£60m debt. Sisu doubters proved correct

[jas365]

I still don't understand why the debt (or some of it) isn't written off with the club now being in admin, in the same way that the debt to ACL has now been written off? They are both creditors on the balance sheet so what's the difference?

Can anyone explain this?

 

[dadgad]

It's just a scam to avoid actually meeting your obligation. It'll be transferred back to the club when it suits

 

[SkyBlueBlood]

According to BBC CWR reporter from the court there was a claimed £60 million debt, but they only detailed £8.4m to AVRO and £1.4m to ACL.

What is the rest to make up £60m. Are they including the deferred £30m owed to Sir Geoffrey Robinson because if so I would like him to get involved as he would then have a majority vote on any proposed bid for the club which would mean SISU would not have any power in deciding the clubs future!

 

[jas365]

According to BBC CWR reporter from the court there was a claimed £60 million debt, but they only detailed £8.4m to AVRO and £1.4m to ACL.

What is the rest to make up £60m. Are they including the deferred £30m owed to Sir Geoffrey Robinson because if so I would like him to get involved as he would then have a majority vote on any proposed bid for the club which would mean SISU would not have any power in deciding the clubs future!

So to repeat what I said above, how can the £1.4m to ACL be written off, but not the £8.4m to ARVO?

 

[WillieStanley]

Isn't that that planet that Luke Skywalker came from?

Tatooine

Palpatine

 

[Spencer]

I still don't understand why the debt (or some of it) isn't written off with the club now being in admin, in the same way that the debt to ACL has now been written off? They are both creditors on the balance sheet so what's the difference?

Can anyone explain this?

There are differences in priority of debt, with those like HM customs and excise normally having a first charge meaning they get paid out before others (the administrator also falls into this category).

ACL would be an unsecured creditor meaning they are last in line. I'm not sure what SISU (or their companies) would be.

 

[stupot07]

There are differences in priority of debt, with those like HM customs and excise normally having a first charge meaning they get paid out before others (the administrator also falls into this category).

ACL would be an unsecured creditor meaning they are last in line. I'm not sure what SISU (or their companies) would be.

Not sure if they have changed the rules, but it was football creditors first priority.

 

[Jack Griffin]

Its still football creditors, an HMRC challenge failed & they don't seem to be trying to appeal that.

 

[Spencer]

Not sure if they have changed the rules, but it was football creditors first priority.

Yes, you're correct - I was just trying to explain based upon experience from "normal" business as to how one creditor can be more important than another (I was well down the pecking order as an employee).

 

[lordsummerisle]

Oh dear! Obviously we cannot change what has happened but if we could agree what mistakes were made (some hope, I know) it might help us not to repeat them in the future.
I would have thought we could all agree on this?

I totally agree, but why are so many not learning from the mistakes of the past by cheerleading a bid associated with Elliott?

A totally clean break from any of the past would be better for everybody.

 

[chiefdave]

Its pretty certain they retain Ryton & everything they took up there. A facility that the club can't really manage without easily. I wonder what rent AVRO charge the club for it, £1.3M pa?

AVRO don't own Ryton do they, think they have a charge over it which is a form of security. I think the upshot of this is whoever buys the club out of admin has to pay an amount to AVRO to remove the charge however that doesn't mean they get the full amount owed. I believe the administrator can apply to the courts to essentially force AVRO to take a lower amount.

I still don't understand why the debt (or some of it) isn't written off with the club now being in admin, in the same way that the debt to ACL has now been written off? They are both creditors on the balance sheet so what's the difference?

None of it's written off until we come out of admin. There's then different levels of creditors and AVRO would be high up on the list as they are secured. I think it's more the fact that ACL have already accepted the fact that they won't get more than a few pence in the pound at best. Unsecured creditors have to vote on a CVA, if SISU are the biggest unsecured creditor they can vote against the CVA and we'll get another points deduction when we come out of admin.

 

[AFCCOVENTRY]

If a company is £60m in debt a buyer doesn't buy it for £60m.

You buy bad debt cheaper than the debt level.

It all depends what this debt level is made up of and i reckon that is one of the things ACLs lawyer asked when the administrator reports back in 6 weeks. The accounts will be scutinised.

 

[stupot07]

If a company is £60m in debt a buyer doesn't buy it for £60m.

You buy bad debt cheaper than the debt level.

It all depends what this debt level is made up of and i reckon that is one of the things ACLs lawyer asked when the administrator reports back in 6 weeks. The accounts will be scutinised.

How cheap do you think they could buy the debt for?

 

[AFCCOVENTRY]

How cheap do you think they could buy the debt for?

Probably as cheap as SISU bought them off the last regime!

You don't pay £60m for a £60m debt. You take on the debt.

What we need to know is if that £60m debt includes £30-40m of debt that was converted into equity by ARVO. So now they are share holders in that equity and take a % out of the club every month as payment on their dues.

If this is the case they are not due £30-40m back.

 

[stupot07]

Probably as cheap as SISU bought them off the last regime!

You don't pay £60m for a £60m debt. You take on the debt.

What we need to know is if that £60m debt includes £30-40m of debt that was converted into equity by ARVO. So now they are share holders in that equity and take a % out of the club every month as payment on their dues.

If this is the case they are not due £30-40m back.

Problem is if a new owner takes on £20-30m debt, we'll be exactly where we were when sisu took over, especially if your paying it off monthly.

Add that to the football side that are already losing £3m per year, plus £44m for ACL who only made £1m (whilst we paid rent - I know new mortgage different costs), then it looks to me that any owner would still be covering big losses, plus fans will expect investment in the playing squad, plus redeveloping adjacent land as per councils condition of sale of ACL. When you consider all this, it makes you wonder whether this Americans £157m is enough to turn this club around.

 

[chiefdave]

Problem is if a new owner takes on £20-30m debt, we'll be exactly where we were when sisu took over, especially if your paying it off monthly.

Add that to the football side that are already losing £3m per year, plus £44m for ACL who only made £1m (whilst we paid rent - I know new mortgage different costs), then it looks to me that any owner would still be covering big losses, plus fans will expect investment in the playing squad, plus redeveloping adjacent land as per councils condition of sale of ACL. When you consider all this, it makes you wonder whether this Americans £157m is enough to turn this club around.

Didn't a club come out of admin paying something stupid like 0.2p in the £, that's the sort of thing we'll need to stand a chance of not ending back in the same mess. Does the administrator go back through the accounts and strip out any crap so if SISU have been up to something dodgy and paying themselves will he tell them where to go?

 

[CJparker]

Problem is if a new owner takes on £20-30m debt, we'll be exactly where we were when sisu took over, especially if your paying it off monthly.

Add that to the football side that are already losing £3m per year, plus £44m for ACL who only made £1m (whilst we paid rent - I know new mortgage different costs), then it looks to me that any owner would still be covering big losses, plus fans will expect investment in the playing squad, plus redeveloping adjacent land as per councils condition of sale of ACL. When you consider all this, it makes you wonder whether this Americans £157m is enough to turn this club around.

I have thought this many times - this indeed the main problem. SISU need an incentive to walk away, and, meanwhile, we are asking £100m for someone to buy a league 1 club which might be Premier League in 3 years. Maybe.

Hence the only solution is to force SISU out and then let someone else take on the club on the cheap...

 

[warwickcccfc]

As was said by some on the CET forum and vehemently denied by some.....

Anything to say, Torchy??!

 

[Sky Blue Pete]

I have thought this many times - this indeed the main problem. SISU need an incentive to walk away, and, meanwhile, we are asking £100m for someone to buy a league 1 club which might be Premier League in 3 years. Maybe.

Hence the only solution is to force SISU out and then let someone else take on the club on the cheap...

Can't argue with that logic

 

[warwickcccfc]

It matters a great deal. We the fans have every right to define the sort of club we want, one in which we can justifiably proud. If those that stood up for those beliefs while others abdicated theirs so be it but at least, in the future, what has happened can help us get the sort of club which can unite its fan base, not divide it.

100% Bang on....

 

[stupot07]

I have thought this many times - this indeed the main problem. SISU need an incentive to walk away, and, meanwhile, we are asking £100m for someone to buy a league 1 club which might be Premier League in 3 years. Maybe.

Hence the only solution is to force SISU out and then let someone else take on the club on the cheap...

Yep, but even getting to the PL in 3 they wouldn't get their money back.

We need a clean slate, we need to slash costs to break even point and hope we get te right manager and players together to fluke a couple of promotions otherwise we'll just go full circle.

 

[skyblue025]

Didn't a club come out of admin paying something stupid like 0.2p in the £, that's the sort of thing we'll need to stand a chance of not ending back in the same mess. Does the administrator go back through the accounts and strip out any crap so if SISU have been up to something dodgy and paying themselves will he tell them where to go?

Ken Bates bought Leeds out of admin for 8p in the pound. If someone could sort the same deal it would cost them £480k + fees. Bargain!!!

 

[dongonzalos]

The majority of the debt is owed to SISU.
If they get one offer the yank.
Will they be forced to accept it ?

 

[swanageskyblue]

Ken Bates bought Leeds out of admin for 8p in the pound. If someone could sort the same deal it would cost them £480k + fees. Bargain!!!

Don't you mean 4.8 million + fees???

 

[stupot07]

The majority of the debt is owed to SISU.
If they get one offer the yank.
Will they be forced to accept it ?

Not necessarily.

 

[SkyBlueBlood]

Probably as cheap as SISU bought them off the last regime!

You don't pay £60m for a £60m debt. You take on the debt.

What we need to know is if that £60m debt includes £30-40m of debt that was converted into equity by ARVO. So now they are share holders in that equity and take a % out of the club every month as payment on their dues.

If this is the case they are not due £30-40m back.

You dont have to buy the debt if you buy the club after it has gone into administration you would start with a clean slate. What you do have to do is present an offer to the administrator that represents the highest possible amount to reduce the creditors debt write off.

 

[SkyBlueBlood]

The majority of the debt is owed to SISU.
If they get one offer the yank.
Will they be forced to accept it ?

Why is everyone quoting that SISU / AVRO are the biggest creditor when a total debt of £60m is being mentioned but so far only 2 debts declared ACL £1.4m and AVRO £8.4m. Who has the £50m as we are told that HMRC are fully paid up to date. I can only imagine this includes all the debt they had deferred till we reach the Prem when they bought the club, so Sir G Robinson and others. If that is the case and the buyer can do the same deferment deal surely the only debt that needs sorting now is £10m and SISU are not the biggest creditor so could be out voted at the creditors meeting!

 

[Nonleagueherewecome]

Yeah but ARVO are SISU so they will do what they're told!

 

[Deleted member 3640]

We want sisu out chants coming back?

 

[davebart]

In answer to the OP it was always fairly obvious that the previous debt didn't just disappear when SISU took over. It was just shifted around and redefined.

If you think about it if Robinson's 'loan' is £30m and becomes due only when we get in the premier league then that is a disincentive for SISU to get there.

I am convinced that SISU bought the club on the recommendation of Ray Ranson. I can just imagine his presentation concentrating on all the premiership billions to get your snout into. They had no idea what they were getting into.

As far as I can see the council have done more than they should to provide CCFC with a home. They have no duty to do so. It is a privately run enterprise.

To me the real villains - and in reality it is more about incompetemce - are the board members who actually brought the club to its knees before SISU took over. We were bankrupt then and still are.

SISU have merely delayed the inevitable for five years.

 

[oldskyblue58]

Take a look at this from the CCFCltd accounts - year end is 31/05

Creditors
2007 £31.2m
2008 £40.2m
2009 £50.1m
2010 £50.0m
2011 £57.2m

The takeover of CCFCl by SISU was in January 2008. In the group accounts we are told that to do the deal they wrote off £35m of the creditors. Well yes they did but they didnt write off those debts through the whole of the group. look at the difference between 2007 and 2008

CCFC Ltd owed CCFC H & others £27m (2007 accs) before the takeover. After the takeover 31/05/08 it owed group members £36m. At the 31/05/08 the SBS&L group owed SISU investors £11m. In the stand alone accounts of CCFC the creditors discounted on the purchase of the club were never written off.

The £60m is not just amounts put in by SISU there are a huge chunk of it that is paper losses because CCFC Ltd never received the benefit of the creditor write off in January 2008.

 

[Sub]

Take a look at this from the CCFCltd accounts - year end is 31/05

Creditors
2007 £31.2m
2008 £40.2m
2009 £50.1m
2010 £50.0m
2011 £57.2m

The takeover of CCFCl by SISU was in January 2008. In the group accounts we are told that to do the deal they wrote off £35m of the creditors. Well yes they did but they didnt write off those debts through the whole of the group. look at the difference between 2007 and 2008

CCFC Ltd owed CCFC H & others £27m (2007 accs) before the takeover. After the takeover 31/05/08 it owed group members £36m. At the 31/05/08 the SBS&L group owed SISU investors £11m. In the stand alone accounts of CCFC the creditors discounted on the purchase of the club were never written off.

The £60m is not just amounts put in by SISU there are a huge chunk of it that is paper losses because CCFC Ltd never received the benefit of the creditor write off in January 2008.

Sorry OSB can you put that in laymens terms please i understand nothing of this money talk

 

[oldskyblue58]

the £60m debt still includes the old debt that was there before SISU arrived.

The deal with creditors when SISU came in was to write off £35m of it. That never happened in the CCFC Ltd accounts. So SISU got the benefit of reducing creditors when they took over by £35m but have left the debt in CCFC Ltd

SISU having their cake twice

 

[Sub]

if thats the case then we are 25million in debt not 60 million ?

 

[kingharvest]

Are you saying they essentially bought the debt for nothing? SO instead of the creditors being owed the £35m, they were now owed it?