Debt write off (1 Viewer)

[pb2875]

Are sisu writing off £35m from CCFC Ltd or from the whole "group"?

If its just CCFC Ltd then the debt from Holdings to SBS&L remains and likewise to SiSU through SBS&L so they still don't lose out.

If write off from whole group then is that their money they are writing off or other people's?

 

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[Godiva]

Are sisu writing off £35m from CCFC Ltd or from the whole "group"?

If its just CCFC Ltd then the debt from Holdings to SBS&L remains and likewise to SiSU through SBS&L so they still don't lose out.

If write off from whole group then is that their money they are writing off or other people's?

No, they probably won't.
The debt is there to protect against a hostile takeover.

 

[Jack Griffin]

They are not writing it off anywhere but CCFC Ltd, and I believe that company will be liquidated to break the Arena Rental agreement.

 

[ccfcway]

the debt moves elsewhere within the SISU portfolio...

 

[georgehudson]

so, sisu manipulate the existing system to suit their purpose,
what a surprise,
i do hope the british judiciary are taking note,
i also hope, though perhaps in vain, the FA are taking a reasoned stance ?

 

[ccfcway]

so, sisu manipulate the existing system to suit their purpose,
what a surprise,
i do hope the british judiciary are taking note,
i also hope, though perhaps in vain, the FA are taking a reasoned stance ?

ha, good one...

 

[Godiva]

so, sisu manipulate the existing system to suit their purpose,
what a surprise,
i do hope the british judiciary are taking note,
i also hope, though perhaps in vain, the FA are taking a reasoned stance ?

Are you suggesting they are doing something illegal - if so, what exactly?

 

[Broken Hearted Sky Blue]

Are you suggesting they are doing something illegal - if so, what exactly?

Nothing illegal but I think it shows that perhaps the FL rules are not fit for purpose

 

[SkyBlueSwiss]

Are you suggesting they are doing something illegal - if so, what exactly?

I would most sincerely suggest that they have acted in a manner contrary to Football League rules at the very least.
I mentioned this in another post :

http://www.skybluestalk.co.uk/threa...U-now-liquidate-Ltd-to-avoid-the-rental-lease

I think you will find it hard to disagree with these facts if you are honest with yourself. What do you think the penalty might be if the Football League are aware of the full facts? Do you really think they will let SISU get away with manipulating the club structure and using the legal system to void a football debt, i.e. the rent of the arena they play in? And if the Football League are so weak and money-minded that they let SISU get away with this, what chances that the government will then step in as they have threatened to do if football does not lean up their act?

 

[Godiva]

I would most sincerely suggest that they have acted in a manner contrary to Football League rules at the very least.
I mentioned this in another post :

http://www.skybluestalk.co.uk/threa...U-now-liquidate-Ltd-to-avoid-the-rental-lease

I think you will find it hard to disagree with these facts if you are honest with yourself. What do you think the penalty might be if the Football League are aware of the full facts? Do you really think they will let SISU get away with manipulating the club structure and using the legal system to void a football debt, i.e. the rent of the arena they play in? And if the Football League are so weak and money-minded that they let SISU get away with this, what chances that the government will then step in as they have threatened to do if football does not lean up their act?

I think I will just quote one key sentence from the post you refer to:

I do not know enough about league rules or the laws of the land to properly judge where we are going with this, but I worry greatly as to the consequences that we fans are going to be forced to suffer.

 

[SkyBlueSwiss]

I think I will just quote one key sentence from the post you refer to:

Yes, I did indeed admit my lack of full knowledge. But are you really suggesting that in your opinion SISU did not do the things listed for the reasons listed, and are you really suggesting they have in no way contravened the regulations of the Football League? Are you genuinely of the opinion that SISU have done nothing that might result in our club being punished by the Football League?

 

[oldskyblue58]

Keep in mind this is a group situation that has one of its companies in administration

Old debts - a large chunk of the debt relates to monies SISU took on at a discount when they came in but they did not discount in the accounts of CCFC Ltd or CCFC H. There was a large intercompany debt owed to CCFC H by ccfc ltd when SISU took over and on take over that debt along with others not discounted were rolled in to the new intercompany debt owed to SBS&L. So in reality are nothing more than paper figures. Those old debts still exist in CCFC H as far as the info we have goes.

ARVO - the debt that is owed to them was the crystalisation of a security charge. IT does not mean ARVO ever put 10.25 (including at least 2m in interest charged) in to CCFC Ltd. So they are writing off that charge BUT there is a similar charge on CCFC H that still exists ......so their debt still exists

the CCFC H accounts for the 5 years to 31/05/11 had already made provisions against the amount that company was owed by CCFC Ltd. So whilst the debt still existed legally CCFC H already valued it at nil and had taken the loss in the 5 years of SISU ownership already

The bulk of the SISU money has been put in via SBS&l putting money in to CCFC H who then put the money in to CCFC Ltd. CCFC H will still owe SBS&L that money but will not be owed any thing by CCFCLtd.

Would guess the SBS&L debt is probably legals etc that have been allocated to CCFC Ltd to load it with debt as such the Group will still owe them. But I also believe there is a similar charge to the one by ARVO over the CCFC Ltd assets. So that debt may well be similar basis to ARVO as explained above. SBS&L obtain their funding from SISU so the debt will still exist

It is SBS&L that is head of the Group and still owes SISU investors the money they put in. The full SISU money is still owed by the Group

SBS&L owns Otium which owns CCFC H which owns CCFC Ltd

They have "written off" amounts in CCFC Ltd which if this were a single stand alone company would mean that SISU/ARVO have lost the money. BUT it is not a single company it is a group and the money is owed elsewhere by other members of the group.

Clever accounting but the "write downs" of loans/debts do not actually represent loss of physical asset that it might seem.

Bottom line is that whilst the "debt" is written off in CCFC Ltd all of it is still owed by other Group members to SISU - so SISU have in fact not written anything off

 

[Sky Blues]

OSB, from your look at the (available) accounts how much real cash do you estimate SISU have actually invested in Coventry City FC?

I think you or Squirrel may have mentioned this in the past but please forgive me as I forget where. Thanks.

 

[oldskyblue58]

It was stated in accoounts at around 32m in total invested in SBS&L at 31/05/11 including 2m from ARVO. From what I can see not all of that had gone into CCFC because some of it had been used to purchase and fund Prozone. Plus I believe it also included approx £6m as debts to be paid to GR & MM that never got paid. There would also be the £1m "paid" for the option on the shares in ACL - the option could not be transferred or sold from CCFC Ltd and had no value stated in the ccfc ltd accounts - so my guess is SISU introduced it at their own valuation as part of the takeover which would have increased the debt they were owed. In terms of hard cash as at 31/05/11 less than £30m certainly, possibly less than £25m

Still a sizeable sum to most people but nothing like the amount "owed" by CCFC ltd at 31/05/11 - £52m or the amount stated since

 

[Sky Blues]

It was around 32m in total invested in SBS&L at 31/05/11 including 2m from ARVO. From what I can see not all of that had gone into CCFC because some of it had been used to purchase and fund Prozone. Plus I believe it also included approx £6m as debts to be paid to GR & MM that never got paid. There would also be the £1m "paid" for the option on the shares in ACL - the option could not be transferred or sold from CCFC Ltd and had no value stated in the ccfc ltd accounts - so my guess is SISU introduced it at their own valuation as part of the takeover which would have increased the debt they were owed. In terms of hard cash as at 31/05/11 less than £30m certainly possibly less than £25m

Thanks OSB.

 

[Godiva]

It was stated in accoounts at around 32m in total invested in SBS&L at 31/05/11 including 2m from ARVO. From what I can see not all of that had gone into CCFC because some of it had been used to purchase and fund Prozone. Plus I believe it also included approx £6m as debts to be paid to GR & MM that never got paid. There would also be the £1m "paid" for the option on the shares in ACL - the option could not be transferred or sold from CCFC Ltd and had no value stated in the ccfc ltd accounts - so my guess is SISU introduced it at their own valuation as part of the takeover which would have increased the debt they were owed. In terms of hard cash as at 31/05/11 less than £30m certainly, possibly less than £25m

Did they ever actually 'buy' Prozone? Or was it Ranson's payment for his shares?
And wasn't Prozone profitable? What would need funding?
When Prozone was sold - did any money find way back to Ranson?

 

[oldskyblue58]

The purchase was done by cash £96k, shares issued in SBS&L £2106 and net liabilities taken on of £3.9m. Clearly the net liabilities needed funding

Prozone group was a number of companies but only Prozone Sports seemed to be trading

Prozone Sports had small profits/losses 2009 profit £312k , 2010 profit 205K and 2011 losses 73k - and a negative balance sheet of £1.97m. Prozone Group Limited didnt trade and had a negative balance sheet of £344k. Hardly very successful and on a downward track from a quick look at the figures

At 31/05/11 SBS&L were owed £2.2m by Prozone Sports Ltd and £1.5m by Prozone Group Ltd. So part of the SISU funding provided to SBS&L seems to have gone to Prozone according to Prozone accounts

As for the sale that is in the 2012 accounts which have not been filed

Seems that the debt put in by 31/05/11 from SISU 31.7m includes 3.7m for Prozone.

 

[oldskyblue58]

so at 31/05/11 the amounts included as owed to SISU in the SBS&L accounts was 29,679,942 plus 2,000,000 from ARVO = 31,679,942

deduct fom that the amounts funded in to Prozone Group and Prozone Sports 1,563,141 and 2,215,143 respectively

leaves 27,901,658

from that exclude the £1,000,000 paper transaction for the valuation of the option on the ACL shares owned by the Charity (neither the Charity nor ACL received the £1m, i strongly suspect this was SISU's own valuation of the option)

leaves 26,901,658

from that deduct the provisions for debts due to GR and MM on promotion to premiership and forms part of the original investment goodwill introduced 22/02/08 by SISU that was never paid. This equates largely to the balance of goodwill written down in the accounts of SBS&L 2011. 6,000,000

leaves 20,901,658

then take off the original cash that SISU bought in the deals to acquire CCFCH/CCFC ltd and Prozone 644,256 and 41.004 respectively (ie what those companies had in the bank when they were bought)

leaves 20,216,398 probable actual cash

but apparently by march 2013 the total debt to SISU/ARVO was 3 times that :thinking about::thinking about::thinking about:


** edit if you go back through the figures for the years since SISU took over up to 31/05/11 adjusting the group losses for things like depreciation/write downs of goodwill/amortisation of player contracts which has no cashflow and putting in purchases of fixed assets & players taking out the player/asset sales, excluding prozone etc etc then you get back to pretty much to that 20.2m as the cash requirement

 

[Noggin]

Don't worry OSB, Paul Appleton will get to the bottom of it when he investigates the directors conduct *sigh*:facepalm:

 

[sky blue john]

How can Paul Appleton state Otium offers the best deal if all that is going to happen is the debt shifting with no money changing hands ?

 

[oldskyblue58]

not sure SBJ - no one knows the details of the other offers other than Appleton apparently

Also the terms of the bids were supposed to be cash offers only...... seems to me the writing off of debt is not a cash offer

plus how has the value of the rates rebate and the value of player contracts at the date of administration been factored in ? (details in the first administration statement issued)

still a lot of unanswered questions i am afraid

which leads me to wonder how ACL can accept the CVA without being given that information and more

 

[TheRoyalScam]

@OSB (CCFC Finance Director)

- Am I correct in thinking the creditors meeting (and whether they accept the CVA or not) is crucial to all parties?
- Is Brendan Guilfoyle correct when he says that there is a chance that if the CVA is rejected by ACL then CCFC Ltd would be open to another round of bidding?
- It looks like the FL are keeping their cards very close to their chests on this one - do you agree that a statement is unlikely from them before the creditors meeting?
- All this bluster about coming out of administration and therefore being able to sign players to me is a nonsense - surely we need to both come out of administration and also file all the company accounts?
- Is it possible that with SISU's current business 'plan' they are for some obscure reason trying to distress CCFC itself?

Thanks
TRScam

 

[oldskyblue58]

hi TRS :wave:

The creditor meeting - I would guess that CCFC/SISU/Appleton want it over sooner rather than later. ACL? well that depends if you believe they are sunk without CCFC or whether you believe they are viable without the football club. I have a feeling that ACL are getting to the stage of putting together alternatives that add up to having CCFC there then telling CCFC they have had their chance. I think on the 22nd ACL will reject the CVA on the basis the administrator has not given them all the information they need

CVA rejected - well maybe another round of bidding Guilfoyle knows more about insolvency than me, but another option is for Appleton to start liquidation which might force a deal, it might be his only option

Football League - not going to get involved in the CVA process, in a large sense it is nothing to do with them, they only come in to approve the way forward once cva done. So dont expect much from them

Embargo - will need to get CVA approved and accounts filed to be out of embargo assuming the plans forward meet the FFP rules as well

Distressing CCFC - I think that was the first part of the process sometime ago but thats just my opinion

I think people should come to terms with the real possibility that CCFC will not be out of administration for some time. Certainly wont be on 22/07, there is a small chance at 28 days after that, but i am expecting us in administration until at least October

 

[NorthernWisdom]

CVA rejected - well maybe another round of bidding Guilfoyle knows more about insolvency than me, but another option is for Appleton to start liquidation which might force a deal, it might be his only option

While you're here

Cov Rugby wound their club up so shambolically, creditors were able to nip in, force administration instead, and save the club as a result.

Assuming liquidation is no other option in this case, would there be anything other parties could do to halt that process, or once it's begun is that it?

 

[oldskyblue58]

would guess the process can be stopped at any point by agreement with the liquidator.

Liquidator has greater powers than an administrator to investigate what has gone on.

http://www.legislation.gov.uk/ukpga...II/crossheading/liquidators-powers-and-duties

 

[TheRoyalScam]

Thanks for your time answering OSB58 - it confirms my layman's understanding of the current state of play, and makes a mockery of the press releases coming from the club:

From the CT - Headline: Pressley waiting for Sky Blues transfer embargo to be lifted before bringing in new centre-halves

Looks like he'll be waiting until mid-season then.

And from the offal: 'Fittest team in 12 pre-seasons' - Baker

Fittest team maybe, but with one recognized yet inexperienced centre back and only two strikers that doesn't make a 'team' - unless there is a master plan to play a marauding 1-7-2 formation with defensive wing backs.

Don't be ludicrous I hear you say - well it's just as ludicrous as playing in Northampton for three seasons while we build a tin-pot league 1 stadium 'near Coventry'.

Wake up and smell the coffee folks! (And I don't mean Just Here 4 Coffee)

 

[RogerH]

hi TRS :wave:

The creditor meeting - I would guess that CCFC/SISU/Appleton want it over sooner rather than later. ACL? well that depends if you believe they are sunk without CCFC or whether you believe they are viable without the football club. I have a feeling that ACL are getting to the stage of putting together alternatives that add up to having CCFC there then telling CCFC they have had their chance. I think on the 22nd ACL will reject the CVA on the basis the administrator has not given them all the information they need

CVA rejected - well maybe another round of bidding Guilfoyle knows more about insolvency than me, but another option is for Appleton to start liquidation which might force a deal, it might be his only option

Football League - not going to get involved in the CVA process, in a large sense it is nothing to do with them, they only come in to approve the way forward once cva done. So dont expect much from them

Embargo - will need to get CVA approved and accounts filed to be out of embargo assuming the plans forward meet the FFP rules as well

Distressing CCFC - I think that was the first part of the process sometime ago but thats just my opinion

I think people should come to terms with the real possibility that CCFC will not be out of administration for some time. Certainly wont be on 22/07, there is a small chance at 28 days after that, but i am expecting us in administration until at least October

I think that ACL will want to do what is necessary to sever the lease, thus cutting the last connection with the Ricoh for SISU. ACL can then proceed with whatever plans they have for the stadium, whilst it would force SISU to either proceed with their stadium plan (which I don't believe they really want to do), or be in permanent exile. ACL have to protect their own business from hostile takeovers, just like SISU would. Joe Elliott said that PH4 is still interested, wonder what could develop from this.

 

[Sky Blue Pete]

Really interesting stuff. So frustrated that money and power screw something so simple as a game where 11 people kick a ball between sets of goalposts