Administration or Liquidation (9 Viewers)

Sky Blue Pete said:

I thought it was Arvo ltd that was registered in Cayman Islands with the assets? More hopeful than I have been for a long time after conversation yesterday with a friend from CCC. Won't be easy but sisu know they are backed in a corner and while I personally think they have been no better or worse in their financial support of our club, I think sisu know they have no chance of dealing with acl or CCC for more of the Ricoh. The hope comes from the thought that other companies/investors will be interested for the same reasons sisu were/are and CCC/acl will deal with them as they will trust them

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However sisu can quite easily device to liquidate the club unless they can negotiate a settlement figure to leave.

It is highly unlikely any such settlement will be reached

Rather than appoint an administrator at cost to the hedge fund a conceivable option is that they will liquidate the business.

Football league rules then come into play with liquidated companies.

The suggestion that the council are allowed to play god and decide who are fit and proper owners of a football club is outrageous.

SISU would not be able to simply liquidate the club if there was any hope of a prospective buyer. Bad luck, Gruffy!

What happened with Cov Rugby that time? I remember the owner announced the club would be liquidated, then a court ruled that was illegal. Can anyone remember why it was deemed illegal?

Nonleagueherewecome said:

SISU would not be able to simply liquidate the club if there was any hope of a prospective buyer. Bad luck, Gruffy!

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Are you saying that company rules neccestate administration before insolvency?

Grendel said:

Are you saying that company rules neccestate administration before insolvency?

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No, I'm say that as a football club the F.A. and The Football League have an interest in us continuing, and as such if there is a prospective buyer SISU lack the authority to liquidate us.

Nonleagueherewecome said:

No, I'm say that as a football club the F.A. and The Football League have an interest in us continuing, and as such if there is a prospective buyer SISU lack the authority to liquidate us.

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So your saying that the football league can override company insolvency law?

Grendel said:

Are you saying that company rules neccestate administration before insolvency?

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Not my area of expertise, but I think that SISU could only choose to liquidate "on their terms", if they settle all third party debts - which would seem unlikely.

If there are unpaid creditors then, as I recall, they get a say in the process - but I'd have to read too many dull books to be sure who has what control.

Grendel said:

So your saying that the football league can override company insolvency law?

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They seemed to have overuled taxation laws on plenty of occasions. Football creditors being placed ahead of HMRC is in contradiction of the law I believe.

Grendel said:

So your saying that the football league can override company insolvency law?

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Yes, status as a football club-a part of the community, not just some private company's plaything to do with as they wish-overrides company law. If we were a lost cause with no prospect of a new owner, then we could be liquidated. No guarantee that would be the case, much as you wish it. This shouldn't be news to you, this has been debated in the past!

coundonskyblue said:

They seemed to have overuled taxation laws on plenty of occasions. Football creditors being placed ahead of HMRC is in contradiction of the law I believe.

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Hmrc no longer a preferential creditor

Sky Blue Pete said:

Hmrc no longer a preferential creditor

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Was it the case in the past?

I seem to remember HMRC getting annoyed about the football creditors rule and taking someone to court.

Grendel said:

However sisu can quite easily device to liquidate the club unless they can negotiate a settlement figure to leave.

It is highly unlikely any such settlement will be reached

Rather than appoint an administrator at cost to the hedge fund a conceivable option is that they will liquidate the business.

Football league rules then come into play with liquidated companies.

The suggestion that the council are allowed to play god and decide who are fit and proper owners of a football club is outrageous.

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I think so too in relation to CCC. Which is why if the situation is as I suspect that sisu will have to leave it would be liquidation and a 2 division drop rather than admin where a new set of people come in and negotiate with acl/CCC and potentially stay in this division. When pushed on the issue my friend didn't think liquidation would happen and didn't seem to understand the difference. I assumed I didn't know enough but think I do really. If there is no deal I see no alternative but liquidation which would be awful but probably no different than 5-6 more years of gradual decline

coundonskyblue said:

Was it the case in the past?

I seem to remember HMRC getting annoyed about the football creditors rule and taking someone to court.

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It was in the past. Hmrc had the same status as football creditors. Now in law all creditors have the same rights but in practice clubs pay all football debts to avoid punitive punishments on the scale of Luton town

ashbyjan said:

Also under Football Creditor rules football creditors would have to be paid first so if there are any ex-managers or transfer fees outstanding these would come first.

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Those rules have been challenged in court by HMRC, other more deserving bodies including St Johns Ambulance have got screwed several times by it too & reasonably enough they are unhappy with the rule, HMRC lost their case in the high court last year & it is unclear whether an appeal will be made.

http://www.guardian.co.uk/football/2012/may/25/football-league-creditors-rule

Grendel said:

So your saying that the football league can override company insolvency law?

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It looks like it as things stand..

Forgive me, but can I go back to something that Jan said in the original post......all player registrations revert to the FL. Does that mean that they have absolutely NO asset value to CCFC?

A couple of things. An administrator would not be paid by sisu, they would get paid out of the asset realisations (as would a liquidator). I suppose sisu may indirectly pay for this as it would come out before any distribution to the creditors inc them, however I still think admin would achieve better realisations for all creditors inc sisu.

Either would have to act in the best interests of all creditors by achieving the maximum realisations available ie if a third party made a better offer than sisu (if sisu wanted to buy the club back), they would have to accept.

The comments about if there's no Buyer the club would go into liquidation are correct. How the market is explored is a question though, has this process been started already ???

Keep the faith, the play offs will change everything

Neither admin or liquidation is likely. Here is why:

Admin would need SISU to agree to it - they won't because the vast majority of the debt - let's call it £40m for the sake of argument, is with their own shareholders. Because administration is a process of effectively writing off your debts, admin for Coventry City would basically mean SISU wiping out its' own shareholders investment in CCFC. Won't happen, as SISU are a hedge fund whose whole purpose is to protect the investment of its shareholders.

Liquidation would need SISU to do it, and would wipe out all the debt owed to SISU's shareholders. This would be a terrible deal for SISU to have to get their shareholders to agree - the shareholders are far more likely to ask for the club to be sold to a new owner, even for a nominal £1, as long as some of the debt was carried over to the new owners, even at a low-ish rate like 30p in the pound. SISU also of course has its' corporate reputation to think of, and the enormous damage it would do to its credibility if they oversaw the demise of the biggest English club ever to go bust. Hardly a glowing recommendation of an investment management company.

So to sum up, we will be sold, not wound up or placed into admin.

I know next to nothing about the law governing the administration or liquidation of companies,
But if a creditor goes to the courts and asks a judge to appoint an administrator and the judge agrees. The appointed administrator walk into the company
the next day and tells the companies directors to piss off and takes control.
His job is to get the best deal for the creditors and either sell on to another company or liquidate all/part of the company.

So if the shysters that are sisu wanted to liquidate the company they would have to go to the courts for permission but if a creditor objected the likely outcome is the the judge would appoint an administrator.
As far as i know the only creditor owed money is ACL owned by the council and the higgs charity who after going through the courts have had ccfc's bank accounts frozen and have said negotiations on the rent have broken down.
But have stopped short of putting the club into administration because whoever does that looses the support of the fans'
for sisu, lower sales from people like me who will not renew S/T's
for the council, the loss of votes and voters, (i have never seen or met my local councilor or MP since 1982) but i will seek them out before the next election and ask if they support CCFC as a community asset.
ACL, A fantastic football venue with no football team, no chance of another pro sports team paying sky high rents for piss poor return, a long lease with 85% of the venue unused for 360 days a year

There are some people on this forum that seem to know the in's and out's of this and there are some that like me just see it as some people with lots of money are trying for f*cking take more and more never lose a penny
as the small print says investments will go down unless you got loads of money.



edited to add:- i've had a few beers

Nonleagueherewecome said:

No, I'm say that as a football club the F.A. and The Football League have an interest in us continuing, and as such if there is a prospective buyer SISU lack the authority to liquidate us.

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The ONLY interest the FA and FL have is £££, they wouldnt bat an eyelid if anyone outside their precious Premierleague, went tits up.