none payment of rent (1 Viewer)

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cloughie

cloughie

Well-Known Member
This is the response I had regarding rent non payment

]as a Coventry city ratepayer I would like to know what action is being taken against CCFC to recover the outstsanding rent arrears owed to ACL, bearing in mind that Coventry city council own half the shares in ACL.
I am certain that if I witheld my council tax because I believed it to be to high the council would be issuing to court proceedings against me

I am well aware of the implications of such proceedings being issued against CCFC, yet fail to see why the council should react differently to bully boy tactics by big business. If sisu have the cash to invest in ACL, then they surely should invest in paying their debts

I look forward to hearing what action is being taken to recover this outstanding debt

yours sincerely

THE REPLY
My understanding is that the rent is paid from an Escrow account of about half a million pounds. The football club is then supposed to replenish the escrow account. The rent has been paid for the last two months but not been replenished by the club. At this stage there is no rent outstanding therefore there are no grounds for taking any form of action.
Thanks for your enquiry,

John Mutton.

QUESTION

Who or what is the Escrow account and why has it been publicised that payment has been witheld who is telling porkies
 
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oldskyblue58

oldskyblue58

CCFC Finance Director
CCFC were required to place 500K in a separate account at Yorkshire Bank that ACL could draw against in the event that CCFC defaulted. As it turned out a sensible thing to have done

Details are disclosed in the ACL & CCFC Holdings accounts.

Technically CCFC have not paid the rent,................ but ACL have drawn against the deposit guarantee, that deposit is supposed to be kept at 500K

Had raised the point about the deposit before but never got to the bottom of what was going on. The email you had helps explain that thanks cloughie
 
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skyblueman

skyblueman

New Member
Interesting they have this arrangement ... OK so the rent is paid for now but if you think about it you wouldn't top up your escrow account with another £500,000 if you were about to pull the plug...
 
B

Brighton Sky Blue

Well-Known Member
oldskyblue58 said:
CCFC were required to place 500K in a separate account at Yorkshire Bank that ACL could draw against in the event that CCFC defaulted. As it turned out a sensible thing to have done

Details are disclosed in the ACL & CCFC Holdings accounts.

Technically CCFC have not paid the rent,................ but ACL have drawn against the deposit guarantee, that deposit is supposed to be kept at 500K

Had raised the point about the deposit before but never got to the bottom of what was going on. The email you had helps explain that thanks cloughie
Click to expand...

Well technically we have-it's just the money was put there a long time ago and hasn't had to be used until now. The issue is that we aren't topping up this separate account and see fit to let it run down to nothing; what strikes me as more odd is that all this time this has been reported as withholding of rent-when actually, ACL haven't missed out on what's due to them so far.
 
oldskyblue58

oldskyblue58

CCFC Finance Director
money can only be accessed by ACL if CCFC default on rent payments BSB and £500k is required to be held in the account as security to meet the terms of the lease. ACL do not control the account so it isnt classed as money that ACL has until CCFC default. CCFC has been in default and the security weakened.

What I think SISU have done is said there is £500K there lets draw it down to pay the rent, knowing it would be hard to kick CCFC out on the basis of the security being diminished. It helps the SISU cash flow at a time where there is little income. In their eyes it would be efficient use of funds and cleans the balance sheet up as TF put it. But it breaks the terms of the lease just the same

Think you need to look where the news of the defaults came from. I might be wrong but I do not think it was ACL running to the press ..... my recollection is that they responded to not created the reports. It suits SISU to paint ACL as the bad guys in this. They (SISU) are the ones who are wanting the rent reduced.
 
Wrenstreetcarpark

Wrenstreetcarpark

New Member
Surely if there is a rent guarantee deposit it has to be topped up when it is drawn down, otherwise it would have been taken years ago by Robinson and his gang. I believe that if the Club doesn't pay its rent and money is taken from the account it only gives CCFC temporary relief but they then have to repay the escrow account, which means if/when they start to pay rent again it would be rent + arrears. The debt can't just disappear.
 
oldskyblue58

oldskyblue58

CCFC Finance Director
Wrenstreetcarpark said:
Surely if there is a rent guarantee deposit it has to be topped up when it is drawn down, otherwise it would have been taken years ago by Robinson and his gang. I believe that if the Club doesn't pay its rent and money is taken from the account it only gives CCFC temporary relief but they then have to repay the escrow account, which means if/when they start to pay rent again it would be rent + arrears. The debt can't just disappear.
Click to expand...

I agree........ that's what i would have thought too
 
B

Brighton Sky Blue

Well-Known Member
oldskyblue58 said:
money can only be accessed by ACL if CCFC default on rent payments BSB and £500k is required to be held in the account as security to meet the terms of the lease. ACL do not control the account so it isnt classed as money that ACL has until CCFC default. CCFC has been in default and the security weakened.

What I think SISU have done is said there is £500K there lets draw it down to pay the rent, knowing it would be hard to kick CCFC out on the basis of the security being diminished. It helps the SISU cash flow at a time where there is little income. In their eyes it would be efficient use of funds and cleans the balance sheet up as TF put it. But it breaks the terms of the lease just the same

Think you need to look where the news of the defaults came from. I might be wrong but I do not think it was ACL running to the press ..... my recollection is that they responded to not created the reports. It suits SISU to paint ACL as the bad guys in this. They (SISU) are the ones who are wanting the rent reduced.
Click to expand...

I don't think it's wrongdoing by ACL at all (no way they're to blame for any of this fiasco)-I think it's more poor understanding by the CET journos who've led the way on reporting it. My point is that ACL are not yet out of pocket-which is technically true.
 
sky blue john

sky blue john

Well-Known Member
I don't really see any problem with this the money is put in to cover the rent and as long as this is only a temperary measure by the club.
The worrying point would be if there are any other reasons for them not topping up this account other than the cash flow issues that a lot of business are faced with at the moment.
 
skyblueman

skyblueman

New Member
Only way to positively increase cash-flow in this business already running at a significant operating loss is to sell assets and reduce the overhead = sell players.. only works once and only in the short term
 
ccfcway

ccfcway

Well-Known Member
missed this, as its on the finance page

surely these two can be merged together, they are related to CCFC
 
G

Godiva

Well-Known Member
I hear suggestions that the rent negotiations are going nowhere atm and haven't moved on for quite some time. Apparently there are no meetings and none planned.
Can anybody verify this?

In any case, if this is true I wonder why and have come up with this scenario:

Sisu have been told that ACL are positive towards a rent reduction but sisu will have to present a realistic business plan that shows sisu's intent of taking the club forward. Sisu have asked for time to establish the new squad and see some attendance numbers. This way they will have actual cost and income numbers to put into the spreadsheet and calculate a precise estimate.
The strength of this agreement would be that it will prove that sisu are not planning for a liquidation as suggested many times the last months but in fact trying to build a future. Both parties will also get the opportunity to know how many spectators there will be at home matches in league 1 and from there work out a realistic rent price that won't break the club.
ACL have accepted the escrow fund is not being topped in the meantime and sisu have promissed to fill a new escrow fund as soon as a new agreement has been signed.
As the escrow fund is empty in September, a new agreement must be signed in October.

It may not be like that at all ... maybe they are all just on a very long summer vacation.
 
skyblueman

skyblueman

New Member
All sounds very reasonable but I worry that any reduction will just come off ACL's profits which aren't that good anyway - can see this getting very messy
 
Sick Boy

Sick Boy

Well-Known Member
It is embarrassing that people write to councillors demanding to know why legal action is not being taken against their football club.
 
skyblueman

skyblueman

New Member
Not too sure this is sensible move by ACL - better to negotiate surely - pushing SISU hard may possibly backfire on them
 
oldskyblue58

oldskyblue58

CCFC Finance Director
skyblueman said:
Not too sure this is sensible move by ACL - better to negotiate surely - pushing SISU hard may possibly backfire on them
Click to expand...

I agree that negotiation is the best course of action...... but that assumes CCFC/SISU are coming to the table to negotiate, rather than just saying "not paying it"
 
G

Godiva

Well-Known Member
If this is true then it may be time to bring in a mediator.
 
skyblueman

skyblueman

New Member
True enough OSB - doesn't look good either way

Would I be correct in assuming SISU could pull out whatever money there was in CCFC whenever they liked against the booked debts to them?
 
oldskyblue58

oldskyblue58

CCFC Finance Director
doubt there is much if anything to pull out ...... certainly not enough to significantly reduce what they are owed
 
oldskyblue58

oldskyblue58

CCFC Finance Director
skyblueman said:
What about the money from player sales?
Click to expand...

will be staged payments and appearance monies etc so not all up front. Any money in will need to cover wages because there is no other trading income at the moment
 
Wrenstreetcarpark

Wrenstreetcarpark

New Member
Did ACL have any choice? They have a debtor: CCFC and they have to take steps to recover money owed. Whatever Mutton says it is nothing to do with him or the Council. It is up to Fisher and Clarke to explain to the Court that they are just puppets on strings being pulled by Seppala and see if they can get some sort of deal with ACL.
 
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