At what point is Brenda obliged to give up on the PB?

[storming]

Okay Sorry, I got it wrong. The process is broken down a little more here http://www.inhouselawyer.co.uk/index.ph ... our-rights

The administrator must initially perform their functions with a view to achieving the first tier, which is to rescue the company as a going concern. Potential purchasers are often unwilling to buy the shares of a company in administration as this would involve them taking on the liabilities of the insolvent company. Consequently, in practice, this first limb is rarely achieved.

If it is not reasonably practicable to achieve the first limb, an administrator may perform their functions with a view to achieving the second purpose. That is, to get a better result for the company’s creditors as a whole than would be likely were the company being wound up without there being an administration first. This limb can often be achieved by the administrator selling the business as a going concern, where a higher purchase price is paid than if the assets were sold on a break-up basis, which often happens in a liquidation scenario.

BG is on the second purpose.

 

[oggyale]

Grovehill

I think you are ignoring one issue here.

Which is not the stated will of the PB to deliver the "better deal".

But rather their ability to complete.

It's been known for a long time that there are conditions attached to the PB deal. Clarity on planning permission, and/or FL approval come to mind.
Clearly, something else needs to happen before they/he can write out the cheque. Commitment and cash from say, a cinema development company is my best bet.

It is by no means clear that the PB is currently in a position to complete. It's pretty clear that the £5m-odd needed to do so is yet to be lodged in an escrow account with their solicitors.

We are less than 2 weeks from the start of the season.


The club even now, is running at a cost of somewhere in the region of £300k a month.

There needs to be a credible and funded contingency plan. Ready to move, fast.

Otherwise the discussions here could well be about a club that no longer exists. Sooner than you think.

Won't the money be paid to the club via the escrow account once the FL have said yes. Why pay the money to the club beforehand when the PB does not know what the FL will decide on.

As for planning permission,that can be dealt with once the FL have given the yes nod,surely....

If (i) were to be the case,then Ridsdale could get on with his job,and the PB could get on with theirs.....

 

[Quintrell Green]

I think Oggy has confusion between timing and being able to pay in the first/last place. Without the latter, the former becomes superfluous.

 

[grovehill]

Grovehill

I think you are ignoring one issue here.

Which is not the stated will of the PB to deliver the "better deal".

But rather their ability to complete.

It's been known for a long time that there are conditions attached to the PB deal. Clarity on planning permission, and/or FL approval come to mind.

Clearly, something else needs to happen before they/he can write out the cheque. Commitment and cash from say, a cinema development company is my best bet.

It is by no means clear that the PB is currently in a position to complete. It's pretty clear that the £5m-odd needed to do so is yet to
be lodged in an escrow account with their solicitors.

We are less than 2 weeks from the start of the season.

The club even now, is running at a cost of somewhere in the region of £300k a month.

There needs to be a credible and funded contingency plan. Ready to move, fast.

Otherwise the discussions here could well be about a club that no longer exists. Sooner than you think.

I agree with you, I think the PB is waiting for something to happen (either FL approval or an indication from the planners) that will him to get the finances in place.

If that doesn't happen, I think there's too much about Plan B that needs to be sorted before it can be put in place. Chiefly Council funding and Secured Creditors agreements to accept the price that the Council may be willing to pay. My personal view is that these two figures will be so far apart there'll be no chance of a compromise being reached.


Where I disagree with the Plan B'ers is in the timescale needed for another bid to be accepted by Guilfoyle.

On your own estimate of current loses, as long as there are 10,000-12,000 people coming through the turnstyles each month, the club can limp on while a properly funded bid is prepared. If a couple of high earners have to be sold of at bargain prices as well, that's a fair price to pay in order to get the right deal rather than just accepting the first offer that comes along. I believe Guilfoyle, Lombard and Mastpoint would see it that way as well.

 

[Tim Chown]

It's been known for a long time that there are conditions attached to the PB deal. Clarity on planning permission, and/or FL approval come to mind.

....

There needs to be a credible and funded contingency plan. Ready to move, fast.

I have been quite vocal in encouraging a credible Plan B to be put forward. The publicised meetings are of course great to see, but as yet there's been no statement from the Plan B crew that all their conditions are met and they could sign a deal quickly. That's what needs to happen, and as soon as such a statement can be made, the sooner Brenda will have his out.

But right now both bidders have conditions outstanding that would appear to make them not ready to move, which is obviously a significant cause for concern.

 

[Anonymous]

In the next ten working days for the Sale and Purchase Agreement with Bishop International Ltd and PAFC (125) Ltd has to be completed. The judgement for the Joint Venture partners of BIL is whether the risk of investing of £5m+ together with underwriting the losses of PAFC (125) Ltd is worthwhile in an uncertain economic climate.

They would have to be absolutely certain that they can accommodate all their proposed development within the confines of the land that they will own as they cannot rely on the acquisition of any additional Council land, not even for any necessary junction improvements on Outland Road. There are no promises on any planning permission being forthcoming. They would also have to be certain, to the extent that they have a legally binding agreement in place, that Cineworld, the prospective multiplex operator, will wish to occupy the site as opposed to any other site that may become available in the City. All this and then they will have to wait 2-3 years for any development profits to flow back into the company (after paying the Council additional receipts as a result of the 50% uplift clause in the covenants of course!). Is the development deal such an opportunity that it is better than any other available property deal in the UK or is it just a clever way of recovering losses for exposed former Directors?

Any UK bank faced with the obvious risk associated with the proposal would quietly pass on it and that would be before they assessed the financial track record of the main proponent of the scheme. With one of the main backers disappearing at a time that coincided with the due payment of the next milestone payment as part of the original £1m exclusivity it is no wonder that doubts about the financial ability of BIL to complete the Sale and Purchase Agreement persist. No doubt this will intensify as more detail about Kevin Heaney's financial wellbeing are published tomorrow.

So there are just ten working days to provide the cash (as opposed to the promise of cash); legally agree payment to all the secured creditors (including Lombard, owned by RBS, who just happened to be the bank at the wrong end of the Cornish Homes liquidation); agree the level of payment to the football creditors (the staff and the players through the PFA); and finally comply with all the rules and regulation requirements of the Football League, particularly in respect of revealing the names associated with BIL at a time when Dispatches has highlighted the unacceptability of off shore companies purchasing football clubs. Despite all of the above some doubters continue to wonder why a Rescue Plan might be necessary.

It is perhaps no coincidence that a few short days after protesting that TINA was the only game in town Brendan Guilfoyle has recognised that this may not be the case after all and as a result furnished the up to date financial information to both James Brent and the Council. The astutely timed statement that the Council are prepared "..to support the rescue of the club and explore any options that are developed" and that they would "rule nothing in or out at this stage" is also significant.

So can the Rescue Plan be implemented quickly? The proof of cash funds is no problem; there should be no problems with the Football League in terms of structure or the identity of the purchaser; agreements with secured creditors were at an advanced stage prior to the choice of the PBs in May and could be quickly reconstructed and the across party support of the Council for the Rescue Plan is most welcome and constructive and may be needed. All of the above is enough for the administrator to continue trading through August (particularly with the additional income of four home matches) whilst the Rescue Plan is legally and finacially constructed. There may be unanticipated obstacles and difficulties but with a collective will and determination these can be overcome. I have talked about twists and turns before but should a Rescue Plan be necessary the aim, this time, should be straight at the finish line.

 

[monkeywrench]

Graham, I read every one of your posts with extreme interest, and this one beautifully sums up the position. Many thanks for the clarity that your posts continually provide.

When you mentioned twists and turns all those months ago, did you ever imagine there'd be so many?????

 

[Rupert]

No doubt this will intensify as more detail about Kevin Heaney's financial wellbeing are published tomorrow.

See Monday's Herald (assuming that's what Graham is referring to).

 

[Captains Log]

The PB either will or they won't complete - all the rest is guff.

We clearly need the rescue plan if Brendan has made a misjudgement but it does the architects of the rescue little credit to show them almost willing Plan A to fail.

 

[sharkbait]

The PB either will or they won't complete - all the rest is guff.

We clearly need the rescue plan if Brendan has made a misjudgement but it does the architects of the rescue little credit to show them almost willing Plan A to fail.

Maybe they are just fans that want the best for the club.

 

[Sue Pollard]

Thank you for your post Graham.

You have given us a very clear and concise 'up to date' analysis of the situation and it's much appreciated.

Not always easy to follow everything that has been going on / what keeps being uncovered and so on!

 

[Captains Log]

Reading my previous post back it sounds like I am criticising the rescue planners, let me assure you that is far from the case.
I have great admiration for those that have put their club first and have given their time and cash to support the staff and to put together a rescue attempt should Plan A fail.
It has been truly inspirational to see the way ordinary people have joined together to defend something which means a lot to them and I am in awe of the amount of time and effort put in by the Trust, the Green Taveners and all their supporters.
However ... In my view those people banking that the rescue plan would be better for the club than Plan A are making a similarly risky gamble to the one that Keith Todd made when irresponsibly gambling the clubs future bidding for the world cup.
The sensible path for the club to secure our future is with a fully funded takeover. I personally have no love for the way the PB have conducted themselves but the fact remains that their offer was the best on the table.
I do really hope that Mr. H. & Co. do manage to complete and we can all get back to being just football supporters.
If for any reason they fail to complete I will be 100% behind the rescue bid.

 

[jimbo_the_green]

Many ifs ahead it seems but...

IF plan A fails... it seems there may be a few weeks of trading within administration whilst the finer details are hammered out with the rescue plan. Gate receipts are uncertain and season ticket money is apparently ringfenced in this scenario which doesn't leave much to run on without asking the staff etc to take another hit. Are there any funding ideas on the agenda for such a situation should the need arise and should these maybe be kicked in now rather than in two weeks time?

Pasoti has proved itself a willing and generous bunch in the face of adversity. We've collected for many worthy causes of late. Maybe there should be an early look ahead to what might be needed if the back up plan is called upon?

I for one would contribute to an emergency funding collection through the trust / gt's with a view to, if in the event (however likely or not, I genuinely don't know) that the current PB's stump up and carry on witht their plans, it passes to a residual cause such as a staff payment perhaps ( a bonus for loyalty and hard work put in after settlement from the PBs of course). But if backup plan b is suddenly needed there would be a war chest to perhaps ensure the staff get their money / the electricity gets paid etc whilst the deal goes through the final motions?

I anticipate from what I've read so far that Mr Brent would not drag out in the same way that the PBs have in their negotiations but at the same time cash will be required to fund the short interim period which could be supplemented to ensure no further hardship is endured by the staff. Maybe he would be different in his approach and seek to inject funds where the PBs haven't to cover this period? If so, if the staff got an additional payment as a result of our collection I wouldn't begrudge it.

Maybe what's collected in the existing structure with the donate button etc is enough in itself, I don't know, but there are many vocal backers of this plan and it seems to me that plenty could be raised if the rallying call is right and correctly structured.

 

[storming]

Good post Graham. Thanks.

There is the additional problem that Heaney wants to buy back the club in the future. http://www.thisisdevon.co.uk/Argyle-dea ... story.html

They are understood to be seeking to comply with the regulations by altering a clause that would have offered the consortium the chance to buy Argyle back from Mr Ridsdale. Mr Heaney's joint venture partners would cover the club's predicted £1million-plus shortfall for this season in a bid to avoid financially involving the Cornish Properties boss.

The League are unhappy about this, because of the dual-ownership problem. I'm sure he doesn't need the buy-back clause to be legally-binding. If only he would just trust PR to sell it back to him for £1.

 

[grovehill]

As usual a good post Graham, but can you explain the following:


"In the next ten working days for the Sale and Purchase Agreement with Bishop International Ltd and PAFC (125) Ltd has to be completed"


Who has set this deadline and why? I can't believe that it's the Administrators or the FL, both of whom allowed Crystal Palace to kick off last season's fixtures while still in Administration, so where's the deadline coming from?