This deserves its own thread Old Sky Blue (15 Viewers)

Brighton Sky Blue · Apr 27, 2012

thorninmyside said:
We finally agree brighton sky blue. Though I wish on this occasion we didn't.

According to that sisu don't actually own us anymore.

Indeed-I hope you see the council is not to blame here!

OyJimmy · Apr 27, 2012

Right just read the thread and I'm no clearer as to why many on here think we will be liquidated. Someone explain? Just sounds like to many people on here believing Sisu would follow through on a threat that makes no economic sense to it's investors

Brighton Sky Blue · Apr 27, 2012

Nonleagueherewecome said:
Welcome to the future. A group of stakeholders with access to the net will always find more dirt than one guy with deadlines and little time. We are all citizen journalists now.

All the same, someone email David Conn @ The Guardian!

What should we call ourselves-the SBT Times?

Brighton Sky Blue · Apr 27, 2012

OyJimmy said:
Right just read the thread and I'm no clearer as to why many on here think we will be liquidated. Someone explain? Just sounds like to many people on here believing Sisu would follow through on a threat that makes no economic sense to it's investors

ARVO Holdings act as liquidation buddies to SISU; in other words, as a means for SISU to obtain all the assets of liquidation. They have acted in this role on various occasions for SISU in the past-so the transfer of the club to ARVO suggests the club is next in line.

OyJimmy · Apr 27, 2012

Brighton Sky Blue said:
ARVO Holdings act as liquidation buddies to SISU; in other words, as a means for SISU to obtain all the assets of liquidation. They have acted in this role on various occasions for SISU in the past-so the transfer of the club to ARVO suggests the club is next in line.

But they also act as admin buddies too by the sound of it

Brighton Sky Blue · Apr 27, 2012

The net result is it looking very grim for the club-and Fisher's silence on the matter is deafening.

oldskyblue58 · Apr 27, 2012

Fair enough Dongonzalos thanks for putting it up as a thread........ the more good proven information the fans have the better

Given things a little thought..... and come up with what i think some of what is going on (a guess obviously).....

ARVO are part of the SISU set up..... its one of their funds..... who invests in those funds i do not know. It would seem to me that it is seperate to the Sconset set up. I am guessing but perhaps ARVO have provided some funding or expertise (at a cost) to CCFC and CCFC Holdings, this created a creditor that has not been paid. In order to leave it as an unpaid loan then it is secured on all the assets of CCFC & CCFC H ........ to the extent that player heart monitors the ice machine even the website, the 1960's badge and the trademarks have been taken as security but more importantly the Ryton ground. What bothered me is that the list of assets read like a list a bailiff would have when they levy distraint on a defaulting client. I think this is seperate to the £30m put in by SISU investors. It means effectively that ARVO own the trading essentials of CCFC and CCFC H and require payment for them before someone else can acquire but what ARVO dont have are any of the other creditors of CCFC and CCFC H

I am still puzzled as to where all this funding has gone to and why it was needed considering the cost savings and player sales. It just doesnt fit right somehow

Sconset - set up to attract other investment we are told. What I think they have done is to transfer the monies put into SBS&L out of the SISU funds which are probably open with lots of other investments and put that debt into Sconset. The Sconset fund has then been closed isolating the debt there..... this will improve the value of the SISU A,B,C,D & E funds .... but is also probably the reason why no further money is available to draw down. Sconset is a closed isolated fund simply holding "toxic debt"

What they have done is to seperate the assets of CCFC and CCFC H from the liabilities.

If they let CCFC and CCFC H go into administration or liquidation then ARVO will have all of the assets but none of the debt ..... there would be no value at all in CCFC or CCFC H and ARVO could buy the club back for £1 but debt free (just my guess). They need to do that to retain the League registration and the players. The only "asset" that CCFC will retain is the option on the Higgs Charity shares which if ARVO buy back the shares of CCFC may remain (to retain that option at all then CCFC has to survive - I am certain the Charity will not allow the option to transfer to any other company or organisation). Perhaps they might even retain the Sconset debt just in case better things happen after "restructuring"...... but other creditors get shafted.

I am no insolvency expert so this is all guess work

This will be bad news for a lot of traders, employees etc ...... you know the little people who always get dumped on. But you know who will get the best out of a poor outcome - SISU and its investors

btw and this is not a dig at him...... when AT goes on about "restructurng" then this is not what TF and SISU are referring to when they use the same word. AT should call it "team building" because the "restructuring" is something far more devious

Senior Vick from Alicante · Apr 27, 2012

Hi OYJIMMY, if you read the message sent originally between OSB and myself ARVO Ltd is a sister company of SISU. They hold a debenture, in our language a charge, against CCFC Ltd. This entitles them to preferential treatment before the revenue or other creditors of the club if the club was liquidated. Any saleable assets of the club would go to them and every one else can sing for it, which means SISU would walk away with a few million quid via ARVO. This could be one of three things is going to happen, 1 SISU may have secured more funding through ARVO for the coming season and have given the debenture as a security as their is nothing left to mortgage. 2 They have given up and decided that their only course of action is to liquidate the club. 3. They have put the debenture against the club to give them leverage in any negotiations in a possible exit strategy ie the debenture is worth 4 mill so we will take that for the club because if you offer a quid then its more proffitable to liquidate. Any way you look at it we are up shit creek, with out new ownership my friend it looks like curtains. SISU dont have a reputation in business for putting money in they asset strip after buying at a knock down price and dispose of the assets.

johnniericoh · Apr 27, 2012

dongonzalos said:
On another matter a charge has been registered at Companies House dated March 2012 in favour of ARVO Master Fund Limited. It covers all CCFC and CCFC Holdings assets. Please explain TF, SISU etc ........... am far more worried by this than BR spouting off in the press.

Looked at all the available info on the recent ARVO Master Fund development and other related articles but, to me, it is now totally confusing as to who owns what, who wants what, who needs what etc.

Could someone generate an organisation/flow chart that encapsulates all that is relevant to the CCFC fiasco and keep it up to date for all of us "Confused from Coventry" fans.

I seem to remember a similar chart being generated last year that explained things more clearly than the written word and could be the base for what I am proposing.

Thoughts

PUSB

Nonleagueherewecome · Apr 27, 2012

Nonleagueherewecome said:
I wouldn't have seen this thread if it had been in the Finance section...QUOTE]

That's fine, just ignore me! I don't really enjoy talking about finance anyway.

BurbageSkyBlues · Apr 27, 2012

researching the relationship between SISU and ARVO, they seem to keep popping up as joint plaintiffs in various settlements/disputes involving shares/takeovers/liquidations that sort of thing. The arrangement at our club would appear to be another of these in the making - structured to ensure they recoup as much as possible, if they need to exit.

Wherever you look, their dealings are complex and out of our league, probably beyond the reach of anyone batting on our side. I doubt that any sane potential investors (in CCFC) would be keen to get involved with them.

This is probably a reason for the failed takeover bid(s) by GH - it must be impossible to do business with these people, they are skilled and experienced operators. Pasted below is an extract from a business website, slightly dated (last August), but it gives some interesting numbers. There is also a very telling paragraph, towards the end.

http://www.cityam.com/news-and-analysis/sisu-capital-sees-second-annual-loss-fee-income-falls

"Sisu, a low-profile fund with Mayfair headquarters and no website, specialises in buying distressed debt and has a reputation for aggressive tactics to recoup funds when it invests. "

SkyBlue_Bear83 · Apr 27, 2012

As if I wasn't confused enough already :claping hands:

Maybe SISU's plan is to baffle the fans into a silence of stupidity.

oldskyblue58 · Apr 27, 2012

ok I will give it a go. This is what my understanding is.....

Sconset - controlled/managed by SISU
SBS&L - owned by Sconset (13150 shares or 96%) & Brody (548 shares or 4%)
CCFC Holdings owned 100% by SBS&L
CCFC owned 100% by CCFC Holdings

ARVO do not own any part of the above companies (as far as we know) but are a creditor of CCFC & CCFC Holdings. The money they are owed is secured on the assets of those two companies by a charge dated March 2012. (that doesnt mean they own CCFC or CCFC Holdings, it means that they have the right to the assets if something happens to those companies)

The original SISU funds A,B,C,D & E who originally held shares in SBS&L have been seperated from the venture entirely. By transferring out SBS&L to Sconset these funds got rid of the toxic debt of CCFC and at a stroke became more valuable (ie no longer had a negative £30m in those funds). All the debt now sits with a closed fund which is Sconset.

Hope that helps

torchomatic · Apr 27, 2012

Clearly? Really, is it that clear?

thorninmyside said:
Arvo are sisu. Clearly we are about to be liquidated

torchomatic · Apr 27, 2012

I still think Mutton is being a dick though.

Brighton Sky Blue said:
Indeed-I hope you see the council is not to blame here!

skyblueinBaku · Apr 27, 2012

oldskyblue58 said:
ok I will give it a go

Sconset - controlled/managed by SISU
SBS&L - owned by Sconset (13150 shares or 96%) & Brody (548 shares or 4%)
CCFC Holdings owned 100% by SBS&L
CCFC owned 100% by CCFC Holdings

ARVO do not own any part of the above companies (as far as we know) but are a creditor of CCFC & CCFC Holdings. The money they are owed is secured on the assets of those two companies by a charge dated March 2012. (that doesnt mean they own CCFC or CCFC Holdings, it means that they have the right to the assets if something happens to those companies)

The original SISU funds A,B,C,D & E who originally held shares in SBS&L have been seperated from the venture entirely. By transferring out SBS&L to Sconset these funds got rid of the toxic debt of CCFC and at a stroke became more valuable (ie no longer had a negative £30m in those funds). All the debt now sits with a closed fund which is Sconset.

Hope that helps

Thanks, OSB. I take the view (certainly as far as Sisu is concerned) that the more complex the structure, the more likely it is that it is an attempt to hide something.

oldskyblue58 · Apr 27, 2012

I think you would often be right with that notion SBD

Wrenstreetcarpark · Apr 27, 2012

So it would seem that the historic debt is locked up. The current debt (to ARVO) has been secured. So what does Joy Seppala do now? She represents the shareholders in CCFC/H, she could sell to get something back or she could force the Club into liquidation by not putting any more money in. With charges on every asset it would presemably be difficult for CCFC to borrow anywhere else.
Which way will she jump?

HateFootball · Apr 27, 2012

I've been through several 'liquidations'

I am not an accountant, but have some experiences of the process of administration.

It's not unusual for a company to have several levels of debt 'seniority'.

There may be unsecured creditors (suppliers) and secured creditors (banks, investors etc.).

If we take the latter category, there are many sub-categories. Should a company fail, the seniority of the debt-holder determines their place in the pecking order over the remaining assets.

One of the most powerful mechanisms for a business to write off debt and re-form is for the board to agree to a 'charge' on assets to another (sometimes related) party.

Administrators are called in, give the bad news to employers and suppliers and then seek to sell the remaining assets to recover what they can to pay Inland Revenue, any secured creditors and (trumping the latter) those who have a charge over the assets that are worth having.

So, if the name of the company and its franchise are the assets that are valuable and have a 'charge', then someone could bid for them and the party with the charge could have its debt repaid or counter the offer with a higher bid for the assets.

Either way, all other debts are written off and the company with the charge can raise the value of their offer until they are happy with the cash they receive or the net cash they pay (the highest bid less what they are owed) to acquire the assets in question.

If the bid price goes higher than the secured debt (unlikely), the excess cash trickles down the debt seniority list.

As you can see, because the other party has a debt that is netted off the final price, it might be seen as an advantage over other bidders.

Obviously, if no one bids for the assets, the other party walks away with the bits it wants - but either way, it's without any of the baggage of the old company.

It happens all the time. It's how companies fold and re-emerge debt-free with the same people, premises, etc, intact.

Tom Donnelly

MusicDating · Apr 27, 2012

Am I the only one who thinks all this makes a mockery of the fabled 'Fit and Proper Persons Test'??! Do the FL have to do a test on the Directors of ARVO? Or Sconset? Or SBS&L, or CCFC H etc etc?!

It all seems to be above board, but has it ever been done by a football club before?...

I think we need to try and get this out in the open (eg 'published' media), so anyone with journo contacts, please can you nudge them?

OSB, I appreciate your summary is a 'best guess' (though you probably do yourself a disservice there), but are you able to pen a quick email for people to send out?

Wrenstreetcarpark · Apr 27, 2012

The "test" is essentially of the people who are Directors of the Club. Who they borrow from can't be tested, who buys shares in a club can't be tested. Even when there is an active and open owner the question will always have to be asked whether they are actually the owner. It has been difficult to see whether it was father or son at Portsmouth and it is now difficult to see whether it is father or son trying to buy Reading. We know that Joy Seppala represents the interest that are the investors but who they are and whether they own shares themselves or whether various entities own the shares: who knows?
Is Joy Seppala a shadow director of CCFC?

oldskyblue58 · Apr 27, 2012

If you are thinking of emailing the Football League about it musicdating, have tried it before and it is waste of time

The whole fit and proper test is self certificating that you are good enough to do it..... there are no real tests or investigations of anyone's suitability or that what they are telling the League is true

As for contacting the press, I think all that folk should do is direct those journalists to read many of the posts on here. There are a lot of good points raised by a lot of posters. Football finance is news worthy right now as to a degree is CCFC if they want to investigate there is a lot of stuff here that will push them in the right direction. If they are half decent journalists they will sniff out if there is a story here for them.

Brighton Sky Blue · Apr 27, 2012

oldskyblue58 said:
If you are thinking of emailing the Football League about it musicdating, have tried it before and it is waste of time

The whole fit and proper test is self certificating that you are good enough to do it..... there are no real tests or investigations of anyone's suitability or that what they are telling the League is true

As for contacting the press, I think all that folk should do is direct those journalists to read many of the posts on here. There are a lot of good points raised by a lot of posters. Football finance is news worthy right now as to a degree is CCFC if they want to investigate there is a lot of stuff here that will push them in the right direction. If they are half decent journalists they will sniff out if there is a story here for them.

May be a silly question, but why does SISU exist as 3 different entities under the same name?

Brighton Sky Blue · Apr 27, 2012

torchomatic said:
I still think Mutton is being a dick though.

Don't dispute that though TIMS has previously blamed the council for the club's demise which is silly.

Brighton Sky Blue · Apr 27, 2012

HateFootball said:
I am not an accountant, but have some experiences of the process of administration.

It's not unusual for a company to have several levels of debt 'seniority'.

There may be unsecured creditors (suppliers) and secured creditors (banks, investors etc.).

If we take the latter category, there are many sub-categories. Should a company fail, the seniority of the debt-holder determines their place in the pecking order over the remaining assets.

One of the most powerful mechanisms for a business to write off debt and re-form is for the board to agree to a 'charge' on assets to another (sometimes related) party.

Administrators are called in, give the bad news to employers and suppliers and then seek to sell the remaining assets to recover what they can to pay Inland Revenue, any secured creditors and (trumping the latter) those who have a charge over the assets that are worth having.

So, if the name of the company and its franchise are the assets that are valuable and have a 'charge', then someone could bid for them and the party with the charge could have its debt repaid or counter the offer with a higher bid for the assets.

Either way, all other debts are written off and the company with the charge can raise the value of their offer until they are happy with the cash they receive or the net cash they pay (the highest bid less what they are owed) to acquire the assets in question.

If the bid price goes higher than the secured debt (unlikely), the excess cash trickles down the debt seniority list.

As you can see, because the other party has a debt that is netted off the final price, it might be seen as an advantage over other bidders.

Obviously, if no one bids for the assets, the other party walks away with the bits it wants - but either way, it's without any of the baggage of the old company.

It happens all the time. It's how companies fold and re-emerge debt-free with the same people, premises, etc, intact.

Tom Donnelly

Seems to me from what you're saying that we (or more rather, SISU on behalf of CCFC Holdings) are attempting to do what Rangers have been proposing for a while now-that is, dissolve one company with all the existing debt (in this case, that seems to be Sconset), and reform a new business with the same name, identity, people, and assets of the old one. The people who are owed money see none of it but the new entity is essentially the old one minus the debts; devious and yet perfectly legitimate at the same time :thinking about:

HateFootball · Apr 27, 2012

Yes BSB.

It will be a different company name, but the trading name can be the same (CCFC). It's common practice to shrug off debts this way. http://en.wikipedia.org/wiki/Administration_(British_football)

You don't need to worry unless you have an unpaid invoice at the time a company goes into administration. Administration can be self-imposed (voluntary) or an unpaid creditor files for liquidation to recover debts. Either way, it's usually insolvency that's the tipping point.

I think Coventry Council underestimate their opposition in SISU. They have vast experience of debt markets. Not sure we're in the best hands with Councillor Mutton leading the way. He might want to get that invoice paid or factored asap.

Tom Donnelly

oldskyblue58 · Apr 27, 2012

Brighton Sky Blue said:
May be a silly question, but why does SISU exist as 3 different entities under the same name?

probably something to do with where they recognise income or some tax planning BSB. Cant imagine its for no reason

oldskyblue58 · Apr 27, 2012

HateFootball said:
Yes BSB.

It will be a different company name, but the trading name can be the same (CCFC). It's common practice to shrug off debts this way. http://en.wikipedia.org/wiki/Administration_(British_football)

You don't need to worry unless you have an unpaid invoice at the time a company goes into administration. Administration can be self-imposed (voluntary) or an unpaid creditor files for liquidation to recover debts. Either way, it's usually insolvency that's the tipping point.

I think Coventry Council underestimate their opposition in SISU. They have vast experience of debt markets. Not sure we're in the best hands with Councillor Mutton leading the way. He might want to get that invoice paid or factored asap.

Tom Donnelly

I am pretty certain that both the charity and council will have appointed some high powered accountants and lawyers to help them deal with SISU. They have had plenty of experience as to how SISU operate and are fore warned.

Brighton Sky Blue · Apr 27, 2012

Sounds incredibly murky business really, though if OSB is correct, we can expect Sconset to be dissolved whilst SISU's sister company gathers the remaining assets from CCFC Holdings. The difficult, and most important question, to answer is what is the future for the club under these circumstances?

HateFootball · Apr 27, 2012

oldskyblue58 said:
I am pretty certain that both the charity and council will have appointed some high powered accountants and lawyers to help them deal with SISU. They have had plenty of experience as to how SISU operate and are fore warned.

No doubt!

But megaphone diplomacy over such a sensitive issue is not usually advised by any accountants or lawyers. SISU have not commented on CCC's council tax rates. I don't see what business it is of CCC to comment on the salaries SISU pay to players. Seems very unprofessional behaviour to me.

coundonskyblue · Apr 27, 2012

This debenture thing then, am I right in thinking that if we did go into admin or liquidation that Arvo would be at the front of the queue ahead of HMRC or Football debts? Isn't it a FL requirement that clubs exiting administration treat their football debts as a priority?

oldskyblue58 · Apr 27, 2012

I agree, these matters are best dealt with calmly away from the press however SISU's appointed representatives (the directors) have never been shy to paint the council in a poor light press wise in the past. It isnt all one sided and politicians are apt to seek publicity in election years as much as businessmen with an agenda use the press to their own ends when it suits.

The CCFC Board make announcements etc but trouble is SISU themselves say very very little and that has actually been counter productive. It wasnt the council that generated the atmosphere of mistrust that exists, that was very much derived from the Board of CCFC and its owners. They have been almost dismissive of the Council in the past and that was less than helpful.

HateFootball · Apr 27, 2012

Yes... the disputed "Football ceditors 'rule'" would put secured creditors ahead of HMRC. It's a loop-hole in the Enterprise Act 2002 that SISU are able to take advantage of. It may not go unchallenged: http://www.kinsellatax.co.uk/index.php?page=hmrc-challenge-football-creditors-rule

It's an abomination. (I studied Law at university and know a little about tax law)

oldskyblue58 · Apr 27, 2012

coundonskyblue said:
This debenture thing then, am I right in thinking that if we did go into admin or liquidation that Arvo would be at the front of the queue ahead of HMRC or Football debts? Isn't it a FL requirement that clubs exiting administration treat their football debts as a priority?

only in so far as the debts are covered by unsecured assets. ARVO will have first claim on the assets they have listed on the debenture

Football creditors rule should be scrapped ..... I can not think of a moral or legal case for it. It doesnt exist in Scotland btw

dongonzalos · Apr 27, 2012

Good to see this is getting a full 2 page spread and no stone is been unturned by CET AND ITS FANTASTIC INVESTIGATIVE JOURNALISM.

This deserves its own thread Old Sky Blue (15 Viewers)

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