Possible outcomes of the JR (1 Viewer)

Jim · May 27, 2014

Houdi said:
The general view seems to be that CCC will probably win the JR ,of course they may prove to be wishful thinking, however most seem to think it won't prove a game changer for SISU. Similarly there doesn't seem any evidence that ACL are in any short/medium term danger. Indeed they are due a cash injection of £590,000 very shortly, ironically from SISU/Otium. A new stadium remains at best a distant dream, or to most fans an utter fantasy.
So the question now is where do SISU realistically go from here, what credible options do they now have? Every months their losses continue to mount, and the hole their in just gets bigger and bigger.

Realistically all SISU could do if they lost the JR would be to try and reduce the losses incurred on the whole investment. The only way to do this would be to invite offers for the club, for say anywhere from £5m - £20m, and write off all outstanding debt. The offer value is essentially a guess at what would an investor would reasonably offer for the club on the basis that club debts would essentially be written down to normal operating debt owed to external parties (suppliers / HMRC). This also would include the fact that the club would have in inherent value as a going concern with the glden share / league status intact. The new owners are then free to negotiate with ACL / Council for either a rental deal, F&B deal or full ownership of ACL. SISU would gain the consideration offered and write off the debt against taxable income. This would gain them anywhere from £14m - £25m.

If SISU liquidate they will get pretty much no cash in return. The players will not be worth a huge amount, and there are no other real assets of any worth if the club is not sold as a going concern. All they will claw out of the situation is a bad debt write off expense to to apply against taxable income. This would be worth £10m at the most I would guess.

If SISU continue to fund the club the losses will just build and build with only a 20-25% clawback from taxable losses available. Really should not be a viable option for them once the Ricoh is out of reach permanently.

Very much back of envelope calculations and a couple of assumptions but the better option has to be to sell as a going concern to a third party.

Sky Blue Dal · May 27, 2014

The JR is all about whether the CCC have followed the correct protocols.

I feel that CCC may win this case, as so far it's all gone in there favour.

I do have a feeling that the judge has already made up his mind on what the outcome will be and the only reason SISU won the appeal was to allow SISU to have the benefit of doubt and rightly so, they should be allowed this.

If SISU do have evidence, it will be a challenge to convince the judge to allow it to be admissible in the case and if they are successful, the case will over run a day or so, and not set to another date a couple of months down the line. The judge legally has to take into mind how much this case is costing and his job is also to keep the cost of the case as low as possible for both parties hence he would want to give them the outcome verdict sooner than later.

If SISU or Council lose and one of them decides to make a legal challenge against the verdict of the judge in charge of the JR, they would have to convince the appeal judge that a wrong decision was made and it was not legal.

The success of an appeal is not going to be as easy as people think. If SISU appeal the verdict, the appeal judge will most likley be aware that they had won the previous appeal and would feel they have used up enough appeals regarding this case but if they have a shit hot barrister he/she may be able to turn this around for them. So far I have not seen any evidence from there barristers that they have this capability.

This is just my opinion but no one can foresee what verdict the judge will make but that is my take on what I have seen so far.

If SISU lose I can't see, how they will be able to sustan large losses of running a failing football club. Surley the investors will have a twitchy finger on the trigger and also are they not calling back there debts this summer?

If the council lose, I can imagine the EU council giving them a hefty fine but a long enough timeframe to re-finance the stadium to recoup the loan without any further detrimental losses to the local rate payers. ACL will also be disbanded and replaced by a new management organisation.

Well we can only wait and see.

rightumpty · May 27, 2014

shmmeee said:
The judge orders Seppala and Lucas to be handcuffed together until a deal is reached, leading to the comedy hit of the summer: Bensons & Hedges

Or SISU lose again, Sapalla pisses her pants, Fisher shits himself and Labovitch is made to clear up the mess!!!!!!!!!!!!!!!!!!!!!!!!

Astute · May 27, 2014

Sky Blue Dal said:
If SISU or Council lose and one of them decides to make a legal challenge against the verdict of the judge in charge of the JR, they would have to convince the appeal judge that a wrong decision was made and it was not legal.

The success of an appeal is not going to be as easy as people think.

From what I can gather you can't appeal for the reason of being unhappy with the decision. There must be new information to come from somewhere that shows that the wrong conclusion was decided on. Anything used in the JR won't be usable again.

paulw · May 27, 2014

James Smith said:
As I understand it this JR is all about the procedures the council should have followed and the actions they should have taken in relation to the ACL refinancing.

So there are a few possibilities (including those already posted) stemming from the courts decision:

a) If the council have done everything correctly and the Judge agrees then the outcome is not favourable to Sisu. ACL are not required to hand back loan and until relations thaw or new stadium built we're stuck in Northampton.

b) If the council have done everything correctly and the Judge agrees then the outcome is not favourable to Sisu. ACL are not required to hand back loan and we're put up for sale/administration with ARVO getting the lions share of any money from asset sales.

c) If the council haven't done everything correctly and the Judge agrees then the outcome is not favourable to the council. Judge rules that if correct procedures etc. are followed next time then the loan will be valid. ACL get new loan off the council which is lawful and until relations thaw or new stadium built we're stuck in Northampton.

d) If the council haven't done everything correctly and the Judge agrees then the outcome is not favourable to the council. Judge rules that council cannot just loan ACL the money again and ACL have to hand back the loan. ACL get new loan (probably at slightly higher rates) off of a commercial lender and unless they default on that loan until relations thaw or new stadium built we're stuck in Northampton.

e) If the council haven't done everything correctly and the Judge agrees then the outcome is not favourable to the council. Judge rules that council cannot just loan ACL the money again and ACL have to hand back the loan. ACL can't get new loan (even at slightly higher rates) off of a commercial lender and they have to hand back the lease to the council. They put the lease out for bids and who knows who might bid for it - could just be Sisu or them and others who are interested (not ruling out a joint bid but suggesting that there could be more than one bidder).

i) Sisu put in highest bid and we return to Ricoh, whilst dismantling IEC and giving us the Pie money.

ii) Someone else puts in a higher bid than Sisu and obtains the lease. Until a deal can be struck (or Sisu launch a sucessful legal challenge of the bidding process) or new stadium is built we're stuck in Northampton.

f) If the council haven't done everything correctly and the Judge agrees then the outcome is not favourable to the council. Judge rules that council cannot just loan ACL the money again and ACL have to hand back the loan. ACL can't get new loan (even at slightly higher rates) off of a commercial lender and they have to hand back the lease to the council. They put the entire property freehold up for sale and who knows who might bid for it - could just be Sisu or them and others who are interested (again not ruling out a joint bid e.g. with AEG but suggesting that there could be more than one bidder).

i) Sisu put in highest bid and we return to Ricoh, whilst dismantling IEC possibly installing AEG and giving us the Pie money.

ii) Someone else puts in a higher bid than Sisu and obtains the freehold. Until a deal can be struck (or Sisu launch a sucessful legal challenge of the bidding process) or new stadium is built we're stuck in Northampton.

Bound to be more though feel free to add to the list. All quite depressing as we're unlikely to return to Coventry any time soon under most outcomes and one could see the end of our club.

Excellent post.

If CCC win then SISU will appeal. This has absolutely no meaning for SISU as CCFC are only a fraction of their business commitments. SISU don't care if this takes years as long as they win.
If SISU win then this will send a precedence that will have an effect like PPI. Every company will be taking the council to court. Just won't happen even the court agree with SISU.

Outcome = The judge / court will suggest the two parties reach an agreement or ask the two parties to re-evaluate the situation and ask the court to meet 6 months later.

Can these two make an agreement? No way.

SISU = As I said we are such a small portfolio in their companies responsibilities that they could just let us go under or progress depending on our manager's capability. Will they build a stadium? Not in my life time.

CCC = We have virtually the same council as the one pre-election so their opinion won't change. The Coventry public don't see our plight as being a problem so they, the CCC, can continue as long as they want.

I am a total optimist so the only possible outcome is a white-knight comes along. If not this will really take year.

Paulw is a new name for me and my old name was the one that broke the news that SISU would do this as my friend is a lawyer/solicitor for SISU. He is not confident.

letsallsingtogether · May 27, 2014

I know what you are saying it is just that one is shouting we are right the other has others shouting for them.
Maybe if they had listened more instead of shouting they would have had more people fighting their corner for them?

ccfcway said:
Read this a few times. Genuine question, whio is it that is "speaking the loudest", as i cant work it out. Is it SISU or CCC ?

duffer · May 27, 2014

I think this has already been nailed down by previous posters, but I'll chuck in my tuppence worth...

SISU win the JR: CCC are obliged to reconsider their decision to loan the money, ACL are potentially left to find funding elsewhere. Still no guarantee that SISU get to own the Ricoh, there's miles to go for that, but perhaps gives them a shot at it and definitely further distresses ACL. Obviously that's what SISU are hoping for, but even in this circumstance it's a negotiation rather than a foregone conclusion.

SISU lose the JR: SISU are forced to negotiate with ACL/CCC, or build a new stadium, or sell up/liquidate. I don't think staying at Northampton for another four years makes sense to anyone - but that's just my opinion, obviously.

With regard to appeals and the overall JR process, there's some useful info here:

http://www.richardbuxton.co.uk/v3.0/node/51

and here...

http://www.richardbuxton.co.uk/v3.0/node/15

In essence it's unlikely the High Court will give either side permission to appeal, but the loser could go down the route of the Appeals Court. Key point: "Usually, no new evidence is allowed...". Also, if permission to appeal is refused by the Appeals Court, that's it - if it is allowed appeals (according to this source at least), can happen quite quickly and be decided upon fairly straightforwardly.

So it could be that dragging this out for years perhaps isn't that likely. Which I think is vaguely encouraging.

Hobo · May 27, 2014

The revolution starts here! And will not be televised!

Sky Blue Dal · May 30, 2014

paulw said:
Outcome = The judge / court will suggest the two parties reach an agreement or ask the two parties to re-evaluate the situation and ask the court to meet 6 months later.

Paul, I don't think the Judge is in a position to order that both parties get together and reach an agreement. He is not interested in there business dealing.

His only interest is to see that the CCC had legally carried out the correct procedures for using the State aid to re-finance a city asset. SISU are only taking this to court to try and prove it was not the case hence damage limitation and part of there public image redemption exercise.

I really don't believe if the judgement goes against the CCC that they will be dealing with SISU again. There is too much water under the bridge as they say.

Possible outcomes of the JR (1 Viewer)

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