The Takeover Thread - Duchatelet Finally Sells (Jan 2020)

rikofold said:

Covered End said:

LenGlover said:

Cafc43v3r said:

AFKABartram said:

Cafc43v3r said:

AFKABartram said:

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. 

Cafc43v3r said:

Covered End said:

Cafc43v3r said:

Covered End said:

rikofold said:

Covered End said:

LenGlover said:

Cafc43v3r said:

AFKABartram said:

Cafc43v3r said:

AFKABartram said:

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. 

Covered End said:

Cafc43v3r said:

Covered End said:

Cafc43v3r said:

Covered End said:

rikofold said:

Covered End said:

LenGlover said:

Cafc43v3r said:

AFKABartram said:

Cafc43v3r said:

AFKABartram said:

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.

DOUCHER said:

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   

Henry Irving said:

Cafc43v3r said:

Covered End said:

Cafc43v3r said:

Covered End said:

Cafc43v3r said:

Covered End said:

rikofold said:

Covered End said:

LenGlover said:

Cafc43v3r said:

AFKABartram said:

Cafc43v3r said:

AFKABartram said:

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

Dippenhall said:

rikofold said:

Covered End said:

LenGlover said:

Cafc43v3r said:

AFKABartram said:

Cafc43v3r said:

AFKABartram said:

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.

addick19 said:

blackpool72 said:

My head hurts 

My eyes are glazing over.

At the risk of alienating "he who must be obeyed" by re booting this thread I did pose the thought after Weegies' excellent interview just how many layers do we have to peel back?

Indeed I was not going to post on the topic of ownership of The Valley and Sparrows Lane because of the content of her interview.

The key message was the completion of the purchase is scheduled for the summer.

IF YOU ARE HAPPY WITH THAT STATEMENT YOU NEED READ NO FURTHER

Otherwise this is going to be painful.

Firstly much as I appreciate the comments on another thread regarding certain responses to certain tweets on ownership of The Valley I regret to inform you the terms and conditions of the deal and all related matters are governed by the confidentiality of the non disclosure included with sales/purchase agreement between ESI and Staprix NV.

The sales/ purchase agreement we are advised remains active.

Thus, no matter what party purports to be involved, formal or informal, they are governed by the above. I will return to this later.

Thus even after the Supporters Meeting there was never likely to be enough detail to form an accurate opinion.

The development today details the debenture registered against ESI to reflect a liability to Staprix NV.

As with the rest of the nature of the deal we have no knowledge of what such liability might represent.

Thus the following is purely speculative

The concerns expressed were/ are over:
- the long term tenure of the club at The Valley and Sparrows Lane
- the impact of the liens held by the ex directors debentures

ESI stated they had bought Charlton Athletic Football Club.

With the associated corporate acquisition comes the leasehold to The Valley. There is no indication there is a new lease.

They can legitimately argue with such leasehold they have ownership of The Valley.

As at the 31st December 2019 Charlton Athletic Football Club Limited had leasehold ownership of The Valley granted by Charlton Athletic Holdings Limited.

The EFL ratified their approval of ESI on 2 January 2020.

As at the 3rd January 2020 Charlton Athletic Football Club Limited had leasehold ownership of The Valley granted by Charlton Athletic Holdings Limited.

ESI by buying the club has taken over the lease created when Mr Murray formed the new corporate structure under Baton 2010 Ltd.

The very schedule of the debentures evidenced today confirms the ownerships of such leases.

In such terms, the legal position of the tenure of Charlton Athletic Football Club Limited has not changed.

Under the corporate structure created by Mr Murray the freeholds to such leaseholds belong to Charlton Athletic Holdings Limited.

What are the terms and conditions of the leaseholds? I have not a clue.

As the lessee and the lessor were (and we are assured will return) under common ownership they have probably not ever received the attention they deserved.

At the point of their creation Charlton Athletic Football Club Limited and Charlton Athletic Holdings Limited were both owned by Baton 2010 Ltd.

Thus the leaseholds granted by Charlton Athletic Holdings Limited represents part of the freehold and leasehold assets of Baton 2010 Ltd. They are evidenced (with value) within the Baton 2010 Ltd first published accounts.

It is here where the Airman questions arise.

The assets of Baton 2010 Limited are subject to debentures to multiple ex directors.

Airman queries how can any assets therefore be transferred out of the ownership of Baton 2010 Limited without ex director prior approval.

Unless there a legal agreement and/or mechanism and or definition I am not aware of logically they cannot.

However here is where we move into the international positioning of contract law.

Airman has commented on several occasions about M. Duchatelet's (MD) disregard of the ex directors liens. We have even seen suggestions he almost totally disregarded their existence at the time of completing Staprix NV due diligence.

I spent 29yrs with High Street Bank legal documentation. Much of it was standard tried and tested forms of charge over sundry assets. It was deemed water tight security. Of course when push comes to shove it is both an inefficient way and costly way to get your money back in the event of default.

For the last 15yrs I was sat with the banks corporate lawyers as they constructed a multitude of bespoke legal agreements to facilitate a working agreement with other legal entities, many of whom were based overseas. The object of the exercise was to establish a viable commercial relationship with a clear definable risk in the event the relationship did not work.

Fast forward to 10yrs working for a Dallas based company sitting alongside US corporate lawyers whose entire focus was how can we and how much will it cost to walk away from the contract, the deal, any deal?

The ethos was contracts were there to be broken. If you have ever worked in an "Employment at Will" state in the US you will know the corporate attitude in play.

So if you view there are questions to be answered the challenge for ex directors is four fold.

1. The primary contract with Baton 2010 Limited is in respect of a debt to repaid conditional upon the Football Club securing a return to the Premier League.

2. The liens placed against Baton assets are of a secondary consideration. i.e. you have to "prove the debt" in court before you are entitled to address the assets in question. You do not have automatic right to the asset as the method of repayment of the debt. The debtor may offer alternative means of settlement to the court. 

3. The terms for default of the primary consideration (the repayment of the debt) have not been triggered. i.e. Baton 2010 Ltd has not defaulted on the debt - indeed it cannot until such time as the club has reached the PL. I suggest Baton 2010 Ltd at this time will position, based upon the increased revenues to be received, it would never default.

4. The perceived separation of debt from the assets, created by the sale to ESI, is transitory. i.e. there is a binding commitment between Staprix NV and ESI for the previously established framework of debt and assets to be restored within a 6 month period.

Indeed the revelation today registers in the interim Staprix NV have effected a debenture against the assets of ESI. Thus by incurring the cost of the ESI debenture both parties could argue they have acted in good faith to protect the interests of the ex-directors during this interim phase.

So while the ex directors can legitimately query the "apparent" amendment to the leasehold assets of Baton 2010 Ltd what is their cause for action? What financial damage have they been caused?

Arguably there is none. It is the equivalent of somebody running a red light in a car about to collide with your car. The  car driver in running the red light has breached their contract of driving on the road. However you have no action in law until he/ she actually collides his/her vehicle with you/ your vehicle whereon you have action for damages.

In this scenario not only is there not a cause for action there is a specified time limited contract for remedy and an "interim" lien infrastructure with ESI to reflect the original ex director liens with Baton 2010 Ltd.

Tedious stuff but that is my "brain dump".

All of this should become mute upon the ESI purchase of the freehold of The Valley and Sparrows Lane.

I admit I would love to see the legal contract constructed between ESI and Staprix NV to complete such purchases.

The key message was the completion of the purchase is scheduled for the summer.

One final point I will address is the expectation people have "carte blanche" to talk to all and sundry on the basis of their involvement or intended involvement with the club in any capacity. They do not. We had the same debate over the Australians.

One of the most common failings in such matters even within the world of corporate lawyers is the area of a conflict of interest.

Legal contracts clearly define peoples roles and responsibilities. They follow defined relationships.

Bizarre though it may seem, all of the ex-director stuff above AT THIS POINT, where Staprix NV appear to have stated how they have chosen to deal with THEIR legal position, has nothing to do with ESI. So no matter whatever informal contact, no matter MDs' position on his responsibilities ESI have no direct legal relationship with the ex directors.

Any party who is governed by a formal contract of sale/ purchase attempting to speak directly to a creditor of the other party needs their bumps felt. It has conflict of interest possibilities written all over it.   

It is not for ESI or any interested party who does not maintain a contractual, commercial or legal relationship with these individuals to hold any conversation beyond the due diligence of "Has your lien been settled?"

To reiterate

ESI's legal relationships are with the representatives of M. Duchatelet.

The ex directors legal relationships are with the representatives of M. Duchatelet.

Once the full purchase is completed then ESI are in a position to manage their relationship with the ex directors.

My final contribution bar one to this thread . I hope.