agreement to pay rent on the stadium. After a "decent" period, SLH is put into Administration?

 

I'm sure this is problematic, and may well not be possible, but just think someone has a trick up their sleeve.

 

Now this SOUNDS simple, but think it through carefully. It can also be done the other way around. Liquidate the Football Club Ltd.

 

The owner of the stadium would expect rent to be paid. providing the stadium business has not been put into administration, then NU will STILL have the mortgage which will need paying.

 

And then the club pays the rent to the Stadium company, but the stadium company will have to make a profit, so instead of the current crippling mortgage we get the same outlay plus somebody else's profit....

 

Now those who have "gallantly" decided to boycott the club into administration, ask yourselves who would be the continued most likely owner of the the stadium.....

 

So you busted the club, gave it a burden it would never pay off and bingo, no change at the top. Oh and who would own all the nice pockets of property for a rainy day in the future such as Stoneham and Jackson's Farm? Not the football club that's for sure.

 

As others have said, be VERY careful with emotive positions and taking a stand, nothing in business is quite as simple as it seems.

 

(Oh and who would also benefit if the club was raped of it's remaining players and the debt paid off)

 

And who would buy a club with no assets, high overheads and not even the youngsters...

 

Well done whoever is working this one through.

[Window Cleaner]

Now this SOUNDS simple, but think it through carefully. It can also be done the other way around. Liquidate the Football Club Ltd.

 

The owner of the stadium would expect rent to be paid. providing the stadium business has not been put into administration, then NU will STILL have the mortgage which will need paying.

 

And then the club pays the rent to the Stadium company, but the stadium company will have to make a profit, so instead of the current crippling mortgage we get the same outlay plus somebody else's profit....

 

Now those who have "gallantly" decided to boycott the club into administration, ask yourselves who would be the continued most likely owner of the the stadium.....

 

So you busted the club, gave it a burden it would never pay off and bingo, no change at the top. Oh and who would own all the nice pockets of property for a rainy day in the future such as Stoneham and Jackson's Farm? Not the football club that's for sure.

 

As others have said, be VERY careful with emotive positions and taking a stand, nothing in business is quite as simple as it seems.

 

(Oh and who would also benefit if the club was raped of it's remaining players and the debt paid off)

 

And who would buy a club with no assets, high overheads and not even the youngsters...

 

Well done whoever is working this one through.

 

 

The stadium is owned by a separate entity.

Weren't you here when we discussed this Phil ?.

The plan that I heard was. Put the FC Ltd into administration and keep all the others above water.

The shareholders lose nothing and the FC gets some time on it's only debt-the overdraft. I can't remember exactly how it went but it was all very well wrapped and cunning. Apparently it was legal as well.

No-one remember that thread?, perhaps it wasn't on here then.

Perhaps I'm leaking an exclusive secret.:cool::cool::cool::cool:

[Marsdinho]

We could rent from Eastleigh FC, surely? That holds a couple of thousand, I would have thought.

 

I'm laughing through my tears

 

 

We might stand a better chance of filling it

[dubai_phil]

The stadium is owned by a separate entity.

Weren't you here when we discussed this Phil ?.

The plan that I heard was. Put the FC Ltd into administration and keep all the others above water.

The shareholders lose nothing and the FC gets some time on it's only debt-the overdraft. I can't remember exactly how it went but it was all very well wrapped and cunning. Apparently it was legal as well.

No-one remember that thread?, perhaps it wasn't on here then.

Perhaps I'm leaking an exclusive secret.:cool::cool::cool::cool:

 

I'm 3,471 miles away I know nuffink.........

 

But the possibility that some wish for of admin to get rid of the incumbents COULD IMHO leave the incumbents pretty damned close to the club....

[Window Cleaner]

I'm 3,471 miles away I know nuffink.........

 

But the possibility that some wish for of admin to get rid of the incumbents COULD IMHO leave the incumbents pretty damned close to the club....

 

Nah, under the system which was minutely outlined, the incumbents got rid of a lot of their detractors because administration was no longer a sword of Damocles. Wish I could remember exactly how it went, it was in August or about then, must have been on this forum, I don't read the others.

[Saint Fan CaM]

For a start, I cannot see Lowe et al voluntarily putting the PLC into administration as they will lose their share value (as little as that now is) and their grip on the business. Their business CV's will be stained if nothing else.

 

SFC Ltd is the club that is registered with the League and therefore this will not be entered into administration or the going concern and income will be badly damaged or worse still no longer exist.

 

The Stadium Ltd holds the liability for the stadium debt (I think). Could this be put into administration on its own such that the debt is effectively erased and a new owner sought? I cannot believe that the mortgage was provided in the first place without protection to cover this eventuality.

 

The key is in the balance sheet I would think for the PLC. If income from SFC Ltd does not cover the costs and the overdraft is called in, then administration for the PLC becomes a reality and the shareholding will be dissolved. The administrators will then put into place a plan to sell SFC Ltd and Stadium Ltd + other assets to interested parties. I cannot believe the failed PLC Directors will be given the option to buy back into any part of this - given that Lowe and Wilde are not exactly the richest men in the World, there is every chance surely that they will NOT get their hands on the club - i.e. SFC Ltd and its assets.

 

The Stadium Ltd could be sold as a going concern with the attraction that there is a CCC football club ready and waiting to pay rent. There are other businesses using the stadium permanently at the moment also (Radio Hants and Hants Police are two I can think of immediately).

 

I do not think administration is as bad an option frankly as many here make out - unless they have sizeable shares themselves of course, in which case they will argue against the idea naturally. In fact, I think it only fair for those arguing against administration that they declare here if they have a share interest or not. (-; (PS: I sold mine at 60p).

[John B]

For a start, I cannot see Lowe et al voluntarily putting the PLC into administration as they will lose their share value (as little as that now is) and their grip on the business. Their business CV's will be stained if nothing else.

 

SFC Ltd is the club that is registered with the League and therefore this will not be entered into administration or the going concern and income will be badly damaged or worse still no longer exist.

 

The Stadium Ltd holds the liability for the stadium debt (I think). Could this be put into administration on its own such that the debt is effectively erased and a new owner sought? I cannot believe that the mortgage was provided in the first place without protection to cover this eventuality.

 

The key is in the balance sheet I would think for the PLC. If income from SFC Ltd does not cover the costs and the overdraft is called in, then administration for the PLC becomes a reality and the shareholding will be dissolved. The administrators will then put into place a plan to sell SFC Ltd and Stadium Ltd + other assets to interested parties. I cannot believe the failed PLC Directors will be given the option to buy back into any part of this - given that Lowe and Wilde are not exactly the richest men in the World, there is every chance surely that they will NOT get their hands on the club - i.e. SFC Ltd and its assets.

 

The Stadium Ltd could be sold as a going concern with the attraction that there is a CCC football club ready and waiting to pay rent. There are other businesses using the stadium permanently at the moment also (Radio Hants and Hants Police are two I can think of immediately).

 

I do not think administration is as bad an option frankly as many here make out - unless they have sizeable shares themselves of course, in which case they will argue against the idea naturally. In fact, I think it only fair for those arguing against administration that they declare here if they have a share interest or not. (-; (PS: I sold mine at 60p).

 

I have no shares.

 

The problem for administration for me is that the non playing staff and local companies supplying goods and services to SFC will suffer badly.

 

We would lose our best players (if we have any best players ) and we could lose Staplewood and our whole Academy Structure

[exit2]

Its a shame I cant get to the old foum as I did a massive peice on this before.

Southampton Leisure holding is / was the parent company of the following companies.

 

Southampton Football Club Limited (pro football)

St Mary’s Stadium Limited (provision of football entertainment )

St Mary’s SPV Limited 100 (issuer of loan notes)

Southampton Insurance Services Limited (insurance)

Saints Radio Limited (radio broadcast)

Southampton Mortgage & Financial Centre Limited (non trading)

Secure Retirement Limited (non trading)

St Michael’s Street Homes (non trading)

Felix Broadcasting Limited (non trading)

South City FM Limited (non trading)

Forest FM Limited (non trading)

 

As we are aware Southampton Insurance Services Limited, Saints Radio Limited were sold off last year or so to other companies. This was all done without consultation with shareholders (i mean me and joe bloggs down the road). So in theory yes Southampton Football Club Limited could be sold off as could St Mary’s Stadium Limited. But my only question that wasnt answered before was, because this is the main revenue stream of the holding company would it need shareholder approval to sell SFC Ltd?

 

Is the main debt of the stadium held by SLH or St Mary’s Stadium Limited?

[70's Mike]

the way the fa have dished out points deductions over the last year , irrespective of which bit went into administration i think we would suffer a deduction of points

[Saint Fan CaM]

I have no shares.

 

The problem for administration for me is that the non playing staff and local companies supplying goods and services to SFC will suffer badly.

 

We would lose our best players (if we have any best players ) and we could lose Staplewood and our whole Academy Structure

 

 

Why would we lose our best players, Staplewood and the Academy? I would imagine they fall under the assets of SFC Ltd, therefore would be unaffected by the failure of the PLC surely?

 

Anyway, all this is also of some interest when thinking about the nightmare that is presented when considering how to sell the club to a prospective buyer. It's not a simple one is it?!

[eelpie]

Whatever happens to any of the parts, if administration is to happen it MUST be this season, so that we do not carry points deductions into League 1.

[Window Cleaner]

Whatever happens to any of the parts, if administration is to happen it MUST be this season, so that we do not carry points deductions into League 1.

 

It would seem to me that virtually all club going into administration in the last couple of years get an initial deduction of 10 pts and then another whack in the season afterwards.The FA seem to find a contravention for everybody so that you get hit twice. I see Bournemouth are still on -4 points this season in addition to the -10 they got last season.

Administration IS undesirable,not that it will stop people who 'know things' harping on about it though.

Administration can knock you 2 steps back on the snakes and ladders board these days.

[benjii]

Is the football club itself a company, and could it be separated completely from Southampton Leisure Holdings?

 

If so, is it possible that this is what Lowe and Co are getting ready to do?

 

If they could hive off the club as a business (temporarily at least) paying its way because they've got costs down to absolute rock bottom, could they then put SLH into Administration and then into liquidation?

 

Lowe wanted into SFC when a stadium was mooted at Stonham, but eventually was almost forced into going ahead with something he didn't really want - a stadium in Northam. Could he find an out from this now, getting rid of those debts but the same people still owning the ongoing football club?

 

I'd put nothing past Askham and Lowe in concert.

 

I readily admit I am no company law expert, but can anyone with the requisite knowledge comment on the possibility or otherwise of something like this happening?

 

The simple answer is that, if it is not the PLC which owes the debt, then you can bet your bottom dollar there will be a parent company guarantee in place in any case.

 

You can also bet your bottom dollar that the loan agreements in place allow the lender to take certain actions should th PLC divest itself of significant assets.

 

If neither of the above propositions are the case then the lenders have made monumental Steve McLaren Dutch interview-style ball bouncingly enormous ****-ups.

 

In other words, splitting the debt from the PLC will be of no benefit to the current shareholders unless the new owner of the football club can satisfy the lenders of their ability to service the debt.

 

(There are also various rules about transactions at an undervalue, wrongufl trading, etc.... which apply on insolvency, but there is no need to go there really).

 

I don't really think there is any way for the board or shareholders to weasel out of this in our situation. The way people have tried to ameliorate things like this in the past is by making themselves the major creditors (a la Ken Bates) and therefore being in a stronger position when the poop hits the air circulation unit. I think it's a pretty safe bet that neither Wilde or Lowe are about to take on that mantle any time soon.

[cambsaint]

Any item only has a value if somebody is prepared to buy it.

The open market value of SMS must be very low, as it has only one team willing and able to play there. Portsmouth could conceivably ground share for a few months while a new stadium was being completed, but although a joint stadium would work on the M27 corridor, it is inconceivable that they would be willing tenants.

Apart from a few odd concerts and other occasions, the only tenant who can reasonably use the stadium is Southampton FC.

The mortgagees are well aware of this.

The only way they are ever likely to get a return on the investment is if Saints continue to be a reasonably successful football club.

It is therefore in their interests to support Saints as much as possible, and fortunately they are able to take along view on the situation.

I suspect our problems are rather more mundane than the stadium debt; ie good old cash flow.

There is one way out of that -get more bums on seats by giving the paying public what they want- a successful club.

[SaintRichmond]

We could possibly put the part that owns the stadium into administration, and keep the football part going. The problem is that we'd then have nowhere to play.

 

There are a few pitches available at Stoneham, Saturdays and Sundays ...... reasonable rates apparently ............

......... you have to put the nets on the goals yourself though .......... and all posts and flags must be accouted for .........

[graymalkin33]

If SFC go into administration thi sseason it gets deducted pts.

If SFC is still in administration at the start of the new season it gets hit with a further points deduction.

[SaintRichmond]

Is the football club itself a company, and could it be separated completely from Southampton Leisure Holdings?

 

If so, is it possible that this is what Lowe and Co are getting ready to do?

 

If they could hive off the club as a business (temporarily at least) paying its way because they've got costs down to absolute rock bottom, could they then put SLH into Administration and then into liquidation?

 

Lowe wanted into SFC when a stadium was mooted at Stonham, but eventually was almost forced into going ahead with something he didn't really want - a stadium in Northam. Could he find an out from this now, getting rid of those debts but the same people still owning the ongoing football club?

 

I'd put nothing past Askham and Lowe in concert.

 

I readily admit I am no company law expert, but can anyone with the requisite knowledge comment on the possibility or otherwise of something like this happening?

 

 

I am no expert either ..........

 

But I am willing to bet, that WHEN Saints go into Administration, it will be the FOOTBALL side of things that will suffer ......... Lowe will have wangled a way that the PLC is protected ...........

[eelpie]

It would seem to me that virtually all club going into administration in the last couple of years get an initial deduction of 10 pts and then another whack in the season afterwards.The FA seem to find a contravention for everybody so that you get hit twice. I see Bournemouth are still on -4 points this season in addition to the -10 they got last season.

Administration IS undesirable,not that it will stop people who 'know things' harping on about it though.

Administration can knock you 2 steps back on the snakes and ladders board these days.

 

Are there not rules about points deductions by the FA and FL following administration? Surely it is not left to random decisions?

 

If what you say is true, then whatever league we were in, there would be another deduction the following year. Surely this can't be true. SFC and supporters had better get the facts correct.

[Window Cleaner]

Are there not rules about points deductions by the FA and FL following administration? Surely it is not left to random decisions?

 

If what you say is true, then whatever league we were in, there would be another deduction the following year. Surely this can't be true. SFC and supporters had better get the facts correct.

 

No it depends on getting a successful what is now CVA? is that it?

But the IR and the Excise (who administer VAT) don't play ball any more with cheap 10p in the £ buy backs so you're still in Admin and you get -15 points

(Bournemouth seem to have got -17 though).

 

Thus it boils down to this. If you owe money to the VAT and Revenue you're not going to get away with it lightly. If you don't and you can patch up something with the other creditors maybe you'll be OK.

The experts will no doubt correct me if I've understood it badly.

[eelpie]

No it depends on getting a successful what is now CVA? is that it?

But the IR and the Excise (who administer VAT) don't play ball any more with cheap 10p in the £ buy backs so you're still in Admin and you get -15 points

(Bournemouth seem to have got -17 though).

 

Thus it boils down to this. If you owe money to the VAT and Revenue you're not going to get away with it lightly. If you don't and you can patch up something with the other creditors maybe you'll be OK.

The experts will no doubt correct me if I've understood it badly.

 

So how does a club in administration get a successful CVA ( and what do the initials stand for?)

[bridge too far]

Company Voluntary Arrangements

[Window Cleaner]

So how do a club in administration get a successful CVA ( and what do the initials stand for?)

 

Creditors Voluntary Agreement.

Well the new company set up to take over the club has to agree with all non secured creditors to pay off a certain percentage of the outstanding debts on an equal basis (ie everybody gets the same).

So if the club (or company or whatever) have say 15 million in unsecured debts,

the new company may propose 20p in the £ (Luton was 16p I think) or 10p

or 30p ,until everybody agrees to accept that as full and final payment.

It seems that the IR and Excise don't accept these piddly 15p,20p in the

£ deals and no CVA is acceptable. Hence the old company does not exit administration by way of CVA.

 

Our problem is that SMS is a secured loan, on ticket sales and I suppose the stadium itself and that from what I can surmise even part of our bank lending is secured. Aviva and Barclays would take whatever they could get from the sale of assets

and everybody else (including ther IR and Excise) would be hung out to dry. It really depends what we owe other than the bank lending and SMS; Of that I've absolutely no idea. As we're increasing our bank borrowing it could be that we're not at all bad with other debts. But if the bank saw it coming well they just wouldn't sanction the cheques to other creditors and our other debts could rocket in very little time.

For instance, tonight's game. say 5000 ticket sales, that's £15000 quid or so vat on tickets alone. Add on the beer,programmes and whatever and suddenly we could run up another 30K debt to the Excise.Shop merchandise is heavily taxable. I've no idea what they sell in a day but if we stoped paying our VAT we could run up a £1 million bill in a week or so.

Edited 28 October, 2008 by Window Cleaner

[bridge too far]

And I think, to add to WC's explanation, that the Football League don't issue a certificate to play in the League until the CVA has been agreed?

[Window Cleaner]

And I think, to add to WC's explanation, that the Football League don't issue a certificate to play in the League until the CVA has been agreed?

 

They make exceptions but knock you back points.

Luton being the prime case.