On the basis of the huge assumption that we haven't been able to sell due to an inflated asking price cos the Board rightly or wrongly want to get their money back 40-60m (as the main creditors of the club)
Is it time to face up to their losses and hugely reduce the asking price for the good of the club so a new owner can come in and take us forward and avoid administration?
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Let alone a 3rd division side for £30-40m
Unless they have billions to spare...
Even if the directors were to write off all their debt he wants to ensure that any new owner would invest in the club properly and not just try and turn it into a quick buck .
I just don't accept that, effectively you are saying that if the right owner rolled up with say £10m they would accept?... never mate, not til now at least.
So you would be taking on a business that has c. £30m of debt and an annual trading loss in excess of £10m and relatively little income until you can sell season tickets for 2011/12.
Administration would allow for that £30m to be reduced to potentially £3m.
Also you can't start a season in Administration unless you have a CVA in place, so the best option would be to sign players for the season and go into Administration as soon as the transfer window closes giving the club a full eleven months to secure a new buyer.
I think they might bite his arm off for that.
with their debt written off? How much other debt would the club have? If true then I would take my hat off to them.
But assuming the £10m is what they get and that the debt to them is £22m than £10m is 45p in the £.
A lot more than they would get in Admin IMVHO.
I really don't think they are holding out for a profit or a 100% return or anything like it.
Anyone who buys the club would have to take on the bank debt (£5 - 7m) plus be willing to take another hit this coming season (£5m????) and for future seasons until we can at least get back in the CCC where we might just break even.
As Peanuts says on the Edge of Darkness thread the question is can the current board keep dipping into their pockets and for how long?
I just don't think anyone else has put their money on the table to buy the Club yet so until then the choice is the current board cut costs, again, and wait for a buyer or take us into admin which still doesn't mean that someone will buy us.
Not an expert and am happy to be corrected but I think an administrator's duty when selling a company is to try to sell it as a going concern - that wouldn't preclude selling the ground etc separately but only if club had security of playing there and, given development restrictions, it wouldn't make much sense for a buyer to acquire the site without a viable club to pay the rent. Unlikely therefore that the administrator could maximise total value to satisfy creditors by splitting the stadium from the club.
If it came to a liquidation (a different stage) then yes the assets would be sold to maximise value.
As I understand it the same rules about the bank's charge on The Valley would apply in the event of liquidation. Without a football club as a tenant (or owner) The Valley is almost worthless, so the bank that granted the mortgage would probably end up repossessing it.
The proposed sale of the training ground to some of the directors never went through.
QUOTE
PURPOSE OF ADMINISTRATION
The primary objective of the administration is the rescuing of the company as a going concern. This presupposes a sale of the shares which with an insolvent company in all but very unusual circumstances seems actually fairly unlikely. We have though recently been involved for a client in acquiring the shares in a company in administration which now continues to trade with strengthened management.
The second objective is achieving a better result for the company’s creditors as a whole than would be likely if the company were wound up.
The third objective is realising property in order to make a distribution to one or more secured or preferential creditors.
The administrator must perform his functions in accordance with the primary objective and only if he is satisfied that this is not reasonably practicably may he move on to the second and then subsequently to the third objective.
This is probably one of the major changes introduced by the new regime making the rescue of a company a matter of priority.
There is a repeated emphasis in the Enterprise Act on the interests of the company’s creditors as a whole, the purpose of which is probably to underline the difference between administration and receivership. It is also designed to withdraw the previous advantages available to secured creditors.
Even if the administrator relies on the third objective (which is realising property to make a distribution to one or more secured creditors or preferential creditors), he has to be sure that in so going he does not unnecessarily harm the interests of the creditors of the company as a whole. The priority traditionally attaching to receivership has been virtually stood on its head.
As all creditors have standing to complain of any breach of this duty by the administrator by application to court it makes it much more likely that administrators will generally speaking act in the best interests of all creditors.
POWERS OF ADMINISTRATORS
A company in administration acts at all times through its administrator, so the directors have no authority unless the administrator specifically authorises them. In addition to running the company, the administrator can sack directors and replace them with other directors.
For buyers of businesses from an administrator the first thing to be borne in mind is that the only person authorised to commit the company is the administrator. Like most insolvency practitioners he will not want to commit himself personally and therefore anything that comes from the administrator will be heavily caveated with the phrase “no personal liability”.
The administrator cannot improve on the company’s title so if, for example, the company has given security to a third party that security still needs to be released in just the same way as if an administrator had not been appointed.
The administrator does though have power to dispose of property the subject of a floating charge (e.g. stock) as if it were not subject to that charge.
The administrator may, with the benefit of a court order, dispose of property free from any fixed charge. However, in the vast majority of cases it is likely that the administrator will prefer to negotiate directly with a secured creditor as applications to Court are expensive and time consuming, The administrator may also seek a court order to enable him to dispose of goods the subject of a hire purchase agreement.
UNQUOTE
The future looks very bleak to me!
I take the point as things stand now.
However is there a danger, given the need for social housing in particular in SE London, that developmental planning permission could be granted for The Valley site?
If that was the case there would be sufficient value in the site to pay off the mortgage, any unsecured creditors and improve the return to secured creditors I would have thought.
The administrator could thus consider that more beneficial than trading at a loss and possibly insolvently.
I think the saving grace might just be the community trust. It could perhaps be argued that jeopardising the future of the football club in SE7 could in turn threaten all the good community work carried out by the Club in the area.
On the other hand hopefully I am worrying unnecessarily and the ownership of The Valley is safely tucked away in a separate company which would not be affected by administration or even liquidation of the "trading" (football) side of things.
Does anybody know?
Seems like nobody does know.
Anything in the accounts? There are shareholders on here I believe...
Yeah and sod all the people we owe money too.
No thanks, not now, not ever. CAFC should survive the right way.
Agree with Stu.
In any case Admin is not like taking a paracetamol for a headache, more like major surgery. It's very painful, it could turn out for the better IF IF IF you find the right buyer but you could also die while under the anaesthetic. Never think Admin would be an easy option.
And you can't start TWO consecutive seasons in Admin. Lots of teams such as Stockport this season just gone have started in Admin.
What would it really cost to keep the squad together and get promoted... and then challenge for the Championship playoffs?
I do not understand people paying £100M for Fulham and now West ham when it would take somewhere between 10-25M to put us back up there.
The players and fans have done their stuff lets hope that the board can find new partners or owners to turn this around