In laymans terms, what will administration mean?

[Colinjb]

As I understand it, Administration will occur because we are insolvent, therefore:

 

Players and staff wages, plus bills (ammenities and stadium mortgage) cannot be paid for by income.

 

The club is substantially in debt, and owes money on the stadium which also needs to be paid each month.

 

My main concerns and questions are.

 

a) What happens to the players?

b) What happens to the stadium?

c) What happens to the shareholders?

d) What happens to the board of directors?

 

I am asking in the most basic terms possible just to be sure that myself (and other forum users) are totally clear on the repercussions.

[ALWAYS_SFC]

We are ****ed:smt078

[alpine_saint]

Somebody on TUI is going on about a variant of Administration, call Temporary Voluntary Administration, which allows Lowe to keep his shares and running the club as long as he flogs off everything.

 

F**king hell, that's the worst of all worlds. Does he hate us that much that he's getting a kick out of destroying our club ?

 

Askham - this is all your f**king fault...

[aintforever]

How on earth can Voluntary Administration make sense, we are only 1 point from safety?

[alpine_saint]

How on earth can Voluntary Administration make sense, we are only 1 point from safety?

 

It keeps Lowe in control and in pocket.

 

Hasnt the penny dropped yet ? This is all about what is best for Lowe, not SFC.

[SaintRobbie]

How on earth can Voluntary Administration make sense, we are only 1 point from safety?

 

My thoughts exactly - why give up when before the last safe moment? What is Lowe planning? What has he been planning? He has been slagging off Crouch since November/December over this in order to prepare for this IMHO - to divert blame.

 

What is Lowe planning?

 

I DO NOT TRUST HIM.

[SaintRobbie]

It keeps Lowe in control and in pocket.

 

Hasnt the penny dropped yet ? This is all about what is best for Lowe, not SFC.

 

Yes, but what else is he planning? Too simple. If it happens we must lose this plc forever. We must lose its chief engineer forever... but will we?

[bridge too far]

How on earth can Voluntary Administration make sense, we are only 1 point from safety?

 

The fact is that if the company is insolvent, it HAS to declare this. It is illegal for a company to continue to trade knowing that it is insolvent.

 

Maybe there are some big bills coming up for settlement and there isn't the money to pay them :smt102

[saintwarwick]

As I understand it, Administration will occur because we are insolvent, therefore:

 

Players and staff wages, plus bills (ammenities and stadium mortgage) cannot be paid for by income.

 

The club is substantially in debt, and owes money on the stadium which also needs to be paid each month.

 

My main concerns and questions are.

 

a) What happens to the players?

b) What happens to the stadium?

c) What happens to the shareholders?

d) What happens to the board of directors?

 

I am asking in the most basic terms possible just to be sure that myself (and other forum users) are totally clear on the repercussions.

 

http://www.thefa.com/Features/EnglishDomestic/Postings/2003/06/51480.htm

 

Here's a brief explanation Colin.

[wild-saint]

http://www.thefa.com/Features/EnglishDomestic/Postings/2003/06/51480.htm

 

Here's a brief explanation Colin.

 

 

So after reading the link on administration, can anyone tell me a reason why we should opt for this route to get rid of lowe? and also how boycotting games thus reducing income and driving us closer to administration will help my club in any way shape or form??

[Charlie Wayman]

Going into Administration allows a period of time for the company to try to find a buyer whilst all other day-to-day business activities continue. A buyer would have to make arrangements to take over the company's debts as well as buy the club so it isn't just a case of (any one person) buying the company for a quid, the £27.5m debt is not written off at this stage. Only if a buyer is not found during the administration period does the company pass into the hands of a receiver when all creditors will form an orderly queue to gain what recompense they can from a sale of the company's assets, i.e., players, buildings etc. We st holders will be creditors and will have to join the queue.

 

If a new company is then formed to buy and operate the football team even if they have to play at Millbrook recreation ground, we ST holders will be back to square one and have to pay all over again to watch the new team.

[Window Cleaner]

So after reading the link on administration, can anyone tell me a reason why we should opt for this route to get rid of lowe? and also how boycotting games thus reducing income and driving us closer to administration will help my club in any way shape or form??

 

 

 

Fans" boycotting" games doesn't really help anyone. But it makes them feel good and they don't have to own up that they've stopped going because we're crap or that they're skint or just not interested .

 

In the good old days lots of people did that, it was no big deal, you didn't have to go to every game to be considered a good fan.People went to whatever games they wanted, there was no perpetual d*ck measuring contest to see who was a better fan.

[Ken Tone]

As I understand it, Administration will occur because we are insolvent, therefore:

 

Players and staff wages, plus bills (ammenities and stadium mortgage) cannot be paid for by income.

 

The club is substantially in debt, and owes money on the stadium which also needs to be paid each month.

 

My main concerns and questions are.

 

a) What happens to the players?

b) What happens to the stadium?

c) What happens to the shareholders?

d) What happens to the board of directors?

 

I am asking in the most basic terms possible just to be sure that myself (and other forum users) are totally clear on the repercussions.

 

Here is what I posted on the 9th>>>>>

 

I feel obliged to say clearly at the start of this post so that some might actually read it rather than just react to it in blind prejudice --- that I do not like Lowe, like Wilde even less, and whilst accepting his good motives, simply do not rate Crouch as being very clever.

 

There seem to be some fans who see administration as a minor inconvenience, worth suffering to get rid of Lowe.

 

a) Administration is much worse than that. The administrator's job is not to run a good football club; it is to run any sort of football club, with the main aim of getting money back for the creditors. He looks for a buyer but his main responsibility is to see creditors get their money. Keeping the club viable in the short term is a secondary aim in achieving that. Keeping it viable in the long term is no priority at all.

 

So unless a big investor suddenly appeared to buy us up and pay off all the debts etc ( about as likely as us getting promotion this year) the administrator would sell off anything sellable, including all our young talent, probably at a 'fire sale' bargain price, release on free transfers any other players he can persuade to go, and sell the ground too if he can get a buyer who will guarantee *for the short term only* to lease it back. No guarantee not to evict the club and use for housing in a few years time once the recession is over. Many more 'incidental' staff would lose their jobs ...stewards, kitman, ticket office, etc. Training ground would be sold. The academy would almost certainly close completely, with all facilities sold off.

 

b) There would be a fair chance that Lowe would then re-buy his way into the club for a nominal sum. Bates did it. Didn't one of the many recent owners of Bournemouth do it too? It is not uncommon for management or other insider buy-outsto follow administration in industry .

 

 

So we could go though real pain, and then still have Lowe.

 

Do not wish administration on the club if you really are a fan.

 

K.

 

The situation is still the same, but as a minor addition I'll add that presumably all loan players would immediately be returned to their clubs. But on the bright side, in response to someone else's comment about season tickets, I think that we were given reassurance about that last year, to the effect that as long as the club remained trading, season tickets were safe.

 

K.

[wild-saint]

Going into Administration allows a period of time for the company to try to find a buyer whilst all other day-to-day business activities continue. A buyer would have to make arrangements to take over the company's debts as well as buy the club so it isn't just a case of (any one person) buying the company for a quid, the £27.5m debt is not written off at this stage. Only if a buyer is not found during the administration period does the company pass into the hands of a receiver when all creditors will form an orderly queue to gain what recompense they can from a sale of the company's assets, i.e., players, buildings etc. We st holders will be creditors and will have to join the queue.

 

If a new company is then formed to buy and operate the football team even if they have to play at Millbrook recreation ground, we ST holders will be back to square one and have to pay all over again to watch the new team.

 

A club can be in administration for 12 months. WE have not found a bujyer in the last 2 years. Do we really think someone will jump in with thier money now, particularly in a time when the economy is in downturn?

 

I

[JohnnyFartPants]

Somebody on TUI is going on about a variant of Administration, call Temporary Voluntary Administration, which allows Lowe to keep his shares and running the club as long as he flogs off everything.

 

F**king hell, that's the worst of all worlds. Does he hate us that much that he's getting a kick out of destroying our club ?

 

Askham - this is all your f**king fault...

 

Someone on TUI you say? This sounds like it must be 100% ironed on fact then. I suggest we switch off from the whole situation now as TUI font of knowledge has told us what will happen.

[londonsaint1604]

Somebody on TUI is going on about a variant of Administration, call Temporary Voluntary Administration, which allows Lowe to keep his shares and running the club as long as he flogs off everything.

 

F**king hell, that's the worst of all worlds. Does he hate us that much that he's getting a kick out of destroying our club ?

 

Askham - this is all your f**king fault...

 

Oh right, so 'someone on TUI is going on about' something, therefore we have conclusive proof that Lowe is deliberately destroying the club for fun. You really do sound like a complete idiot sometimes.

[SaintRobbie]

Do Season Ticket Holders lose their money if the Club goes under and ceases to 'trade'?

[ThorpG]

Do Season Ticket Holders lose their money if the Club goes under and ceases to 'trade'?

In a word, Yes. The administrators would need to come to arrangements with all creditors with regards to any moey owed by the club- we would not be regarded as creditors as we are not technically 'owed' any money by the club.

[Chez]

Do Season Ticket Holders lose their money if the Club goes under and ceases to 'trade'?

 

you could try to make a claim for the cost of the remaining unplayed games (assuming we do not play them) but you'll be at the back of a long queue of creditors whose debts are real. Besides I'd expect to only get a few pence in the pound anyway looking at the size of our debt.

 

Administration is the very last thing we want. People make light of it on here because they think it will see the end of Lowe. It won't. I'd bet my bottom dollar Lowe and pals already have a proposal in the offing should administration take place.

 

The current encumbants have a huge advantage over outsiders when it comes to negotiating a deal. They know all the facts and tend to be much better prepared.

 

I would be wary of any small loans that Lowe and pals have will offer the club in the next few months as being a creditor will enable him to have a say whether or not agree to any offer made in a cva.

 

I believe (I might be wrong) that Bates (as a major creditor) effectively turned down any offers made ensuring his own offer was accepted. I'm not sure Lowe has the wedge to dictate as Bates did, but those at the rudder can work things to their advantage thats for sure.

[Window Cleaner]

In a word, Yes. The administrators would need to come to arrangements with all creditors with regards to any moey owed by the club- we would not be regarded as creditors as we are not technically 'owed' any money by the club.

 

Wrong. When Luton went into admin their ST holders were considered as creditors for the unexpired portion of their ST, they each got all the admin bumf from the administrators with all the whys, wherefores and debts on it;

[70's Mike]

Here is what I posted on the 9th>>>>>

 

I feel obliged to say clearly at the start of this post so that some might actually read it rather than just react to it in blind prejudice --- that I do not like Lowe, like Wilde even less, and whilst accepting his good motives, simply do not rate Crouch as being very clever.

 

There seem to be some fans who see administration as a minor inconvenience, worth suffering to get rid of Lowe.

 

a) Administration is much worse than that. The administrator's job is not to run a good football club; it is to run any sort of football club, with the main aim of getting money back for the creditors. He looks for a buyer but his main responsibility is to see creditors get their money. Keeping the club viable in the short term is a secondary aim in achieving that. Keeping it viable in the long term is no priority at all.

 

So unless a big investor suddenly appeared to buy us up and pay off all the debts etc ( about as likely as us getting promotion this year) the administrator would sell off anything sellable, including all our young talent, probably at a 'fire sale' bargain price, release on free transfers any other players he can persuade to go, and sell the ground too if he can get a buyer who will guarantee *for the short term only* to lease it back. No guarantee not to evict the club and use for housing in a few years time once the recession is over. Many more 'incidental' staff would lose their jobs ...stewards, kitman, ticket office, etc. Training ground would be sold. The academy would almost certainly close completely, with all facilities sold off.

 

b) There would be a fair chance that Lowe would then re-buy his way into the club for a nominal sum. Bates did it. Didn't one of the many recent owners of Bournemouth do it too? It is not uncommon for management or other insider buy-outsto follow administration in industry .

 

 

So we could go though real pain, and then still have Lowe.

 

Do not wish administration on the club if you really are a fan.

 

K.

 

The situation is still the same, but as a minor addition I'll add that presumably all loan players would immediately be returned to their clubs. But on the bright side, in response to someone else's comment about season tickets, I think that we were given reassurance about that last year, to the effect that as long as the club remained trading, season tickets were safe.

 

K.

 

think difference may be Ken Bates was BIGGEST Creditor and Leeds was not a PLC.

Cannot believe we owe Rupert anything

[Window Cleaner]

think difference may be Ken Bates was BIGGEST Creditor and Leeds was not a PLC.

Cannot believe we owe Rupert anything

 

Here is the full bx on Leeds Utd,administration and Ken Bates;

It dispel a lot of urban myths about who owed what and to whom.

http://www.mightyleeds.co.uk/seasons/200405part2.htm

[broncoboy]

If were to go into administration get relegated and start the next season with a ten point deficiet the the prospect of Sir Rupert buying the club would certainly be a scary one.

 

If the fans saw him take control STs would fall to the floor.

 

I for one would never attend another match.

 

Personally I think he would be in danger of physical violence from some of our more "mental " fans.

[Window Cleaner]

I note that all yesterdays kerfuffle has knocked a further 2p off of the share price.I fear for Forester actually, he may get hit by a law suit from some ****ed off shareholder or other.

[Weston Saint]

I note that all yesterdays kerfuffle has knocked a further 2p off of the share price.I fear for Forester actually, he may get hit by a law suit from some ****ed off shareholder or other.

No that was one sale. Still trading on the LSE at bid 22p sell 21p with quotation standing firm at 21.5p

[Window Cleaner]

No that was one sale. Still trading on the LSE at bid 22p sell 21p with quotation standing firm at 21.5p

 

Nevertheless he should have checked his facts. No doubt he will be asked to name his source.

[del boy]

Fans" boycotting" games doesn't really help anyone. But it makes them feel good and they don't have to own up that they've stopped going because we're crap or that they're skint or just not interested .

 

In the good old days lots of people did that, it was no big deal, you didn't have to go to every game to be considered a good fan.People went to whatever games they wanted, there was no perpetual d*ck measuring contest to see who was a better fan.

Good to see a sensible post every few weeks

[Clapham Saint]

Do Season Ticket Holders lose their money if the Club goes under and ceases to 'trade'?

 

In a word, Yes. The administrators would need to come to arrangements with all creditors with regards to any moey owed by the club- we would not be regarded as creditors as we are not technically 'owed' any money by the club.

 

Season ticket holders would be able to make a claim for for the value of the proportion of the season ticket that you could not use as a result of teh club ceasing to trade. For the sake of making the numbers easy... If your season tiket cost £380 (£20 per game) and the club didn't play it's last 2 home games you would be able to claim £40 in the administration.

 

However as your claim would be unsecured and so you would probably only receive (say) 2p in the pound and so would only actually get a cheque for 80p....

 

 

[Edit: I've realised that we play more than 19 games a season now... damn. But can't be bothered to change my figures]

Edited 22 January, 2009 by Clapham Saint

[SaintRobbie]

you could try to make a claim for the cost of the remaining unplayed games (assuming we do not play them) but you'll be at the back of a long queue of creditors whose debts are real. Besides I'd expect to only get a few pence in the pound anyway looking at the size of our debt.

 

Administration is the very last thing we want. People make light of it on here because they think it will see the end of Lowe. It won't. I'd bet my bottom dollar Lowe and pals already have a proposal in the offing should administration take place.

 

The current encumbants have a huge advantage over outsiders when it comes to negotiating a deal. They know all the facts and tend to be much better prepared.

 

I would be wary of any small loans that Lowe and pals have will offer the club in the next few months as being a creditor will enable him to have a say whether or not agree to any offer made in a cva.

 

I believe (I might be wrong) that Bates (as a major creditor) effectively turned down any offers made ensuring his own offer was accepted. I'm not sure Lowe has the wedge to dictate as Bates did, but those at the rudder can work things to their advantage thats for sure.

 

This is so important - deserves to be a discussion thread in its own right. I think you might be right.

[SaintRobbie]

If were to go into administration get relegated and start the next season with a ten point deficiet the the prospect of Sir Rupert buying the club would certainly be a scary one.

 

If the fans saw him take control STs would fall to the floor.

 

I for one would never attend another match.

 

Personally I think he would be in danger of physical violence from some of our more "mental " fans.

 

I think this absolutely true. ST sales will fall in League 1 anyway but with Lowe still connected would fall even more.

 

Also, I think - sadly - we are only one step away from physical violence on Lowe and Boardmembers by certain individuals. I really think it's going to happen. If it does it would be a big shot in the foot with regards to selling this Club to a new buyer... who'd want to bail us out if he knew that he'd be getting beaten to a pulp if he failed?

 

Won't stop certain people though.

[southbourne saint]

The fact is we have no control over what happens 4-5 for relegation seems a bet worth taking. Not sure i can bring myself to do it. Should the Saints Trust invest this way and they might increase their say in the club at the end of the day

[Window Cleaner]

Bad news, that's what administration means.

[aintforever]

Does anyone know if the set up of the company (SLH holding company etc) and being a PLC likley to make the administration process more or less messy than previous clubs?

 

Also how will the credit crunch/recession effect things - will it screw us over or would a football club seem comparitively a slightly less risky investment in this climate?

[Rational Rich]

Somebody on TUI is going on about a variant of Administration, call Temporary Voluntary Administration, which allows Lowe to keep his shares and running the club as long as he flogs off everything.

 

F**king hell, that's the worst of all worlds. Does he hate us that much that he's getting a kick out of destroying our club ?

 

Askham - this is all your f**king fault...

 

As a banking lawyer and someone who has previously worked for insolvency practitioners, including running companies in administration, there is no such thing as voluntary administration which is different from any other type of administration.

 

Administrators generally are appointed by the court, by a creditor holding a type of security called a "qualifying floating charge" (most banks/funders would ensure they had this from their customers) or by the directors if they believe the company is insolvent (the penalty of not doing so is being done for "wrongful trading" i.e. incurring further debts knowing you have no chance of paying off the creditors (i.e. those who are owed money)).

 

However you go into administration, the administrator has a duty to act in the best interests of all creditors (i.e. not in the best interests of shareholders, fans, directors, league positions etc) and to try, if possible, to ensure the company/business continues as a going concern (so we don't end up in liquidation, which is the end).

 

Ken Tone above is right. Being in administration is not nice, would result in any saleable assets being sold (unless someone comes in and buys the lot to keep the club going), redundancies and people who have even less connection with our club than anyone in the boardroom in the last 5 years running the club and making the decisions.

 

It is the second worst of all options (the worst being liquidation).

 

Having been there and seen it (admittedly not with a football club), admin should be avoided at all costs, even if the costs are Lowe, Jan, Wilde, the academy in the first team, surman going, Lallana going, relegation etc etc etc. If we go into admin, you can kiss goodbye to premiership hopes for a long, long, long time (unless a paul allen type comes in and wants to chuck away his fortune).

 

A bit of a brief and potted explanation, clearly it is not as straightforward as set out above, but it's 7pm, I'm still at work with a massive document to get into typing (so not going home any time soon), but just wanted to quickly add my two penneth.

[saintwarwick]

A club can be in administration for 12 months. WE have not found a bujyer in the last 2 years. Do we really think someone will jump in with thier money now, particularly in a time when the economy is in downturn?

 

I

 

In June 2002 Notts County went into administration that lasted until December 2003, 18 months. I know we have struggled to find a buyer but I'm sure if we went into administration (not an option for me having experienced it with two previous companies) something will turn up to prevent us from folding. Only one football league has folded in the last 40 odd years (Aldershot) and many a club have been in administration during that time and survived.

[SaintRobbie]

As a banking lawyer and someone who has previously worked for insolvency practitioners, including running companies in administration, there is no such thing as voluntary administration which is different from any other type of administration.

 

Administrators generally are appointed by the court, by a creditor holding a type of security called a "qualifying floating charge" (most banks/funders would ensure they had this from their customers) or by the directors if they believe the company is insolvent (the penalty of not doing so is being done for "wrongful trading" i.e. incurring further debts knowing you have no chance of paying off the creditors (i.e. those who are owed money)).

 

However you go into administration, the administrator has a duty to act in the best interests of all creditors (i.e. not in the best interests of shareholders, fans, directors, league positions etc) and to try, if possible, to ensure the company/business continues as a going concern (so we don't end up in liquidation, which is the end).

 

Ken Tone above is right. Being in administration is not nice, would result in any saleable assets being sold (unless someone comes in and buys the lot to keep the club going), redundancies and people who have even less connection with our club than anyone in the boardroom in the last 5 years running the club and making the decisions.

 

It is the second worst of all options (the worst being liquidation).

 

Having been there and seen it (admittedly not with a football club), admin should be avoided at all costs, even if the costs are Lowe, Jan, Wilde, the academy in the first team, surman going, Lallana going, relegation etc etc etc. If we go into admin, you can kiss goodbye to premiership hopes for a long, long, long time (unless a paul allen type comes in and wants to chuck away his fortune).

 

A bit of a brief and potted explanation, clearly it is not as straightforward as set out above, but it's 7pm, I'm still at work with a massive document to get into typing (so not going home any time soon), but just wanted to quickly add my two penneth.

 

So what you're saying Rich is that the only hope is to get out there and find a buyer?

[SaintRobbie]

Rich, sorry but you seem to indeed be a rational chap...

 

I think Lowe's up to something. Hypothetically of course, based on your experience, what would Lowe have to gain personally by putting the club into administration? In your opinion.

[Clapham Saint]

A club can be in administration for 12 months. WE have not found a bujyer in the last 2 years. Do we really think someone will jump in with thier money now, particularly in a time when the economy is in downturn?

 

I

 

In June 2002 Notts County went into administration that lasted until December 2003, 18 months. I know we have struggled to find a buyer but I'm sure if we went into administration (not an option for me having experienced it with two previous companies) something will turn up to prevent us from folding. Only one football league has folded in the last 40 odd years (Aldershot) and many a club have been in administration during that time and survived.

 

By default an administration only lasts 12 months. However the administrator can apply to extrend it (and they frequently do).

 

CS

[Rational Rich]

Rich, sorry but you seem to indeed be a rational chap...

 

I think Lowe's up to something. Hypothetically of course, based on your experience, what would Lowe have to gain personally by putting the club into administration? In your opinion.

 

I think Lowe will attempt avoid administration at all costs, providing that he does not breach his duties as a director (which could impact on his other business interests). To buy the business from the administrators, he and any other buyer would have to get funding to pay enough for it to outstrip any other offers or the amount that would be realised from ceasing trading and selling the assets piecemeal. And even blue chip credits are struggling for funding at the moment.

 

Also, once in administration, the administrators will make all the decisions instead of the directors (who lose their powers but not their duties).

 

I can't see that there is an incentive for Lowe to put the company down, other than if it is insolvent without realistic hope of being able to trade back into solvency.

 

It may be a rough ride and no doubt he will have to make decisions which split the fanbase further, but as mentioned above, in my opinion playing a team of 11 year olds, getting relegated and having Mr Tumble as manager would be better than the uncertainty and pain that comes with administration, not to mention the points deductions this and (depending on the outcome of the adminstration as with Leeds, Bournemouth etc) next season.

[Fitzhugh Fella]

Here is what I posted on the 9th>>>>>

 

I feel obliged to say clearly at the start of this post so that some might actually read it rather than just react to it in blind prejudice --- that I do not like Lowe, like Wilde even less, and whilst accepting his good motives, simply do not rate Crouch as being very clever.

 

There seem to be some fans who see administration as a minor inconvenience, worth suffering to get rid of Lowe.

 

a) Administration is much worse than that. The administrator's job is not to run a good football club; it is to run any sort of football club, with the main aim of getting money back for the creditors. He looks for a buyer but his main responsibility is to see creditors get their money. Keeping the club viable in the short term is a secondary aim in achieving that. Keeping it viable in the long term is no priority at all.

 

So unless a big investor suddenly appeared to buy us up and pay off all the debts etc ( about as likely as us getting promotion this year) the administrator would sell off anything sellable, including all our young talent, probably at a 'fire sale' bargain price, release on free transfers any other players he can persuade to go, and sell the ground too if he can get a buyer who will guarantee *for the short term only* to lease it back. No guarantee not to evict the club and use for housing in a few years time once the recession is over. Many more 'incidental' staff would lose their jobs ...stewards, kitman, ticket office, etc. Training ground would be sold. The academy would almost certainly close completely, with all facilities sold off.

 

b) There would be a fair chance that Lowe would then re-buy his way into the club for a nominal sum. Bates did it. Didn't one of the many recent owners of Bournemouth do it too? It is not uncommon for management or other insider buy-outsto follow administration in industry .

 

 

So we could go though real pain, and then still have Lowe.

 

Do not wish administration on the club if you really are a fan.

 

K.

 

The situation is still the same, but as a minor addition I'll add that presumably all loan players would immediately be returned to their clubs. But on the bright side, in response to someone else's comment about season tickets, I think that we were given reassurance about that last year, to the effect that as long as the club remained trading, season tickets were safe.

 

K.

 

I have it on good authority that if we do go into administration then Lowe and a few of his friends will buy Southampton FC, lock, stock and barrel.

[The Rover]

My guess is that the club will not be put into Administration. Aviva (Norwich Union) and Barclays would lose most of their money if this happened. I think they would far rather do a deal with Lowe.

 

This can happen if the Directors propose to go for a CVA (Company Voluntary Arrangement) without first going into Administration..

 

Details are here:

 

http://www.one2threecommercial.co.uk/cva.htm

 

From the article:

 

"A CVA can be set up when a company is in liquidation or in an administration, as well as at any other time."

 

Again from the article:

 

"Before the Company Voluntary Arrangement proposal is made, it is possible to make an application to court for a moratorium which prevents creditors from taking action against the company or its property for up to 28 days,.."

 

and

 

" When the CVA has been proposed, a nominee (A licensed Insolvency Practitioner) reports to court on whether a meeting of creditors and shareholders should be held to consider the proposal.

 

The creditors meeting decides whether to approve the CVA. If 75% of the creditors agree to the proposal (75% of the value of debts held by the creditors who actually vote), it is then binding. Any creditors who do not vote and had notice of the meeting are bound by the terms of the arrangement."

 

Presumably the League would not deduct points if this happened?

 

My bet is that Rupert & Co will follow this route if it doesn't.

[bridge too far]

My guess is that the club will not be put into Administration. Aviva (Norwich Union) and Barclays would lose most of their money if this happened. I think they would far rather do a deal with Lowe.

 

This can happen if the Directors propose to go for a CVA (Company Voluntary Arrangement) without first going into Administration..

 

Details are here:

 

http://www.one2threecommercial.co.uk/cva.htm

 

From the article:

 

"A CVA can be set up when a company is in liquidation or in an administration, as well as at any other time."

 

Again from the article:

 

"Before the Company Voluntary Arrangement proposal is made, it is possible to make an application to court for a moratorium which prevents creditors from taking action against the company or its property for up to 28 days,.."

 

and

 

" When the CVA has been proposed, a nominee (A licensed Insolvency Practitioner) reports to court on whether a meeting of creditors and shareholders should be held to consider the proposal.

 

The creditors meeting decides whether to approve the CVA. If 75% of the creditors agree to the proposal (75% of the value of debts held by the creditors who actually vote), it is then binding. Any creditors who do not vote and had notice of the meeting are bound by the terms of the arrangement."

 

Presumably the League would not deduct points if this happened?

 

My bet is that Rupert & Co will follow this route if it doesn't.

 

Presumably HMRC will be in that group. So I suppose it will depend on how much (if anything) the PLC owes HMRC. But I guess Aviva + Barclays probably at least equals the required 75%?

[Rational Rich]

I have it on good authority that if we do go into administration then Lowe and a few of his friends will buy Southampton FC, lock, stock and barrel.

 

But only if their bid represents the best realisation of the assets of the company by the administrator. Another bidder/consortium could put a better offer on the table and the administrator would be duty bound to accept it.

[The Rover]

Presumably HMRC will be in that group. So I suppose it will depend on how much (if anything) the PLC owes HMRC. But I guess Aviva + Barclays probably at least equals the required 75%?

 

I believe it is often HMRC who pull the plug on companies. If Rupert is planning this, he will make sure that the VAT and PAYE payments are reasonably up to date before proposing the CVA. If he does it the way I've suggested he and the other Directors choose the timing.

 

This would also explain why there has been no fire sale of players this month. Rupert is actually planning to keep us in the CCC.

 

I f he pulls this off he will be expecting to be seen as the Saviour of Saints. What a thought. :confused:

[up and away]

The one thing that really concerns me is losing St Mary's. In normal times I don't believe this would be a major concern, but in the current economic climate I believe this to be a real possibility. The stadium is no real use to anyone else and with the planning approval restrictions that locks that in to the football. But if we go into administration it would not surprise me to see NU want to get shot of the liability at a bargain price. It then depends upon who would pick up the stadium and what their intentions were. If the price was right I could see picking up St Mary's as a good investment long term. You would initially be getting revenue from the club for allowing games to be played, which although not bringing in high returns, enough to make the investment hold it's own for that period. Then sometime down the road when the property market has recovered to sufficiently high levels, up goes the rent to a level the club can no longer sustain. The property will still have the same planning restrictions upon it, but given a year or two of St Mary's lying empty, I am sure the council would gladly look at some redevelopement for the area, even given the protests that would ensue. If we can manage to hang onto the stadium in some form, by what ever means you can see the possibility of coming out of this mess several years down the line. If we lose that stadium then the prospect of being a poor mans Brighton or Aldershot really does come to the fore.

 

Many fans will say this is rediculous and you only have to look at recent history and the experience of other clubs to see this as being alarmist. Normally I would agree with that view, but factor in the current economic climate and the fact the UK looks like being hit far harder than other nations and it is no longer out of the realms of possibility. We are just in the wrong place at the wrong time for our current predicament and the penalty could be far greater than imagineable to anyone.

[bridge too far]

But only if their bid represents the best realisation of the assets of the company by the administrator. Another bidder/consortium could put a better offer on the table and the administrator would be duty bound to accept it.

 

 

Is the information about the bids shared so that an auction can take place?

 

Or are they sealed bids?

[Clapham Saint]

As a banking lawyer and someone who has previously worked for insolvency practitioners, including running companies in administration, there is no such thing as voluntary administration which is different from any other type of administration.

 

Administrators generally are appointed by the court, by a creditor holding a type of security called a "qualifying floating charge" (most banks/funders would ensure they had this from their customers) or by the directors if they believe the company is insolvent (the penalty of not doing so is being done for "wrongful trading" i.e. incurring further debts knowing you have no chance of paying off the creditors (i.e. those who are owed money)).

 

However you go into administration, the administrator has a duty to act in the best interests of all creditors (i.e. not in the best interests of shareholders, fans, directors, league positions etc) and to try, if possible, to ensure the company/business continues as a going concern (so we don't end up in liquidation, which is the end).

 

Ken Tone above is right. Being in administration is not nice, would result in any saleable assets being sold (unless someone comes in and buys the lot to keep the club going), redundancies and people who have even less connection with our club than anyone in the boardroom in the last 5 years running the club and making the decisions.

 

It is the second worst of all options (the worst being liquidation).

 

Having been there and seen it (admittedly not with a football club), admin should be avoided at all costs, even if the costs are Lowe, Jan, Wilde, the academy in the first team, surman going, Lallana going, relegation etc etc etc. If we go into admin, you can kiss goodbye to premiership hopes for a long, long, long time (unless a paul allen type comes in and wants to chuck away his fortune).

 

A bit of a brief and potted explanation, clearly it is not as straightforward as set out above, but it's 7pm, I'm still at work with a massive document to get into typing (so not going home any time soon), but just wanted to quickly add my two penneth.

 

As an chartered accountant working with in the business recovery (as we prefer to call it) team in a mid tier practice. This is spot on.

 

Unless we have an investor come in very (VERY) sharpish after we go into administration it will be BIG problem.

[aintforever]

I have it on good authority that if we do go into administration then Lowe and a few of his friends will buy Southampton FC, lock, stock and barrel.

 

How does it work then if we go into admin and two groups want to buy the club?

 

Is it that the shares are worth zero and the administrator has to accept the best deal for the creditors?

[bridge too far]

How does it work then if we go into admin and two groups want to buy the club?

 

Is it that the shares are worth zero and the administrator has to accept the best deal for the creditors?

 

Yeah I asked this but no-one seems to know:

 

Is the information about the bids shared so that an auction can take place?

 

Or are they sealed bids?

[Frank's cousin]

Thanks Rich for the clarification. think its important that folf undersatnd teh REAL implications of this.

 

I do have some questions though that you might be able to help with.

 

My understanding is that the baord are currently doing what they believe will stave of relegation, they have tried to cut operating costs and overhead to a level that is within the current revenue stream.... if this is not teh acse and we are still incurring further monthly losses (and lower gate receipts DO impact on this) then it cant belong before they are legally forced to call in teh administrators as we woudl eb in effect be trading whilst insolvement.

 

So in come the administrators - we have been told that teh club is at least making provision for VAT and PAYE Corporation tax etc (from teh last audited accounts statemnet to teh LSE) so in theory they would be paid up in full. Assetts such as players would be sold + Jacksopns farm etc to then being to clear the overdraft with Barclays and other creditors... q. Do we actually have huge unpaid bills? As far as I can tell from the previous accounts out two greatest liabilties are the stadium loan with Aviva and teh overdraft with Barclays, an overdraft we have because we DO pay our employees and our suppliers? So selling assests to clear teh overdraft is one thing, but what happens to the AVIVA laon? the land as it is not worth the value of the loan so there its not a case of selling teh stadioum and leasing it back from someone else, that usually only happens where there are no loans against the ground. So Aviva really want us to be able to continue to pay the loan off - they do not want a useless stadium or sell the land for 25p in the pound of the laon - if that.For them it would thus be in their best interests that we continue to trade paying the 1.7 mil or so a year in repayments whatever division we are in?

 

I think its obvious that we have not cashed in assets such as Jacksons farm because of a) current land prices/property crunch and b) Its worth one heck of a lot more is rezoned for housing - long term asset managemnet of the wilde kind....

 

How do you think administrators would deal with the stadium situation? If we had already paid it off, then it would be sold for 4mil worth of land to help pay creditors and in that case not a bad thing if someone could be found who leased it abck to us for 30 years or so, but a knightmare if someone who simply wanted to stick a giant tescos on it.... thoughts?