ESI own the Leaseholds and we are told they have a legally binding agreement to purchase the freeholds.
No one knows what "rent" may be being paid, but we suspect it's a peppercorn (very little).
Airman Brown is quoting some of the directors agreement and saying that what ESI and RD have done is not permitted.
We need an update of takeover bite sized thread
Would speculate that Staprix originally had no security at all and can’t alter the fact that it has an effective second charge after the Director loans. The new charge acknowledges the precedence of the Director loans and their rights are unaffected.
Assume the directors did not acquire any right to approve further charge on the assets. Remember the main debt at the time was a bank loan and that would presumably have prevented further charges on the assets. Not ITK simply trying to see a logical explanation.
Obviously I understand everything but for the benefit of those not as intelligent as me, could someone kindly explain what exactly has happened / been confirmed today?
Its not 100% done
Explain it, in what sense?
It was never going to be 100% done until the later freehold purchases, which have been well discussed. What is new today?
The charge added to the football club today asks more questions than it answers.
How is it legally valid if it contradicts the exdirectors loans?
Of course this isn't a problem if they have been paid up, or given written permission, but @Airman Brown is saying he knows they haven't.
I'm no lawyer but the 'directors' loans' are singled out in the new charge agreement as a 'permitted encumbrance.'
If there is no change to the status of the 'directors' loans' why would written permission be necessary?
I'm trying to think back to the days when I used to deal with this sort of thing.
I'm thinking that if we took a 2nd charge (which I think Staprix have done), you had to give notice to the holder of the 1st charge(s).
So in this case Staprix should give notice to the ex-directors that they have taken a 2nd charge.
If the security needed to be relied upon the ex-directors would be paid before Staprix.
You couldn't give notice until the 2nd charge had actually been registered, so the notices should be received in due course.
Clause 9.1.3. places on obligation on the club, at Roland's pleasure, for the club to place a durable nameplate on assets over £100k indicating Staprix has "first fixed charge".
I think that might be news to the ex-directors, who as I understand it have a preceding first fixed charge over all the assets of all three companies. That's one presumption in the debenture I think would be challenged, and I don't think even a second charge could necessarily be achieved without the ex-directors' consent - maybe that depends on the wording of their debentures. I presume given previous discussions, but may be wrong, that they have that veto, in which case it's more than a matter of notification.
I'll need to read the 32 pages fully. But the ex-directors are listed as Permitted Encumbrancies, which to me means that it is legally documented, that they already hold a debenture.
Ok, I'm not sure whether this is sufficient or whether the the ex-directors should be issued with Deeds of Priority.
How does it work with regards to which company the debentures are secured against? They aren't both on the books of the same trading entity, but in the same group of companies?
Who would be responsible for the ex directors entitlements and legal rights at the point of sale the purchasers or the vendor? If neither notified or satisfied the ex directors who is liable?
The debentures are secured against Charlton Athletic Football Company Limited, because that is what ESI has bought.
I would say it is a moot point on who is responsible for the ex-directors loan as of today, because they are repayable if we reach the premier League and by then RD will/ should be long gone.
Have to say, I quite admire the way ESI just got stuck in and bought the club despite these legal complexities and complications.
If they’d ummed and ahed like ‘our’ antipodean friends we’d all have been driven more round the bend than we already are. Can you imagine two more years of this thread?
Obviously I understand everything but for the benefit of those not as intelligent as me, could someone kindly explain what exactly has happened / been confirmed today?
Its not 100% done
Explain it, in what sense?
It was never going to be 100% done until the later freehold purchases, which have been well discussed. What is new today?
The charge added to the football club today asks more questions than it answers.
How is it legally valid if it contradicts the exdirectors loans?
Of course this isn't a problem if they have been paid up, or given written permission, but @Airman Brown is saying he knows they haven't.
I'm no lawyer but the 'directors' loans' are singled out in the new charge agreement as a 'permitted encumbrance.'
If there is no change to the status of the 'directors' loans' why would written permission be necessary?
'Permitted Encumbrance' is my new band name.
RD’s loan to CAFC was probably unsecured because he owned everything anyway.
ESI have bought the company CAFC with the existing lease and also the debt owed to Staprix The loan now needs to be secured with a charge over all the property leased to CAFC. Normally a lender will not allow any other creditor to have a separate charge on the same property ie an encumbrance to exercising the right to seize the mortgaged property in the event of default.
The charge simply says the secured Director loans, which are a potential encumberance are exempt from this condition. The terms of the Director loans would seem unaffected.
Thanks for this clarification @Dippenhall. One thing I don't really get is, if Duchatelet still owns the freehold to the Valley and Sparrows Lane, why does he need a charge over the assets? After all, he owns them.
Because ESI have also taken on the debt to Staprix and it would be unsecured without Staprix registering their debenture/charge.
@dippenhall what makes you think ESI have taken on the Starprix debt?
I would suggest that the debt or part debt is the agreed purchase price.
Came on here to pay my respects to the dearly deceased as @blackpool72 did only to find that a late recovery had been made and an apparent new lease of life found. Sorry for the next poor taste but it seems the administrators are threatening to turn this off and family members still feel there are signs of life. The next 4 hours could be crucial.
Obviously I understand everything but for the benefit of those not as intelligent as me, could someone kindly explain what exactly has happened / been confirmed today?
Its not 100% done
Explain it, in what sense?
It was never going to be 100% done until the later freehold purchases, which have been well discussed. What is new today?
The charge added to the football club today asks more questions than it answers.
How is it legally valid if it contradicts the exdirectors loans?
Of course this isn't a problem if they have been paid up, or given written permission, but @Airman Brown is saying he knows they haven't.
I'm no lawyer but the 'directors' loans' are singled out in the new charge agreement as a 'permitted encumbrance.'
If there is no change to the status of the 'directors' loans' why would written permission be necessary?
'Permitted Encumbrance' is my new band name.
RD’s loan to CAFC was probably unsecured because he owned everything anyway.
ESI have bought the company CAFC with the existing lease and also the debt owed to Staprix The loan now needs to be secured with a charge over all the property leased to CAFC. Normally a lender will not allow any other creditor to have a separate charge on the same property ie an encumbrance to exercising the right to seize the mortgaged property in the event of default.
The charge simply says the secured Director loans, which are a potential encumberance are exempt from this condition. The terms of the Director loans would seem unaffected.
Thanks for this clarification @Dippenhall. One thing I don't really get is, if Duchatelet still owns the freehold to the Valley and Sparrows Lane, why does he need a charge over the assets? After all, he owns them.
Because ESI have also taken on the debt to Staprix and it would be unsecured without Staprix registering their debenture/charge.
@dippenhall what makes you think ESI have taken on the Starprix debt?
I would suggest that the debt or part debt is the agreed purchase price.
I can agree with that but which is it?
What link is there between the debt run up by Duchatelet and the price to be paid to Duchatelet, if any?
Is it evidenced or just a (reasonable) assumption?
Obviously I understand everything but for the benefit of those not as intelligent as me, could someone kindly explain what exactly has happened / been confirmed today?
Its not 100% done
Explain it, in what sense?
It was never going to be 100% done until the later freehold purchases, which have been well discussed. What is new today?
The charge added to the football club today asks more questions than it answers.
How is it legally valid if it contradicts the exdirectors loans?
Of course this isn't a problem if they have been paid up, or given written permission, but @Airman Brown is saying he knows they haven't.
I'm no lawyer but the 'directors' loans' are singled out in the new charge agreement as a 'permitted encumbrance.'
If there is no change to the status of the 'directors' loans' why would written permission be necessary?
'Permitted Encumbrance' is my new band name.
RD’s loan to CAFC was probably unsecured because he owned everything anyway.
ESI have bought the company CAFC with the existing lease and also the debt owed to Staprix The loan now needs to be secured with a charge over all the property leased to CAFC. Normally a lender will not allow any other creditor to have a separate charge on the same property ie an encumbrance to exercising the right to seize the mortgaged property in the event of default.
The charge simply says the secured Director loans, which are a potential encumberance are exempt from this condition. The terms of the Director loans would seem unaffected.
Thanks for this clarification @Dippenhall. One thing I don't really get is, if Duchatelet still owns the freehold to the Valley and Sparrows Lane, why does he need a charge over the assets? After all, he owns them.
Because ESI have also taken on the debt to Staprix and it would be unsecured without Staprix registering their debenture/charge.
@dippenhall what makes you think ESI have taken on the Starprix debt?
I would suggest that the debt or part debt is the agreed purchase price.
I can agree with that but which is it?
What link is there between the debt run up by Duchatelet and the price to be paid to Duchatelet, if any?
Is it evidenced or just a (reasonable) assumption?
I don't know, I haven't seen anything documented, but if he's owed @£50M, then he's going to take security.
Obviously I understand everything but for the benefit of those not as intelligent as me, could someone kindly explain what exactly has happened / been confirmed today?
Its not 100% done
Explain it, in what sense?
It was never going to be 100% done until the later freehold purchases, which have been well discussed. What is new today?
The charge added to the football club today asks more questions than it answers.
How is it legally valid if it contradicts the exdirectors loans?
Of course this isn't a problem if they have been paid up, or given written permission, but @Airman Brown is saying he knows they haven't.
I'm no lawyer but the 'directors' loans' are singled out in the new charge agreement as a 'permitted encumbrance.'
If there is no change to the status of the 'directors' loans' why would written permission be necessary?
I'm trying to think back to the days when I used to deal with this sort of thing.
I'm thinking that if we took a 2nd charge (which I think Staprix have done), you had to give notice to the holder of the 1st charge(s).
So in this case Staprix should give notice to the ex-directors that they have taken a 2nd charge.
If the security needed to be relied upon the ex-directors would be paid before Staprix.
You couldn't give notice until the 2nd charge had actually been registered, so the notices should be received in due course.
Clause 9.1.3. places on obligation on the club, at Roland's pleasure, for the club to place a durable nameplate on assets over £100k indicating Staprix has "first fixed charge".
I think that might be news to the ex-directors, who as I understand it have a preceding first fixed charge over all the assets of all three companies. That's one presumption in the debenture I think would be challenged, and I don't think even a second charge could necessarily be achieved without the ex-directors' consent - maybe that depends on the wording of their debentures. I presume given previous discussions, but may be wrong, that they have that veto, in which case it's more than a matter of notification.
If the directors loan was not conditional on no further charges on assets without their consent their rights have not been affected. They are only affected in the event of default in repayment after promotion or insolvency.
It’s becoming clear why this sale was described as “complicated”. The details are of interest to some, but I don’t see why the existing debt arrangements and property structures continuing give rise fir concern given the strength of the covenant backing the club’s financials.
Obviously I understand everything but for the benefit of those not as intelligent as me, could someone kindly explain what exactly has happened / been confirmed today?
Its not 100% done
Explain it, in what sense?
It was never going to be 100% done until the later freehold purchases, which have been well discussed. What is new today?
The charge added to the football club today asks more questions than it answers.
How is it legally valid if it contradicts the exdirectors loans?
Of course this isn't a problem if they have been paid up, or given written permission, but @Airman Brown is saying he knows they haven't.
I'm no lawyer but the 'directors' loans' are singled out in the new charge agreement as a 'permitted encumbrance.'
If there is no change to the status of the 'directors' loans' why would written permission be necessary?
I'm trying to think back to the days when I used to deal with this sort of thing.
I'm thinking that if we took a 2nd charge (which I think Staprix have done), you had to give notice to the holder of the 1st charge(s).
So in this case Staprix should give notice to the ex-directors that they have taken a 2nd charge.
If the security needed to be relied upon the ex-directors would be paid before Staprix.
You couldn't give notice until the 2nd charge had actually been registered, so the notices should be received in due course.
Clause 9.1.3. places on obligation on the club, at Roland's pleasure, for the club to place a durable nameplate on assets over £100k indicating Staprix has "first fixed charge".
I think that might be news to the ex-directors, who as I understand it have a preceding first fixed charge over all the assets of all three companies. That's one presumption in the debenture I think would be challenged, and I don't think even a second charge could necessarily be achieved without the ex-directors' consent - maybe that depends on the wording of their debentures. I presume given previous discussions, but may be wrong, that they have that veto, in which case it's more than a matter of notification.
I'll need to read the 32 pages fully. But the ex-directors are listed as Permitted Encumbrancies, which to me means that it is legally documented, that they already hold a debenture.
Ok, I'm not sure whether this is sufficient or whether the the ex-directors should be issued with Deeds of Priority.
How does it work with regards to which company the debentures are secured against? They aren't both on the books of the same trading entity, but in the same group of companies?
Who would be responsible for the ex directors entitlements and legal rights at the point of sale the purchasers or the vendor? If neither notified or satisfied the ex directors who is liable?
The debentures are secured against Charlton Athletic Football Company Limited, because that is what ESI has bought.
I would say it is a moot point on who is responsible for the ex-directors loan as of today, because they are repayable if we reach the premier League and by then RD will/ should be long gone.
The reason I ask is that they "agreed to roll them over" for the last 2 take overs, didn't they? This time they haven't. Do they not need to be informed.
Who breaches the terms if they should have been informed and weren't?
The last thing we want, or need, is a legal issue delaying everything.
close the thread but start a new one for the deal forensic team - something like 'on my command, charge!!!! or 'to charge or not to charge', 'who's charge is it anyway' or 'what the charging ader does all this bollox mean' - i'm off to the rumours thread
close the thread but start a new one for the deal forensic team - something like 'on my command, charge!!!! or 'to charge or not to charge', 'who's charge is it anyway' or 'what the charging ader does all this bollox mean' - i'm off to the rumours thread
Obviously I understand everything but for the benefit of those not as intelligent as me, could someone kindly explain what exactly has happened / been confirmed today?
Its not 100% done
Explain it, in what sense?
It was never going to be 100% done until the later freehold purchases, which have been well discussed. What is new today?
The charge added to the football club today asks more questions than it answers.
How is it legally valid if it contradicts the exdirectors loans?
Of course this isn't a problem if they have been paid up, or given written permission, but @Airman Brown is saying he knows they haven't.
I'm no lawyer but the 'directors' loans' are singled out in the new charge agreement as a 'permitted encumbrance.'
If there is no change to the status of the 'directors' loans' why would written permission be necessary?
I'm trying to think back to the days when I used to deal with this sort of thing.
I'm thinking that if we took a 2nd charge (which I think Staprix have done), you had to give notice to the holder of the 1st charge(s).
So in this case Staprix should give notice to the ex-directors that they have taken a 2nd charge.
If the security needed to be relied upon the ex-directors would be paid before Staprix.
You couldn't give notice until the 2nd charge had actually been registered, so the notices should be received in due course.
Clause 9.1.3. places on obligation on the club, at Roland's pleasure, for the club to place a durable nameplate on assets over £100k indicating Staprix has "first fixed charge".
I think that might be news to the ex-directors, who as I understand it have a preceding first fixed charge over all the assets of all three companies. That's one presumption in the debenture I think would be challenged, and I don't think even a second charge could necessarily be achieved without the ex-directors' consent - maybe that depends on the wording of their debentures. I presume given previous discussions, but may be wrong, that they have that veto, in which case it's more than a matter of notification.
I'll need to read the 32 pages fully. But the ex-directors are listed as Permitted Encumbrancies, which to me means that it is legally documented, that they already hold a debenture.
Ok, I'm not sure whether this is sufficient or whether the the ex-directors should be issued with Deeds of Priority.
How does it work with regards to which company the debentures are secured against? They aren't both on the books of the same trading entity, but in the same group of companies?
Who would be responsible for the ex directors entitlements and legal rights at the point of sale the purchasers or the vendor? If neither notified or satisfied the ex directors who is liable?
The debentures are secured against Charlton Athletic Football Company Limited, because that is what ESI has bought.
I would say it is a moot point on who is responsible for the ex-directors loan as of today, because they are repayable if we reach the premier League and by then RD will/ should be long gone.
The reason I ask is that they "agreed to roll them over" for the last 2 take overs, didn't they? This time they haven't. Do they not need to be informed.
Who breaches the terms if they should have been informed and weren't?
The last thing we want, or need, is a legal issue delaying everything.
I agree it would seem a good idea for Southall and his lawyer to have a meeting with the ex-directors.
close the thread but start a new one for the deal forensic team - something like 'on my command, charge!!!! or 'to charge or not to charge', 'who's charge is it anyway' or 'what the charging ader does all this bollox mean' - i'm off to the rumours thread
There's no rumours on the Rumours thread, Doucher ...... only a few anxiety-ridden souls who seem to believe we're already almost relegated.
Obviously I understand everything but for the benefit of those not as intelligent as me, could someone kindly explain what exactly has happened / been confirmed today?
Its not 100% done
Explain it, in what sense?
It was never going to be 100% done until the later freehold purchases, which have been well discussed. What is new today?
The charge added to the football club today asks more questions than it answers.
How is it legally valid if it contradicts the exdirectors loans?
Of course this isn't a problem if they have been paid up, or given written permission, but @Airman Brown is saying he knows they haven't.
I'm no lawyer but the 'directors' loans' are singled out in the new charge agreement as a 'permitted encumbrance.'
If there is no change to the status of the 'directors' loans' why would written permission be necessary?
I'm trying to think back to the days when I used to deal with this sort of thing.
I'm thinking that if we took a 2nd charge (which I think Staprix have done), you had to give notice to the holder of the 1st charge(s).
So in this case Staprix should give notice to the ex-directors that they have taken a 2nd charge.
If the security needed to be relied upon the ex-directors would be paid before Staprix.
You couldn't give notice until the 2nd charge had actually been registered, so the notices should be received in due course.
Clause 9.1.3. places on obligation on the club, at Roland's pleasure, for the club to place a durable nameplate on assets over £100k indicating Staprix has "first fixed charge".
I think that might be news to the ex-directors, who as I understand it have a preceding first fixed charge over all the assets of all three companies. That's one presumption in the debenture I think would be challenged, and I don't think even a second charge could necessarily be achieved without the ex-directors' consent - maybe that depends on the wording of their debentures. I presume given previous discussions, but may be wrong, that they have that veto, in which case it's more than a matter of notification.
I'll need to read the 32 pages fully. But the ex-directors are listed as Permitted Encumbrancies, which to me means that it is legally documented, that they already hold a debenture.
Ok, I'm not sure whether this is sufficient or whether the the ex-directors should be issued with Deeds of Priority.
How does it work with regards to which company the debentures are secured against? They aren't both on the books of the same trading entity, but in the same group of companies?
Who would be responsible for the ex directors entitlements and legal rights at the point of sale the purchasers or the vendor? If neither notified or satisfied the ex directors who is liable?
The debentures are secured against Charlton Athletic Football Company Limited, because that is what ESI has bought.
I would say it is a moot point on who is responsible for the ex-directors loan as of today, because they are repayable if we reach the premier League and by then RD will/ should be long gone.
The reason I ask is that they "agreed to roll them over" for the last 2 take overs, didn't they? This time they haven't. Do they not need to be informed.
Who breaches the terms if they should have been informed and weren't?
The last thing we want, or need, is a legal issue delaying everything.
I agree it would seem a good idea for Southall and his lawyer to have a meeting with the ex-directors.
Obviously I understand everything but for the benefit of those not as intelligent as me, could someone kindly explain what exactly has happened / been confirmed today?
Its not 100% done
Explain it, in what sense?
It was never going to be 100% done until the later freehold purchases, which have been well discussed. What is new today?
The charge added to the football club today asks more questions than it answers.
How is it legally valid if it contradicts the exdirectors loans?
Of course this isn't a problem if they have been paid up, or given written permission, but @Airman Brown is saying he knows they haven't.
I'm no lawyer but the 'directors' loans' are singled out in the new charge agreement as a 'permitted encumbrance.'
If there is no change to the status of the 'directors' loans' why would written permission be necessary?
I'm trying to think back to the days when I used to deal with this sort of thing.
I'm thinking that if we took a 2nd charge (which I think Staprix have done), you had to give notice to the holder of the 1st charge(s).
So in this case Staprix should give notice to the ex-directors that they have taken a 2nd charge.
If the security needed to be relied upon the ex-directors would be paid before Staprix.
You couldn't give notice until the 2nd charge had actually been registered, so the notices should be received in due course.
Clause 9.1.3. places on obligation on the club, at Roland's pleasure, for the club to place a durable nameplate on assets over £100k indicating Staprix has "first fixed charge".
I think that might be news to the ex-directors, who as I understand it have a preceding first fixed charge over all the assets of all three companies. That's one presumption in the debenture I think would be challenged, and I don't think even a second charge could necessarily be achieved without the ex-directors' consent - maybe that depends on the wording of their debentures. I presume given previous discussions, but may be wrong, that they have that veto, in which case it's more than a matter of notification.
I'll need to read the 32 pages fully. But the ex-directors are listed as Permitted Encumbrancies, which to me means that it is legally documented, that they already hold a debenture.
Ok, I'm not sure whether this is sufficient or whether the the ex-directors should be issued with Deeds of Priority.
How does it work with regards to which company the debentures are secured against? They aren't both on the books of the same trading entity, but in the same group of companies?
Who would be responsible for the ex directors entitlements and legal rights at the point of sale the purchasers or the vendor? If neither notified or satisfied the ex directors who is liable?
The debentures are secured against Charlton Athletic Football Company Limited, because that is what ESI has bought.
I would say it is a moot point on who is responsible for the ex-directors loan as of today, because they are repayable if we reach the premier League and by then RD will/ should be long gone.
The reason I ask is that they "agreed to roll them over" for the last 2 take overs, didn't they? This time they haven't. Do they not need to be informed.
Who breaches the terms if they should have been informed and weren't?
The last thing we want, or need, is a legal issue delaying everything.
I agree it would seem a good idea for Southall and his lawyer to have a meeting with the ex-directors.
But shouldn't that have already happened?
It has.
Seems that there is no agreement as yet with three of the ex-directors
close the thread but start a new one for the deal forensic team - something like 'on my command, charge!!!! or 'to charge or not to charge', 'who's charge is it anyway' or 'what the charging ader does all this bollox mean' - i'm off to the rumours thread
There's no rumours on the Rumours thread, Doucher ...... only a few anxiety-ridden souls who seem to believe we're already almost relegated.
No rumours though. It's more fun on this thread.
shit, your right - killed 20 minutes or so though - its all a game of brinkmanship this window lark and i'm confident we will do what needs to be done to stay up even if its done very late
close the thread but start a new one for the deal forensic team - something like 'on my command, charge!!!! or 'to charge or not to charge', 'who's charge is it anyway' or 'what the charging ader does all this bollox mean' - i'm off to the rumours thread
The poor old takeover thread. It's had its final supper of Haddock and 3 lousy chips from the west stand kiosk washed down with a pint of strawberry milkshake. It's saying it's goodbyes to the other threads that have come and gone over the years. The chaplains on his way over.
But there has been a development. It's lawyers are waiting by the phone.
Obviously I understand everything but for the benefit of those not as intelligent as me, could someone kindly explain what exactly has happened / been confirmed today?
Its not 100% done
Explain it, in what sense?
It was never going to be 100% done until the later freehold purchases, which have been well discussed. What is new today?
The charge added to the football club today asks more questions than it answers.
How is it legally valid if it contradicts the exdirectors loans?
Of course this isn't a problem if they have been paid up, or given written permission, but @Airman Brown is saying he knows they haven't.
I'm no lawyer but the 'directors' loans' are singled out in the new charge agreement as a 'permitted encumbrance.'
If there is no change to the status of the 'directors' loans' why would written permission be necessary?
I'm trying to think back to the days when I used to deal with this sort of thing.
I'm thinking that if we took a 2nd charge (which I think Staprix have done), you had to give notice to the holder of the 1st charge(s).
So in this case Staprix should give notice to the ex-directors that they have taken a 2nd charge.
If the security needed to be relied upon the ex-directors would be paid before Staprix.
You couldn't give notice until the 2nd charge had actually been registered, so the notices should be received in due course.
Clause 9.1.3. places on obligation on the club, at Roland's pleasure, for the club to place a durable nameplate on assets over £100k indicating Staprix has "first fixed charge".
I think that might be news to the ex-directors, who as I understand it have a preceding first fixed charge over all the assets of all three companies. That's one presumption in the debenture I think would be challenged, and I don't think even a second charge could necessarily be achieved without the ex-directors' consent - maybe that depends on the wording of their debentures. I presume given previous discussions, but may be wrong, that they have that veto, in which case it's more than a matter of notification.
I'll need to read the 32 pages fully. But the ex-directors are listed as Permitted Encumbrancies, which to me means that it is legally documented, that they already hold a debenture.
Ok, I'm not sure whether this is sufficient or whether the the ex-directors should be issued with Deeds of Priority.
How does it work with regards to which company the debentures are secured against? They aren't both on the books of the same trading entity, but in the same group of companies?
Who would be responsible for the ex directors entitlements and legal rights at the point of sale the purchasers or the vendor? If neither notified or satisfied the ex directors who is liable?
The debentures are secured against Charlton Athletic Football Company Limited, because that is what ESI has bought.
I would say it is a moot point on who is responsible for the ex-directors loan as of today, because they are repayable if we reach the premier League and by then RD will/ should be long gone.
The reason I ask is that they "agreed to roll them over" for the last 2 take overs, didn't they? This time they haven't. Do they not need to be informed.
Who breaches the terms if they should have been informed and weren't?
The last thing we want, or need, is a legal issue delaying everything.
I agree it would seem a good idea for Southall and his lawyer to have a meeting with the ex-directors.
But shouldn't that have already happened?
It has.
Seems that there is no agreement as yet with three of the ex-directors
But it appears they didn't know/agree about the new charge.
Obviously I understand everything but for the benefit of those not as intelligent as me, could someone kindly explain what exactly has happened / been confirmed today?
Its not 100% done
Explain it, in what sense?
It was never going to be 100% done until the later freehold purchases, which have been well discussed. What is new today?
The charge added to the football club today asks more questions than it answers.
How is it legally valid if it contradicts the exdirectors loans?
Of course this isn't a problem if they have been paid up, or given written permission, but @Airman Brown is saying he knows they haven't.
I'm no lawyer but the 'directors' loans' are singled out in the new charge agreement as a 'permitted encumbrance.'
If there is no change to the status of the 'directors' loans' why would written permission be necessary?
'Permitted Encumbrance' is my new band name.
RD’s loan to CAFC was probably unsecured because he owned everything anyway.
ESI have bought the company CAFC with the existing lease and also the debt owed to Staprix The loan now needs to be secured with a charge over all the property leased to CAFC. Normally a lender will not allow any other creditor to have a separate charge on the same property ie an encumbrance to exercising the right to seize the mortgaged property in the event of default.
The charge simply says the secured Director loans, which are a potential encumberance are exempt from this condition. The terms of the Director loans would seem unaffected.
Thanks for this clarification @Dippenhall. One thing I don't really get is, if Duchatelet still owns the freehold to the Valley and Sparrows Lane, why does he need a charge over the assets? After all, he owns them.
Because ESI have also taken on the debt to Staprix and it would be unsecured without Staprix registering their debenture/charge.
@dippenhall what makes you think ESI have taken on the Starprix debt?
I would suggest that the debt or part debt is the agreed purchase price.
I can agree with that but which is it?
What link is there between the debt run up by Duchatelet and the price to be paid to Duchatelet, if any?
Is it evidenced or just a (reasonable) assumption?
And didn't Duchatelet advertise CAFC as being for sale for the princely sum of £1?
Obviously I understand everything but for the benefit of those not as intelligent as me, could someone kindly explain what exactly has happened / been confirmed today?
Its not 100% done
Explain it, in what sense?
It was never going to be 100% done until the later freehold purchases, which have been well discussed. What is new today?
The charge added to the football club today asks more questions than it answers.
How is it legally valid if it contradicts the exdirectors loans?
Of course this isn't a problem if they have been paid up, or given written permission, but @Airman Brown is saying he knows they haven't.
I'm no lawyer but the 'directors' loans' are singled out in the new charge agreement as a 'permitted encumbrance.'
If there is no change to the status of the 'directors' loans' why would written permission be necessary?
I'm trying to think back to the days when I used to deal with this sort of thing.
I'm thinking that if we took a 2nd charge (which I think Staprix have done), you had to give notice to the holder of the 1st charge(s).
So in this case Staprix should give notice to the ex-directors that they have taken a 2nd charge.
If the security needed to be relied upon the ex-directors would be paid before Staprix.
You couldn't give notice until the 2nd charge had actually been registered, so the notices should be received in due course.
Clause 9.1.3. places on obligation on the club, at Roland's pleasure, for the club to place a durable nameplate on assets over £100k indicating Staprix has "first fixed charge".
I think that might be news to the ex-directors, who as I understand it have a preceding first fixed charge over all the assets of all three companies. That's one presumption in the debenture I think would be challenged, and I don't think even a second charge could necessarily be achieved without the ex-directors' consent - maybe that depends on the wording of their debentures. I presume given previous discussions, but may be wrong, that they have that veto, in which case it's more than a matter of notification.
If the directors loan was not conditional on no further charges on assets without their consent their rights have not been affected. They are only affected in the event of default in repayment after promotion or insolvency.
It’s becoming clear why this sale was described as “complicated”. The details are of interest to some, but I don’t see why the existing debt arrangements and property structures continuing give rise fir concern given the strength of the covenant backing the club’s financials.
But the existing charges specifically state that there can be no new charges without their consent - or for that matter new leases. That must form part of the loan contract, surely, or what is the point of putting it in the filing?
It cannot be for a third party, in this case RD, to decide whether or not they are affected.
Obviously I understand everything but for the benefit of those not as intelligent as me, could someone kindly explain what exactly has happened / been confirmed today?
Its not 100% done
Explain it, in what sense?
It was never going to be 100% done until the later freehold purchases, which have been well discussed. What is new today?
The charge added to the football club today asks more questions than it answers.
How is it legally valid if it contradicts the exdirectors loans?
Of course this isn't a problem if they have been paid up, or given written permission, but @Airman Brown is saying he knows they haven't.
I'm no lawyer but the 'directors' loans' are singled out in the new charge agreement as a 'permitted encumbrance.'
If there is no change to the status of the 'directors' loans' why would written permission be necessary?
'Permitted Encumbrance' is my new band name.
RD’s loan to CAFC was probably unsecured because he owned everything anyway.
ESI have bought the company CAFC with the existing lease and also the debt owed to Staprix The loan now needs to be secured with a charge over all the property leased to CAFC. Normally a lender will not allow any other creditor to have a separate charge on the same property ie an encumbrance to exercising the right to seize the mortgaged property in the event of default.
The charge simply says the secured Director loans, which are a potential encumberance are exempt from this condition. The terms of the Director loans would seem unaffected.
Thanks for this clarification @Dippenhall. One thing I don't really get is, if Duchatelet still owns the freehold to the Valley and Sparrows Lane, why does he need a charge over the assets? After all, he owns them.
Because ESI have also taken on the debt to Staprix and it would be unsecured without Staprix registering their debenture/charge.
@dippenhall what makes you think ESI have taken on the Starprix debt?
The debt is owed by CAFC to Staprix, so buying CAFC, all things being equal, includes taking over the company's debt.
The filing at Companies House confirms there is a debt owed by CAFC towards Staprix which is now covered by a charge on the club's assets leased to CAFC with an un-named third party guarantor. I did assume originally that the debt would already have been repaid from the cash raised by the equity issue. It may that cash is sitting with CAFC to cover part or all of the debt with repayment of the debt, being part of the acquisition deal. This will result in RD relinquishing control of Holdings with ESI acquiring Holdings and its freehold interests.
If all this had needed to be sorted out before acquiring the club we would still be under RD's control of finances ad feeling the full toxic effect. As it is, ESI has acquired control of the club, albeit as leaseholder, but I assume, with a deferred buy out of Holdings when the legalities are processed resulting in automatic acquisition of the freehold interests.
The potential negative of CAFC being the leaseholder if it were a long term arrangement, is that CAFC would need the agreement of the freeholder, Holdings, if any significant changes are made to the stadium or training ground as it might require a variation of the terms of the lease. So the current arrangements we must believe are only be temporary and caused by the need to improve the squad in the January window and acquire initially only control of the club's affairs. It means RD will not relinquish control of Holdings until the debt is repaid and this is the bulk of the purchase price yet to be paid. There may be a fixed date for repayment and as there is a guarantor mentioned in the charge, RD is not taking any risk if this is a wealthy middle eastern sheik.
I’m assuming that the lawyers are not going to be unaware of the terms of the existing charges and have decided to ignore their provisions on the basis that the most they can cost is £7m in a hypothetical insolvency in which any of them come into play.
There is still the issue that the ex-directors were told one thing and are now hearing second hand a contradictory account from ESI. There may be a calculation going on that they won’t sue so can be ignored?
Comments
Assume the directors did not acquire any right to approve further charge on the assets. Remember the main debt at the time was a bank loan and that would presumably have prevented further charges on the assets. Not ITK simply trying to see a logical explanation.
I would say it is a moot point on who is responsible for the ex-directors loan as of today, because they are repayable if we reach the premier League and by then RD will/ should be long gone.
Sorry for the next poor taste but it seems the administrators are threatening to turn this off and family members still feel there are signs of life.
The next 4 hours could be crucial.
What link is there between the debt run up by Duchatelet and the price to be paid to Duchatelet, if any?
Is it evidenced or just a (reasonable) assumption?
It’s becoming clear why this sale was described as “complicated”. The details are of interest to some, but I don’t see why the existing debt arrangements and property structures continuing give rise fir concern given the strength of the covenant backing the club’s financials.
Who breaches the terms if they should have been informed and weren't?
The last thing we want, or need, is a legal issue delaying everything.
No rumours though. It's more fun on this thread.
Seems that there is no agreement as yet with three of the ex-directors
It's had its final supper of Haddock and 3 lousy chips from the west stand kiosk washed down with a pint of strawberry milkshake.
It's saying it's goodbyes to the other threads that have come and gone over the years.
The chaplains on his way over.
But there has been a development. It's lawyers are waiting by the phone.
Will sheriff AFKA grant a stay of execution?
It cannot be for a third party, in this case RD, to decide whether or not they are affected.
The filing at Companies House confirms there is a debt owed by CAFC towards Staprix which is now covered by a charge on the club's assets leased to CAFC with an un-named third party guarantor. I did assume originally that the debt would already have been repaid from the cash raised by the equity issue. It may that cash is sitting with CAFC to cover part or all of the debt with repayment of the debt, being part of the acquisition deal. This will result in RD relinquishing control of Holdings with ESI acquiring Holdings and its freehold interests.
If all this had needed to be sorted out before acquiring the club we would still be under RD's control of finances ad feeling the full toxic effect. As it is, ESI has acquired control of the club, albeit as leaseholder, but I assume, with a deferred buy out of Holdings when the legalities are processed resulting in automatic acquisition of the freehold interests.
The potential negative of CAFC being the leaseholder if it were a long term arrangement, is that CAFC would need the agreement of the freeholder, Holdings, if any significant changes are made to the stadium or training ground as it might require a variation of the terms of the lease. So the current arrangements we must believe are only be temporary and caused by the need to improve the squad in the January window and acquire initially only control of the club's affairs. It means RD will not relinquish control of Holdings until the debt is repaid and this is the bulk of the purchase price yet to be paid. There may be a fixed date for repayment and as there is a guarantor mentioned in the charge, RD is not taking any risk if this is a wealthy middle eastern sheik.
Glad all over
Well
There is still the issue that the ex-directors were told one thing and are now hearing second hand a contradictory account from ESI. There may be a calculation going on that they won’t sue so can be ignored?