What is the latest date...

[Pancake]

...we can go into administration and take the points hit THIS season as opposed to having it placed on us at the start of next season?

[eelpie]

...we can go into administration and take the points hit THIS season as opposed to having it placed on us at the start of next season?

 

"...will have to make a major decision by the third week of March.

That is whether to put the club into administration and take the Football League’s 10-point penalty this season. " according to Sale of The Daily Mail.

 

Imo, if it has to be, it must be done before it is too late this season.

[alpine_saint]

"

 

Imo, if it has to be, it must be done before it is too late this season.

 

Completely agree, in fact I cannot imagine anyone disagreeing.

 

This seasons mess must not spill over into next season. I reckon that could really kill the club off.

[Scummer]

Even if we took the 10 point hit this season, we'd still get an additional one next year as HMRC aren't accepting CVA's (?). Think the league have been hitting people with 17 point deductions for coming out of administration without a CVA.

[alpine_saint]

Even if we took the 10 point hit this season, we'd still get an additional one next year as HMRC aren't accepting CVA's (?). Think the league have been hitting people with 17 point deductions for coming out of administration without a CVA.

 

We dont owe HMRC, apparently. So there is no CVA that requires their agreement.

[Scummer]

We dont owe HMRC, apparently. So there is no CVA that requires their agreement.

 

We may not owe them at the minute, but unless we've stashed a load of funds away to pay future bills from them, we'll owe them in the future.

[Calvin]

There are far worst clubs in this league which are suffering from more debt.

We will be safe from admin, unless we go down.

Edited 21 January, 2009 by Calvin

[alpine_saint]

We may not owe them at the minute, but unless we've stashed a load of funds away to pay future bills from them, we'll owe them in the future.

 

So there may well be a secondary timing issue.

 

Does 10 or 17 points matter anyway this season ?

 

Does an extra bullet do harm if you#ve shot someone dead ?

[Charlie Wayman]

It's not as easy as some of you guys imagine. SMS Gates in the Third Division will average 8000 tops and usually less. No good looking at Leicester as an example, that kind of wishful thinking inflicted us for two years when we came down from the Prem and look where reality has landed us.

[Scummer]

So there may well be a secondary timing issue.

 

Does 10 or 17 points matter anyway this season ?

 

Does an extra bullet do harm if you#ve shot someone dead ?

 

Firstly, it's not a question of 10 points or 17, it would be 10 plus 17, 27 in total which I think is what a couple of teams started on this year?

 

My point was that if we go into admin and take the 10 point hit, it's unlikely that we'd get things sorted until the summer. We'd then have a further 17 point deduction to start next season with.

[trousers]

Friday 13th March knowing SFC....

[alpine_saint]

Firstly, it's not a question of 10 points or 17, it would be 10 plus 17, 27 in total which I think is what a couple of teams started on this year?

 

My point was that if we go into admin and take the 10 point hit, it's unlikely that we'd get things sorted until the summer. We'd then have a further 17 point deduction to start next season with.

 

How in fooks name can applying points deductions over two seasons be justified ?

 

If that is the case, we are not just looking at relegation, and administration, we are looking at winding-up within a couple of years as well if we dont find a buyer with money.

[Frank's cousin]

Point deductions:

 

-10 for going into admin - If taken before 3rd week in march points deducted this season so ideally we would be more than 10 points above the relegation zone - now unlikley

 

after that would be deducted next season so would start on -10

 

the -17 additional deduction is when a club fails to pay ALL football related debts in full - which is an FA rquirement as far as I understand it - often clubs struggle here because HMCR MUST be paid first as they will NOT accept CVAs.

 

At present the club has stated provision has been made on a monthly basis (in the audited accounts if I read it rightly) for all VAT/PAYE costs etc. and I dont believe we have any debts to other clubs, but I believe player contracts also come under the 'footballing debt'

[eelpie]

Point deductions:

 

-10 for going into admin - If taken before 3rd week in march points deducted this season so ideally we would be more than 10 points above the relegation zone - now unlikley

 

after that would be deducted next season so would start on -10

 

the -17 additional deduction is when a club fails to pay ALL football related debts in full - which is an FA rquirement as far as I understand it - often clubs struggle here because HMCR MUST be paid first as they will NOT accept CVAs.

 

At present the club has stated provision has been made on a monthly basis (in the audited accounts if I read it rightly) for all VAT/PAYE costs etc. and I dont believe we have any debts to other clubs, but I believe player contracts also come under the 'footballing debt'

 

I'm puzzled as to what constitutes a 'football related debt', since everything to do with SFC is football related, surely.. Except presumably SLH's 'other' business activities. Herein lies the crux.

[bridge too far]

I'm puzzled as to what constitutes a 'football related debt', since everything to do with SFC is football related, surely.. Except presumably SLH's 'other' business activities. Herein lies the crux.

 

I don't think 'football related debt' would apply, for example, to business rates, suppliers (utilities as an example), mortgage repayments etc.

 

I think it would only apply to player contracts and, as has been pointed out, HMRC.

[alpine_saint]

Point deductions:

 

-10 for going into admin - If taken before 3rd week in march points deducted this season so ideally we would be more than 10 points above the relegation zone - now unlikley

 

after that would be deducted next season so would start on -10

 

the -17 additional deduction is when a club fails to pay ALL football related debts in full - which is an FA rquirement as far as I understand it - often clubs struggle here because HMCR MUST be paid first as they will NOT accept CVAs.

 

At present the club has stated provision has been made on a monthly basis (in the audited accounts if I read it rightly) for all VAT/PAYE costs etc. and I dont believe we have any debts to other clubs, but I believe player contracts also come under the 'footballing debt'

 

So provided someone buys us with enough money to pay off the taxman first, what's the problem ?

[Pancake]

Point deductions:

 

-10 for going into admin - If taken before 3rd week in march points deducted this season so ideally we would be more than 10 points above the relegation zone - now unlikley

 

after that would be deducted next season so would start on -10

 

the -17 additional deduction is when a club fails to pay ALL football related debts in full - which is an FA rquirement as far as I understand it - often clubs struggle here because HMCR MUST be paid first as they will NOT accept CVAs.

 

At present the club has stated provision has been made on a monthly basis (in the audited accounts if I read it rightly) for all VAT/PAYE costs etc. and I dont believe we have any debts to other clubs, but I believe player contracts also come under the 'footballing debt'

 

Cheers Franky.

 

"Football Related Debts" is an interesting one. I assume this includes such things as outstanding payments on players/coachs, equipement payments, playing staff (inc pensions) and non-playing staff, and gate monies to other clubs etc. I would therefore assume that it DOESNT include things such as the stadium mortgage, catering contracts, utilities, "benefits" such as staff car loans etc.

[Ken Tone]

How in fooks name can applying points deductions over two seasons be justified ?

 

If that is the case, we are not just looking at relegation, and administration, we are looking at winding-up within a couple of years as well if we dont find a buyer with money.

 

Well they justified it for Bournemouth -- and was it Rotherham or Luton? Why did you think Bournemouth started on -17 this season and are now possibly about to go out of the league ?

 

It's as some posters keep trying to point out, administration is NASTY. If we end up owing tax, in effect we'll get -17 points next season as well as -10 this . At present I gather we do not owe taxes, but the danger is as we go absolutely skint will we be able to keep paying tax or will we go into debt there too?

 

K.

[Pancake]

OK, so here is a question.

 

Assumeing we did go into administration.. WHO is then responsible to paying the HMRC anything we owe them? Does it fall onto the heads of the major shareholders?

[Scummer]

"Football Related Debts" is an interesting one. I assume this includes such things as outstanding payments on players/coachs, equipement payments, playing staff (inc pensions) and non-playing staff, and gate monies to other clubs etc.

 

I think it means money owed to other members of the 'football family', for example the FA and other clubs. It's designed to ensure that other clubs don't suffer unduly as a result of a team going into administration.

 

HMRC don't come under football related debts as far as i'm aware.

[bridge too far]

OK, so here is a question.

 

Assumeing we did go into administration.. WHO is then responsible to paying the HMRC anything we owe them? Does it fall onto the heads of the major shareholders?

 

The Adminstrators, Pancake. They take over the day-to-day running of the business.

[Scummer]

OK, so here is a question.

 

Assumeing we did go into administration.. WHO is then responsible to paying the HMRC anything we owe them? Does it fall onto the heads of the major shareholders?

 

It's still the club that owes the money. If we are in administration the club still exists, it's just being run (administered) by someone else (the administrator).

 

Shareholder liability is limited to the value of their shares (at issue price, not market value).

[Pancake]

The Adminstrators, Pancake. They take over the day-to-day running of the business.

 

Ok,a nd this might sound daft (bear in mind Im an IT nerd and dont really care about finances) but would they generate the money for the HMRC buy selling off whatever they could?

 

Basically, what I want to know if, if we went into admin and owed HMRC, lets say, £5 Million... Lowe/Wilde/Crouch etc wouldnt be liable for this out of their own coffers, meaning the Administrators would HAVE to sell players or property to raise the money?

[bridge too far]

Ok,a nd this might sound daft (bear in mind Im an IT nerd and dont really care about finances) but would they generate the money for the HMRC buy selling off whatever they could?

 

Basically, what I want to know if, if we went into admin and owed HMRC, lets say, £5 Million... Lowe/Wilde/Crouch etc wouldnt be liable for this out of their own coffers, meaning the Administrators would HAVE to sell players or property to raise the money?

 

That's my understanding. But if, as has been said, there is money put aside for tax debts, I guess they'll raid that first.

 

What I don't know, and I'm sure someone will, is this. Assuming we're living off our overdraft, can the bank pull it as soon as we go into administration? If so, if that overdraft is financing our tax bill payments, does that mean, in fact, that we can't pay our tax bill?

[Whitey Grandad]

How in fooks name can applying points deductions over two seasons be justified ?

 

If that is the case, we are not just looking at relegation, and administration, we are looking at winding-up within a couple of years as well if we dont find a buyer with money.

Didn't Bournemouth have -10 points last season and -17 this? Luton have -30 this season for a variety of reasons.

[Matt SFC]

We should not take the points deduction this season, lets not give up.

We are 1 point away from 21st in the league (Watford) and out of the relegation zone

3 points away from 19th (Norwich) and 20th (Derby)

4 points from 18th (Nott'm Forest)

5 points from 17th (Blackpool)

6 points from 16th (Barnsley)

 

I can understand the negativity on this forum, but I do not think we should resign ourselves to relegation. We are not cut off like Charlton. If Jan and the squad get their acts together we can stay up!

[aintforever]

That's my understanding. But if, as has been said, there is money put aside for tax debts, I guess they'll raid that first.

 

What I don't know, and I'm sure someone will, is this. Assuming we're living off our overdraft, can the bank pull it as soon as we go into administration? If so, if that overdraft is financing our tax bill payments, does that mean, in fact, that we can't pay our tax bill?

 

Surely we must be able to cover the tax bill, we could flog that farm and the Staplewood dome etc for starters?

[Gemmel]

Could it be something to do with the end of March being the end of the financial year and if the auditors are not in a position to sign the accounts of as a going concern, SLH is unable to enter a new financial year?

 

That's a guess, not saying it is the reason

[bridge too far]

Surely we must be able to cover the tax bill, we could flog that farm and the Staplewood dome etc for starters?

 

I think the role of the administrator is to keep the business as a going concern until a buyer can be found.

 

The administrator also looks at assets and liabilities and uses one to pay the other.

 

So football related debts will be paid first and then whatever's left over is divided amongst the creditors.

 

If, for argument's sake, the administrator offers each creditor 1p for every £1 owed, HMRC will not accept this. They will object to the issue of the CVA. WIthout the CVA, the Football League will not grant the 'golden share' certificate. Without that certificate, the club will be subject to further points deduction on top of the points deduction for going into administration in the first place.

 

That's my take on the matter FWIW, but please someone correct me if I'm wrong

[VectisSaint]

If Jan and the squad get their acts together we can stay up!

Hence the negativity. Admire your optimism, but we have won 1 home game all season. Why do you think Jan will get his act together now, when he has had all season to do so and failed.

We are doomed.

[aintforever]

I think the role of the administrator is to keep the business as a going concern until a buyer can be found.

 

The administrator also looks at assets and liabilities and uses one to pay the other.

 

So football related debts will be paid first and then whatever's left over is divided amongst the creditors.

 

If, for argument's sake, the administrator offers each creditor 1p for every £1 owed, HMRC will not accept this. They will object to the issue of the CVA. WIthout the CVA, the Football League will not grant the 'golden share' certificate. Without that certificate, the club will be subject to further points deduction on top of the points deduction for going into administration in the first place.

 

That's my take on the matter FWIW, but please someone correct me if I'm wrong

 

To keep the club as a going concern then it is vital that HMRC gets paid, the club doesn't need Staplewood or that farm so the logical thing to do would be to sell these off.

 

Obviously depends on what is owed and what they are worth though.

[bridge too far]

To keep the club as a going concern then it is vital that HMRC gets paid, the club doesn't need Staplewood or that farm so the logical thing to do would be to sell these off.

 

Obviously depends on what is owed and what they are worth though.

 

This takes us back to posts concerning Jacksons Farm last summer (I think - or was it the summer before )

 

1. A major contractor has a 'first call' on the land but I think that expires this year (April?)

 

2. Wasn't there some thought that, as the farm was gifted to the club, there might be a covenant on it, meaning that any proceeds wouldn't go to SLH?

 

3. It will be worth Jack Sh*t for development at the moment and any proceeds from its sale would be small beer.

[Block 5]

I think the role of the administrator is to keep the business as a going concern until a buyer can be found.

 

The administrator also looks at assets and liabilities and uses one to pay the other.

 

So football related debts will be paid first and then whatever's left over is divided amongst the creditors.

 

If, for argument's sake, the administrator offers each creditor 1p for every £1 owed, HMRC will not accept this. They will object to the issue of the CVA. WIthout the CVA, the Football League will not grant the 'golden share' certificate. Without that certificate, the club will be subject to further points deduction on top of the points deduction for going into administration in the first place.

 

That's my take on the matter FWIW, but please someone correct me if I'm wrong

 

 

Let's also remember that Administrators are in business too.

They need paying for their services, and this would come from SLH.

Sometimes administrators are in and out pretty quick and don't make too much for themselves, however when they are running a business as a going concern for a longer period, rest assured that they will milk it for themselves as much as they can!

[Whitey Grandad]

Could it be something to do with the end of March being the end of the financial year and if the auditors are not in a position to sign the accounts of as a going concern, SLH is unable to enter a new financial year?

 

That's a guess, not saying it is the reason

I think it's more to do with League/FA regulations. They don't want clubs to go into administration 5 minutes after they are mathematically relegated. Otherwise if you're relegated you could take the -10 points this season and start next with a clean sheet in the lower division. This is what Leeds did.

[bridge too far]

Could it be something to do with the end of March being the end of the financial year and if the auditors are not in a position to sign the accounts of as a going concern, SLH is unable to enter a new financial year?

 

That's a guess, not saying it is the reason

 

I don't think our financial year starts in April, does it? Interim / full accounts are normally June / December aren't they?

 

If that's the case, I don't think the end of the tax year is significant.

[Ponty]

I think it's more to do with League/FA regulations. They don't want clubs to go into administration 5 minutes after they are mathematically relegated. Otherwise if you're relegated you could take the -10 points this season and start next with a clean sheet in the lower division. This is what Leeds did.

Correction, tried

[SaintRobbie]

Completely agree, in fact I cannot imagine anyone disagreeing.

 

This seasons mess must not spill over into next season. I reckon that could really kill the club off.

 

Yep - we must do it this season... BUT... it must be done at the latest possible time to give someone else a chance to turn things around.

 

If its late March - so be it. But NOT February Lowe NOT until we have fought hard for this football club's survival in the CCC.

[buctootim]

I think it's more to do with League/FA regulations. They don't want clubs to go into administration 5 minutes after they are mathematically relegated. Otherwise if you're relegated you could take the -10 points this season and start next with a clean sheet in the lower division. This is what Leeds did.

 

I would guess is that, if it came to it, it the intention would be to go into administration 5 minutes before we are mathematically relegated - thereby avoiding the FA sanctions for the following season.

[Whitey Grandad]

I would guess is that, if it came to it, it the intention would be to go into administration 5 minutes before we are mathematically relegated - thereby avoiding the FA sanctions for the following season.

This is probably wher the 'third week of March' comes into it. We would have to check the regulations but I'm sure that the club are looking at it even as we type.

[mills]

Imagine taking the -10 in march and then ending the season going down on equal points less goal difference. We could have been 10 points clear of the drop had we not gambled. That could be completely safe with 3 games to go!

 

At the moment we are a couple of wins away from safety and a good run away from a stable lower-mid table position so lets not get hasty yet. Now i'm off to find out where those couple of wins are going to come from.........

[Clapham Saint]

I think the role of the administrator is to keep the business as a going concern until a buyer can be found.

 

The administrator also looks at assets and liabilities and uses one to pay the other.

 

So football related debts will be paid first and then whatever's left over is divided amongst the creditors.

 

If, for argument's sake, the administrator offers each creditor 1p for every £1 owed, HMRC will not accept this. They will object to the issue of the CVA. WIthout the CVA, the Football League will not grant the 'golden share' certificate. Without that certificate, the club will be subject to further points deduction on top of the points deduction for going into administration in the first place.

 

That's my take on the matter FWIW, but please someone correct me if I'm wrong

 

This is pretty close. I hope that the below makes sense and of course that it isn’t too dull …

 

An administrator has various statutory obligations which I won’t bother to copy out in full here. However an administrator’s first objective would be to maintain the Business (i.e. the club not the company that owns it) as a going concern.

This will generally be done either by making operational changes (usually cost cutting) or by selling the business to new company.

The administrator then has a duty to realise as much money as possible for the benefit of all creditors. I haven’t reviewed the balance sheet in any detail but in the case of saints I would suspect that unsecured creditors wouldn’t get anything at all (because it would all go to Barclays and whomever it is that holds the fixed charge over the stadium). In a “normal company HMRC wouldn’t be offered anything, they would simply get what they were given.

I haven’t been involved with the administrations of any football clubs and so don’t know the F.A.’s rules in detail however an administrator is not allowed to pay off one unsecured creditor but not the others.

If the F.A. require all football related debts to be paid in full then this would mean that you would have to have to pay ALL creditors which is evidently not possible.

A CVA is a different process to an administration whereby creditors are asked to agree to accept a certain % of what they are actually owed (it is slightly more complicated than that but..) and the administrator would have to get a majority of the creditors to vote in favour of his offer. The creditors get a number votes in proportion to how much money they are owed.

Because HMRC are often the biggest unsecured creditor they often have the most votes and so can block a CVA proposal.

However with the number of companies struggling at the moment they are going to have to start soon or even more companies (not just football clubs) are going to end up disappearing entirely when they might otherwise have been able to trade through.

 

(I wonder how many people read this far... not many)

 

CS

[Scummer]

(I wonder how many people read this far... not many)

 

I did. Very interesting, thanks.

[Lord Duckhunter]

This is pretty close. I hope that the below makes sense and of course that it isn’t too dull …

 

An administrator has various statutory obligations which I won’t bother to copy out in full here. However an administrator’s first objective would be to maintain the Business (i.e. the club not the company that owns it) as a going concern.

This will generally be done either by making operational changes (usually cost cutting) or by selling the business to new company.

The administrator then has a duty to realise as much money as possible for the benefit of all creditors. I haven’t reviewed the balance sheet in any detail but in the case of saints I would suspect that unsecured creditors wouldn’t get anything at all (because it would all go to Barclays and whomever it is that holds the fixed charge over the stadium). In a “normal company HMRC wouldn’t be offered anything, they would simply get what they were given.

I haven’t been involved with the administrations of any football clubs and so don’t know the F.A.’s rules in detail however an administrator is not allowed to pay off one unsecured creditor but not the others.

If the F.A. require all football related debts to be paid in full then this would mean that you would have to have to pay ALL creditors which is evidently not possible.

A CVA is a different process to an administration whereby creditors are asked to agree to accept a certain % of what they are actually owed (it is slightly more complicated than that but..) and the administrator would have to get a majority of the creditors to vote in favour of his offer. The creditors get a number votes in proportion to how much money they are owed.

Because HMRC are often the biggest unsecured creditor they often have the most votes and so can block a CVA proposal.

However with the number of companies struggling at the moment they are going to have to start soon or even more companies (not just football clubs) are going to end up disappearing entirely when they might otherwise have been able to trade through.

 

(I wonder how many people read this far... not many)

 

CS

 

Thanks, however there's one question perhaps you could answer.

 

Leaving admin without a CVA carries a 15 point additional penalty from the League.

 

As you say Football League rules state all Football creditors need to be paid in full, to stop teams signing/paying players they cant afford. My understand is that this is the aspect that the IR object to, and hense their stance on CVA's connected to football Clubs. Would it be possible to pay all football creditors off in full and the IR. Would this solution mean the Revenue would drop their opposition to a CVA, and therefore we would avoid the points deduction.

[HertsSaint]

I was just looking at the accounts (don't ask) and noticed the following:

 

No value is ascribed to those players who have been developed within the Club Academy or those signed on a free transfer.

 

By insisting on having a squad of as many youth players as possible the balance sheet of the club shows no assets, and the financial situation appears much worse?

 

I'm not disputing it is a legitimate accounting practice - it could be used to make the club look like it has less assets, and increase the 'debt' of SLH.

[Clapham Saint]

Thanks, however there's one question perhaps you could answer.

 

Leaving admin without a CVA carries a 15 point additional penalty from the League.

 

As you say Football League rules state all Football creditors need to be paid in full, to stop teams signing/paying players they cant afford. My understand is that this is the aspect that the IR object to, and hense their stance on CVA's connected to football Clubs. Would it be possible to pay all football creditors off in full and the IR. Would this solution mean the Revenue would drop their opposition to a CVA, and therefore we would avoid the points deduction.

 

The exact rules I'm afraid that I would have to go away and look up but in practical terms I'm afraid that you couldn't. (Thinking off the top of my head) The only way would be if ALL other creditors were to sign away their claim then maybe but I really couldn't see that happening.

 

As to how the revenue would act, I find that when negotiating with the revenue it really does tend to depend upon who answers the phone at their end. In my experience they are very inconsistent however if they have a specific policy on football clubs then they may be unwilling to vary from it.

 

Also, with regard to setting aside money to pay HMRC each month - if a company goes into admin it doesn't matter what the directors had been intending to spend money on, it all goes into the "pot" and couldn't be paid to one unsecured creditor in favour of others.

[Whitey Grandad]

The exact rules I'm afraid that I would have to go away and look up but in practical terms I'm afraid that you couldn't. (Thinking off the top of my head) The only way would be if ALL other creditors were to sign away their claim then maybe but I really couldn't see that happening.

 

As to how the revenue would act, I find that when negotiating with the revenue it really does tend to depend upon who answers the phone at their end. In my experience they are very inconsistent however if they have a specific policy on football clubs then they may be unwilling to vary from it.

 

Also, with regard to setting aside money to pay HMRC each month - if a company goes into admin it doesn't matter what the directors had been intending to spend money on, it all goes into the "pot" and couldn't be paid to one unsecured creditor in favour of others.

Aren't HMRC preferential creditors?

[Gemmel]

Aren't HMRC preferential creditors?

 

Yes, they get first dibs at the pot

[Clapham Saint]

Aren't HMRC preferential creditors?

 

Yes, they get first dibs at the pot

 

No!!!!!

 

They used to be but they aren't anymore.

 

The link below may be too much for some but the intro is...

 

References to Crown preference have been removed. HMRC does not have preferential status in the distribution of the assets of an insolvent estate. The former Departments of Customs & Excise and Inland Revenue both lost preferential status on 15 September 2003 under the provisions of the Enterprise Act 2002. At the time of publishing, the Crown still has preferential status in the distribution of the assets of insolvent businesses in Northern Ireland.

 

http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageVAT_ShowContent&id=HMCE_CL_000122&propertyType=document

Edited 21 January, 2009 by Clapham Saint

[bridge too far]

This gives quite a useful insight into creditors etc.

 

http://news.bbc.co.uk/1/hi/uk/7741859.stm

[saint.tom.clancy]

It's not as easy as some of you guys imagine. SMS Gates in the Third Division will average 8000 tops and usually less. No good looking at Leicester as an example, that kind of wishful thinking inflicted us for two years when we came down from the Prem and look where reality has landed us.

 

TBH i dont think we will go down from the current 15000 who stick with the sh!te week in week out IF lowe was to go