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Court Case Thread! June 2018 (1 Viewer)

  • Thread starter wince
  • Start date Jun 23, 2018
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fernandopartridge

Well-Known Member
  • Jun 26, 2018
  • #71
skybluetony176 said:
Sisu didn’t argue that the Ricoh was worthless and no commercial lender would have lent to them because of that then?
Click to expand...

You're comparing apples with pears. SISU's argument was that ACL on a 40 odd year lease was worthless and would have struggled to raise the finance on the open market. It's a different proposition to ACL with Wasps and a 250 year lease.
 

Astute

Well-Known Member
  • Jun 26, 2018
  • #72
skybluetony176 said:
Oh dear. Sounds like the judge is telling SISU that they’re pissing in the wind. Sounds like the mediation suggestion in the last round was trying to do SISU a favour, or the club at least.
Click to expand...
But we knew that the value was taken from when the arena was empty and unused. And a big loan was also outstanding that had to be serviced.
 
T

thekidfromstrettoncamp

Well-Known Member
  • Jun 26, 2018
  • #73
What no Tim Fisher in attendance ?
 

Astute

Well-Known Member
  • Jun 26, 2018
  • #74
fernandopartridge said:
You're comparing apples with pears. SISU's argument was that ACL on a 40 odd year lease was worthless and would have struggled to raise the finance on the open market. It's a different proposition to ACL with Wasps and a 250 year lease.
Click to expand...
But the lease couldn't be extended until it was taken over by someone. If SISU had taken the lease on they would have had the same rights as Wasps. How could SISU ever negotiate extending the lease when they were not willing to pay or take on the loan that was outstanding?
 

Nick

Administrator
  • Jun 26, 2018
  • #75
Astute said:
But the lease couldn't be extended until it was taken over by someone. If SISU had taken the lease on they would have had the same rights as Wasps. How could SISU ever negotiate extending the lease when they were not willing to pay or take on the loan that was outstanding?
Click to expand...

Wasn't the lease extension done before the takeover was completed?
 

Astute

Well-Known Member
  • Jun 26, 2018
  • #76
Nick said:
Wasn't the lease extension done before the takeover was completed?
Click to expand...
No. Sure it was straight after but arranged before they took over. It all moved too quickly.

But that is where negotiating gets you.
 

fernandopartridge

Well-Known Member
  • Jun 26, 2018
  • #77
Astute said:
But the lease couldn't be extended until it was taken over by someone. If SISU had taken the lease on they would have had the same rights as Wasps. How could SISU ever negotiate extending the lease when they were not willing to pay or take on the loan that was outstanding?
Click to expand...

I don't think they're saying otherwise are they? They are saying that the whole deal was contingent on the lease extension, the council arguing otherwise is disingenuous in the extreme though on the face of it what they have done isn't illegal.
 

skybluetony176

Well-Known Member
  • Jun 26, 2018
  • #78
fernandopartridge said:
You're comparing apples with pears. SISU's argument was that ACL on a 40 odd year lease was worthless and would have struggled to raise the finance on the open market. It's a different proposition to ACL with Wasps and a 250 year lease.
Click to expand...

Not really. The judge disagreed with them. SISU’s argument also didn’t consider the fact that ACL was the only entity that had the legal right to extend the lease, which is where the value is. JR2 seems to acknowledge that as they’re arguing that by ACL doing what it was always entitled to do Wasps underpaid for ACL. ACL’s situation never changed from day one. JR1 dismisses the right to extend the lease as a value, in fact I don’t even recall it being mentioned in JR1. JR2 is based on it. So SISU have changed position, completely.
 
Last edited: Jun 26, 2018
Reactions: Astute

Nick

Administrator
  • Jun 26, 2018
  • #79
Astute said:
No. Sure it was straight after but arranged before they took over. It all moved too quickly.

But that is where negotiating gets you.
Click to expand...

So that begs the question if it was arranged before they took over, why didn't they charge for it with a 250 year lease. The other question is why didn't they give a 250 year lease years ago which meant ACL wouldn't struggle so much and therefore CCFC wouldn't be paying millions in rent as ACL wouldn't be as reliant.
 
Reactions: SkyBlueZack

fernandopartridge

Well-Known Member
  • Jun 26, 2018
  • #80
Astute said:
No. Sure it was straight after but arranged before they took over. It all moved too quickly.

But that is where negotiating gets you.
Click to expand...

Helps when you've been negotiating or courting Derek Richardson for a number of years, even when you were in faux negotiations with CCFC in 2012
 

Captain Dart

Well-Known Member
  • Jun 26, 2018
  • #81
fernandopartridge said:
You're comparing apples with pears. SISU's argument was that ACL on a 40 odd year lease was worthless and would have struggled to raise the finance on the open market. It's a different proposition to ACL with Wasps and a 250 year lease.
Click to expand...

I think the SISU argument hinges on whether the lease extension is included in the valuation on sale of the Arena.
But I'm pretty sure the extension was done later. I suppose then it boils down to whether it was already agreed in principle at the time of sale.
 

skybluetony176

Well-Known Member
  • Jun 26, 2018
  • #82
Nick said:
Wasn't the lease extension done before the takeover was completed?
Click to expand...

Couldn’t have been. Wasps didn’t own ACL before the takeover so therefore didn’t have any legal rights to extend it. They had to purchase ACL first to do it.
 

chiefdave

Well-Known Member
  • Jun 26, 2018
  • #83
Shouldn't the first thing to be dealt with have been what happened with the mediation that was ordered?
Astute said:
But the lease couldn't be extended until it was taken over by someone.
Click to expand...
Why couldn't it be extended when ACL was owned by Higgs and CCC?
Nick said:
Wasn't the lease extension done before the takeover was completed?
Click to expand...
Both were agreed at the same council meeting which is why the judge who sent this to full trial said it had to be considered as one transaction. Something this judge seems to have ignored.

Only a few minutes in and we've already got the grounds for SISU's next appeal.
 

Nick

Administrator
  • Jun 26, 2018
  • #84
skybluetony176 said:
Couldn’t have been. Wasps didn’t own ACL before the takeover so therefore didn’t have any legal rights to extend it. They had to purchase ACL first to do it.
Click to expand...

It was done at the same time wasn't it? It wasn't as if they sold it to Wasps and then a few months later it was extended.

So it begs the question why didn't ACL do it and then get more from Wasps for the Tax Payer?
 

Astute

Well-Known Member
  • Jun 26, 2018
  • #85
fernandopartridge said:
I don't think they're saying otherwise are they? They are saying that the whole deal was contingent on the lease extension, the council arguing otherwise is disingenuous in the extreme though on the face of it what they have done isn't illegal.
Click to expand...
Which is how CCC have been in court before. Keep it to what the case is about and not change it as they go along. IIRC they have to keep to what it is about in a JR.
 

Astute

Well-Known Member
  • Jun 26, 2018
  • #86
Nick said:
So that begs the question if it was arranged before they took over, why didn't they charge for it with a 250 year lease. The other question is why didn't they give a 250 year lease years ago which meant ACL wouldn't struggle so much and therefore CCFC wouldn't be paying millions in rent as ACL wouldn't be as reliant.
Click to expand...
Because by law you can't extend a lease that isn't yours. And the freeholder can only charge a certain % of the value to extend a lease.

Yes we should have had a lot longer lease from the start. But as the rent was the amount to cover the outstanding loan the rent payable would have been about the same.
 

Nick

Administrator
  • Jun 26, 2018
  • #87
"Material impact on competition"
Mr Thompson says the new 250 year lease was granted by the council without prior market valuation of the stadium. He says the effect of the transaction had a material impact on the rest of the competition.

He said the stadium was independently judged to be worth between £46.9m and £48.5m.
Click to expand...
 

Nick

Administrator
  • Jun 26, 2018
  • #88
Astute said:
Because by law you can't extend a lease that isn't yours. And the freeholder can only charge a certain % of the value to extend a lease.

Yes we should have had a lot longer lease from the start. But as the rent was the amount to cover the outstanding loan the rent payable would have been about the same.
Click to expand...

The lease was ACLs though?
 

Astute

Well-Known Member
  • Jun 26, 2018
  • #89
chiefdave said:
Shouldn't the first thing to be dealt with have been what happened with the mediation that was ordered?

Why couldn't it be extended when ACL was owned by Higgs and CCC?

Both were agreed at the same council meeting which is why the judge who sent this to full trial said it had to be considered as one transaction. Something this judge seems to have ignored.

Only a few minutes in and we've already got the grounds for SISU's next appeal.
Click to expand...
Why would Higgs put more money into something they wanted their money back from when nobody at the time wanted it?
 

Nick

Administrator
  • Jun 26, 2018
  • #90
 

Astute

Well-Known Member
  • Jun 26, 2018
  • #91
But that was a valuation after the event. When two clubs were playing there and not unused.
 

Nick

Administrator
  • Jun 26, 2018
  • #92
Astute said:
Why would Higgs put more money into something they wanted their money back from when nobody at the time wanted it?
Click to expand...

Didn't the lease get extended / approved while Higgs still owned it though?
 

Astute

Well-Known Member
  • Jun 26, 2018
  • #93
Nick said:
Didn't the lease get extended / approved while Higgs still owned it though?
Click to expand...
When taken over by Wasps.
 

Astute

Well-Known Member
  • Jun 26, 2018
  • #94
Nick said:
The lease was ACLs though?
Click to expand...
And ACL was owned by who?
 

skybluetony176

Well-Known Member
  • Jun 26, 2018
  • #95
Astute said:
Because by law you can't extend a lease that isn't yours. And the freeholder can only charge a certain % of the value to extend a lease.

Yes we should have had a lot longer lease from the start. But as the rent was the amount to cover the outstanding loan the rent payable would have been about the same.
Click to expand...

I did it on the first place I bought. A flat with 80 years lease on it. Extended it by 90 years and cost me £2.5K plus expenses, I had to pay the landlords expenses to IIRC although it was about 20years and 3 properties ago so don’t remember exactly on the expenses. Anyway it didn’t add much value to the property if any at all, just made it easier to sell as it became easier to mortgage. Did this as soon as I moved in pretty much, couldn’t do it before as I didn’t own the lease and the previous owner was under no obligation to extend before selling.
 

Nick

Administrator
  • Jun 26, 2018
  • #96
Astute said:
When taken over by Wasps.
Click to expand...

It was done in the same council meeting wasn't it, before Higgs had even accepted a bid?
 

Colin Steins Smile

Well-Known Member
  • Jun 26, 2018
  • #97
From my understanding of the law is valuations are made at the exact time of sale. The fact the lease was extended, even 1 minute after the sale is immaterial.....assuming that had a positive impact on valuation of an asset. What is written in the contract of sale is the key element, if the extension of the lease is not in there, then it cannot be considered.
 
Reactions: Astute

Nick

Administrator
  • Jun 26, 2018
  • #98
Nick said:
Click to expand...

At this one, the judge is saying they didn't have a 250 year lease.

Isn't that incorrect? It isn't as if a few months down the line the council extended the lease, it was discussed / put through at the same time as whether to accept an offer for the Council share so it was known full well about the 250 year lease.
 

Astute

Well-Known Member
  • Jun 26, 2018
  • #99
Nick said:
It was done in the same council meeting wasn't it, before Higgs had even accepted a bid?
Click to expand...
As I said arranged but not finalised until afterwards.
 

Nick

Administrator
  • Jun 26, 2018
  • #100
Colin Steins Smile said:
From my understanding of the law is valuations are made at the exact time of sale. The fact the lease was extended, even 1 minute after the sale is immaterial.....assuming that had a positive impact on valuation of an asset. What is written in the contract of sale is the key element, if the extension of the lease is not in there, then it cannot be considered.
Click to expand...

Isn't that the thing that the lease was agreed to be extended before the sale?

I can understand if they called a council meeting 5 minutes after the wasps takeover went through but it wasn't like that.

Surely it's no different to them agreeing off the record to build 1,000 houses on Coombe abbey with a buyer before they had agreed the sale and then just charging them for the land?
 

Nick

Administrator
  • Jun 26, 2018
  • #101
Astute said:
As I said arranged but not finalised until afterwards.
Click to expand...

So why didn't they finalise it just before and charge Wasps millions more?

Is that not the argument that's being made?

Difference
Mr Thompson wants all elements of the sale considered together.

He said: “It was a single transaction and was envisaged as such, it just happened to take three months for some reason.”

But Justice McCombe says the council did not have a 250 year lease to sell at the time and that is why the valuations before and after the lease extension could not be compared.
Click to expand...
 

Astute

Well-Known Member
  • Jun 26, 2018
  • #102
Nick said:
At this one, the judge is saying they didn't have a 250 year lease.

Isn't that incorrect? It isn't as if a few months down the line the council extended the lease, it was discussed / put through at the same time as whether to accept an offer for the Council share so it was known full well about the 250 year lease.
Click to expand...
But there still wasn't a 250 year lease until after the sale. So the sale was on the original lease. And the extension was on the original price. The price SISU said that was too high.
 

Captain Dart

Well-Known Member
  • Jun 26, 2018
  • #103
Colin Steins Smile said:
From my understanding of the law is valuations are made at the exact time of sale. The fact the lease was extended, even 1 minute after the sale is immaterial.....assuming that had a positive impact on valuation of an asset. What is written in the contract of sale is the key element, if the extension of the lease is not in there, then it cannot be considered.
Click to expand...

Sounds right. After all if SISU had purchased at that time the option of extending the lease would have become open to them.
 
Reactions: Astute

Astute

Well-Known Member
  • Jun 26, 2018
  • #104
Nick said:
So why didn't they finalise it just before and charge Wasps millions more?

Is that not the argument that's being made?
Click to expand...
That is the argument that SISU are trying to put over. But has no legal standing. The judge has certainly confirmed this.
 

chiefdave

Well-Known Member
  • Jun 26, 2018
  • #105
Astute said:
Why would Higgs put more money into something they wanted their money back from when nobody at the time wanted it?
Click to expand...
Why would Higgs have put any more money in? It would have been ACL buying the lease extension not Higgs.
 
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