Fascinating stuff from you chaps in clearing the mud from the water. The big picture and future of the club is of course of paramount importance but the short term effect of delay in ownership change on the team and our immediate league status hangs over everything like a pall of smoke. I hope things can be concluded for many reasons but getting done in time to give SCP a fighting chance would be nice.
I've made a point on not commenting on this, or any other, takeover thread as I'm not ITK or purport to know anything more than anyone else but the last post by Mundell is very interesting and to my mind is why there seems to be differences in the sale values being floated around in the press & on here.
I still think that RM has CAFC best interests at heart and reading the DD report above makes that quite clear. To my mind when RM handed the Baton over (geddit) to TJ/MS then he agreed not to take any money until we got promotion, thus giving them some leeway to invest into the club & IF they achieved promotion then they could afford to repay him (plus the other directors).........BUT he also thought to cover his back for this exact scenario - that if they didn't achieve their goal & decide to sell up then he would be able to recoup his money as he would have no real control over who they were selling out to & what that may lead to.
Thus, when TJ says that the selling price is, say £20 M, he is not factoring in the fact that RM (+ others ) MAY want to activate the clause and get their collective £8m and so the real price is nearer £30m. So, having agreed a price, done DD, Harris or whoever suddenly find that they MAY have to fork out more than they had bargained for.
IF this is the case then this would explain why things seem to fall down / stall after DD............or have I got it all wrong ?
What I find amazing is that Jimmy Floyd Hassenbacker lives in Surrey, even though he manages Royal Antwerp.........strange..........mind you, bugger all to do with this thread.......or is it ;-)?
This may be a daft question but why don't TJ /MS be upfront and clear about the current structure of the debt (or whatever the problem is) in the first place ?
Particularly, if this is the thing that is causing prospective owners to think twice further down the line and made some prospective owners reconsider.
This may be a daft question but why don't TJ /MS be upfront and clear about the current structure of the debt (or whatever the problem is) in the first place ?
Particularly, if this is the thing that is causing prospective owners to think twice further down the line and made some prospective owners reconsider.
Isn't this factored into the price already ?
If they come clean about the situation, then the buyer would say you can pay that debt out the the money I'm giving you for the club. TJ / MS would be left with FA.
Another thing is that I understand that wealthy companies and individuals don't get that way by being careless with their money, (and in saying this and not being a millionaire myself, and understanding that a million is a lot of money), in the scheme of things is the debt that significant given the potential money that is made from the premiership ?
If the money gained from promotion is carefully managed, would not the remaining debt be able to be sorted out ? I understand that may not result in a glorious first season back, but the club would be stronger to push on, much in the same way when we relegated in the premiership previously under Curbs and came back much stronger the next season.
The club keeping its head and not going crazy financially when in the premiership and building sustainably, ensuring the club gets Category A status for our youth and training set up, and keeps the wage bill under control.
If I knew the club was being managed well, and the owners communicated a clear plan, I would support that strongly. As a Charlton fan, I am used to the occasional set back and would be very happy for stability of the club and some sensible management. Maybe it is just a New Year's dream.
This may be a daft question but why don't TJ /MS be upfront and clear about the current structure of the debt (or whatever the problem is) in the first place ?
Particularly, if this is the thing that is causing prospective owners to think twice further down the line and made some prospective owners reconsider.
Isn't this factored into the price already ?
The way I see it there's a 'headline' price and a 'final' price and as a seller you want to get somebody to take the bait first of all. For sure the former directors loans and the bank borrowings will not be something that can be resolved at the drop of a hat. We can but hope for as speedy a resolution as possible in the best interests of the club.
This may be a daft question but why don't TJ /MS be upfront and clear about the current structure of the debt (or whatever the problem is) in the first place ?
Particularly, if this is the thing that is causing prospective owners to think twice further down the line and made some prospective owners reconsider.
Isn't this factored into the price already ?
I'd be surprised if the structure of the Club's debt isn't clear to potential buyers. Hence, I doubt the issue is a last minute increase in the effective price, i.e. as you suggest, from the buyer's perspective it's all factored in. The issue is more likely to be around how the various creditors share the spoils.
Let's imagine that either a given cash payment or, alternatively, a combination of cash upfront with a deferred payment contingent on promotion is on offer to all creditors, but that this does not cover all current liabilities.
The issue then for all creditors is how to share out what's available and/or to agree who waits for their money. If that's what's going on then it's not hard to imagine one or two people deciding to play hard ball.
At the same time, I can imagine Cash arguing that the former Director's loans would have been toast without his money so why should they be senior to his loans or even rank pari passu?
If you were a buyer you might then say, "OK Guys, sort it out amongst yourselves and let me know when you're ready to talk. I don't have time for this crap."
Just speculation obviously. It might all be under control for all we know!!
Or simply, in the case of Harris, wait till the club go into receivership and get it for peanuts! Yes we'd get 10 points and end up in L1, but under their reasoning (and seeing that the majority of the squad has their contracts up end of this season) it'd be best to start fresh once again and power back up the leagues with player swooping a la Watford... Not good for us fans but that's probably a scenario that is in their minds being the businessmen that they are.
It's my understanding that the former directors are below the banks but above the current owners in a single creditor agreement that determines the hierarchy of debt.
So they would get something if the club went bust as the residual assets are worth more than the bank debt. You might well ask how Slater and co ever signed up to that, but there you go!
It's a fair point that the HSBC debt is an overdraft not strictly a loan, although the situation is confused by references to bank loans (plural) in the documents I've seen (accounts and due diligence).
Finally, I don't think there will be any question of Murray being the problem. Hope that helps.
Thanks Mundell, and to Red Chaser and Guinness for the explanation. That makes it a bit clearer.
Its for the creditors to sort it out or lose the lot on administration. If this is the case, why don't they all accept an equal proportion or pay back etc ? This may be a ridiculously simple. There is likely to be a lot of personalities involved, but given the situation where they may end up with nothing, isn't it in the creditors interest to come to some kind of arrangement ?
If the club can get to the premiership they can then have a chance to get their money back, whereas as it stands there is no chance.
I understand that I am looking at complex financial arrangements in a ridiculously simplified manner, but am trying to make sense of it.
What I find amazing is that Jimmy Floyd Hassenbacker lives in Surrey, even though he manages Royal Antwerp.........strange..........mind you, bugger all to do with this thread.......or is it ;-)?
Probably doesn't take much more that an hour in a private helicopter chinook.
Thanks AB, I posted before seeing your explanation of your understanding of the debt hierarchy. Could the problem be, certain parties trying to reorder the hierarchy of the debt (and the existing parties resisting) ?
If this is the case, it is understandable that prospective owners may choose to take a step back.
Lets hope sanity / reasonable accommodation and not administration prevails. I hope some of the decent looking owners such as Josh Harris can step back in. The club can move on and everyone gets a chance of getting some / most of their money back.
It's my understanding that the former directors are below the banks but above the current owners in a single creditor agreement that determines the hierarchy of debt.
So they would get something if the club went bust as the residual assets are worth more than the bank debt. You might well ask how Slater and co ever signed up to that, but there you go!
It's a fair point that the HSBC debt is an overdraft not strictly a loan, although the situation is confused by references to bank loans (plural) in the documents I've seen.
Finally, I don't think there will be any question of Murray being the problem. Hope that helps.
Thanks, that does help. As you suggest, it appears that Slater and Co. have really screwed up. Maybe they were so confident of winnng promotion to the Premier League they never imagined having to sell in the Championship!!
As an aside, it may be that the reference to bank loans (plural) reflects the fact that the RBS Mortgage is tranched with different repayment dates and interest payments?
It's my understanding that the former directors are below the banks but above the current owners in a single creditor agreement that determines the hierarchy of debt.
So they would get something if the club went bust as the residual assets are worth more than the bank debt. You might well ask how Slater and co ever signed up to that, but there you go!
It's a fair point that the HSBC debt is an overdraft not strictly a loan, although the situation is confused by references to bank loans (plural) in the documents I've seen.
Finally, I don't think there will be any question of Murray being the problem. Hope that helps.
As an aside, it may be that the reference to bank loans (plural) reflects the fact that the RBS Mortgage is tranched with different repayment dates and interest payments?
Quite possibly.
It's very odd that the former directors have a potential financial interest in the club becoming insolvent as it stands, although I am quite clear that they would take a broader view.
The other thing is that even if all the external creditors agree to roll over their loans on the same basis, a new owner is dumped at the bottom of the hierarchy. Alternatively, it means the ex directors have to forfeit their current priority, which they may not accept.
Without expressing a desire one way or the other I can see why MS, TJ and Cash would think that the money they've invested/spent/lost/wasted should be paid back before the old Directors' loans.
Just to play Devil's Advocate the old Directors did 'lose' their money while getting the club relegated from the Premier League to the third division where as MS/TJ/Cash have run up debts while getting promoted from the third division to the second division.
If I were Kevin Cash I would believe that I was entitled to all of my money before the old Directors were repaid the money that Dowie and Pardew, literally, spunked up the wall on overpaid, underperforming players - especially as I believe that the player acquisitions have been much, much more successful since 2010.
Without expressing a desire one way or the other I can see why MS, TJ and Cash would think that the money they've invested/spent/lost/wasted should be paid back before the old Directors' loans.
Just to play Devil's Advocate the old Directors did 'lose' their money while getting the club relegated from the Premier League to the third division where as MS/TJ/Cash have run up debts while getting promoted from the third division to the second division.
If I were Kevin Cash I would believe that I was entitled to all of my money before the old Directors were repaid the money that Dowie and Pardew, literally, spunked up the wall on overpaid, underperforming players - especially as I believe that the player acquisitions have been much, much more successful since 2010.
I agree, but according to Airman that is not what they signed up to originally - which either makes RM & co very clever or Cash/TJ/MS very stupid !!!
Thanks AB. The hierarchy makes sense, with the bank first and "friendly" creditors behind. I can't remember seeing anywhere what the ultimate repayment date is for the bank for the mortgage. Is it interest only, amortising or due to amortise at some stage during the term?
I suspect that the position was relatively attractive for TJ/MS/KC if you look at it in terms of low level repayments - in terms of interest & no capital repayments until Premiership - which would give buyers who may not be flush, time to get where they needed to to become profitable and allow them to get out with a premium.
Anyone new coming in has to believe they can achieve that Prem place, which means decent investment in the first team and squad, or they need to be of such financial strength that it wouldn't matter to them. Even if the latter were possible, you'd have to think that owner would also invest to get to the Prem anyway.
Right...have to actually work now...hopefully I can tune in later for news of 3 points and a couple of hundred more posts on here! ;-)
I can't remember seeing anywhere what the ultimate repayment date is for the bank for the mortgage. Is it interest only, amortising or due to amortise at some stage during the term?
Comments
I still think that RM has CAFC best interests at heart and reading the DD report above makes that quite clear. To my mind when RM handed the Baton over (geddit) to TJ/MS then he agreed not to take any money until we got promotion, thus giving them some leeway to invest into the club & IF they achieved promotion then they could afford to repay him (plus the other directors).........BUT he also thought to cover his back for this exact scenario - that if they didn't achieve their goal & decide to sell up then he would be able to recoup his money as he would have no real control over who they were selling out to & what that may lead to.
Thus, when TJ says that the selling price is, say £20 M, he is not factoring in the fact that RM (+ others ) MAY want to activate the clause and get their collective £8m and so the real price is nearer £30m. So, having agreed a price, done DD, Harris or whoever suddenly find that they MAY have to fork out more than they had bargained for.
IF this is the case then this would explain why things seem to fall down / stall after DD............or have I got it all wrong ?
Particularly, if this is the thing that is causing prospective owners to think twice further down the line and made some prospective owners reconsider.
Isn't this factored into the price already ?
If the money gained from promotion is carefully managed, would not the remaining debt be able to be sorted out ? I understand that may not result in a glorious first season back, but the club would be stronger to push on, much in the same way when we relegated in the premiership previously under Curbs and came back much stronger the next season.
The club keeping its head and not going crazy financially when in the premiership and building sustainably, ensuring the club gets Category A status for our youth and training set up, and keeps the wage bill under control.
If I knew the club was being managed well, and the owners communicated a clear plan, I would support that strongly. As a Charlton fan, I am used to the occasional set back and would be very happy for stability of the club and some sensible management. Maybe it is just a New Year's dream.
Let's imagine that either a given cash payment or, alternatively, a combination of cash upfront with a deferred payment contingent on promotion is on offer to all creditors, but that this does not cover all current liabilities.
The issue then for all creditors is how to share out what's available and/or to agree who waits for their money. If that's what's going on then it's not hard to imagine one or two people deciding to play hard ball.
At the same time, I can imagine Cash arguing that the former Director's loans would have been toast without his money so why should they be senior to his loans or even rank pari passu?
If you were a buyer you might then say, "OK Guys, sort it out amongst yourselves and let me know when you're ready to talk. I don't have time for this crap."
Just speculation obviously. It might all be under control for all we know!!
Not good for us fans but that's probably a scenario that is in their minds being the businessmen that they are.
So they would get something if the club went bust as the residual assets are worth more than the bank debt. You might well ask how Slater and co ever signed up to that, but there you go!
It's a fair point that the HSBC debt is an overdraft not strictly a loan, although the situation is confused by references to bank loans (plural) in the documents I've seen (accounts and due diligence).
Finally, I don't think there will be any question of Murray being the problem. Hope that helps.
Its for the creditors to sort it out or lose the lot on administration. If this is the case, why don't they all accept an equal proportion or pay back etc ? This may be a ridiculously simple. There is likely to be a lot of personalities involved, but given the situation where they may end up with nothing, isn't it in the creditors interest to come to some kind of arrangement ?
If the club can get to the premiership they can then have a chance to get their money back, whereas as it stands there is no chance.
I understand that I am looking at complex financial arrangements in a ridiculously simplified manner, but am trying to make sense of it.
helicopterchinook.If this is the case, it is understandable that prospective owners may choose to take a step back.
Lets hope sanity / reasonable accommodation and not administration prevails. I hope some of the decent looking owners such as Josh Harris can step back in. The club can move on and everyone gets a chance of getting some / most of their money back.
As an aside, it may be that the reference to bank loans (plural) reflects the fact that the RBS Mortgage is tranched with different repayment dates and interest payments?
It's very odd that the former directors have a potential financial interest in the club becoming insolvent as it stands, although I am quite clear that they would take a broader view.
The other thing is that even if all the external creditors agree to roll over their loans on the same basis, a new owner is dumped at the bottom of the hierarchy. Alternatively, it means the ex directors have to forfeit their current priority, which they may not accept.
Just to play Devil's Advocate the old Directors did 'lose' their money while getting the club relegated from the Premier League to the third division where as MS/TJ/Cash have run up debts while getting promoted from the third division to the second division.
If I were Kevin Cash I would believe that I was entitled to all of my money before the old Directors were repaid the money that Dowie and Pardew, literally, spunked up the wall on overpaid, underperforming players - especially as I believe that the player acquisitions have been much, much more successful since 2010.
I suspect that the position was relatively attractive for TJ/MS/KC if you look at it in terms of low level repayments - in terms of interest & no capital repayments until Premiership - which would give buyers who may not be flush, time to get where they needed to to become profitable and allow them to get out with a premium.
Anyone new coming in has to believe they can achieve that Prem place, which means decent investment in the first team and squad, or they need to be of such financial strength that it wouldn't matter to them. Even if the latter were possible, you'd have to think that owner would also invest to get to the Prem anyway.
Right...have to actually work now...hopefully I can tune in later for news of 3 points and a couple of hundred more posts on here! ;-)