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  1. John Percy @JPercyTelegraph · 49m #ReadingFC set for heavy deduction of up to 9 points after breaching financial rules. Like Derby, Reading are in talks with the EFL over an "agreed decision" as per regulation 85. That should make your day!
  2. The Administrators (if they are appointed) have to run the company for the benefit of the creditors as a whole, the directors also lose all powers over the company. So I can see that if there is the reasonable prospect of a sale it would fall within the Administrators' role to continue the fight. That said it will all come down to cash. Are there sufficient funds available to meet the ongoing costs? Is any external funding available? On a related issue it is possible to appeal the 12 point penalty for the insolvency event. However the EFL rules are surprisingly tight on this issue: 12.12 Any Sporting Sanctions Appeal must be in writing and be received by The League at its registered office no later than seven days after The League serves the Notice. The Sporting Sanctions Appeal must contain a statement setting out the grounds of appeal and provide copies of any documentation upon which the Club intends to rely in support of the Sporting Sanctions Appeal. 12.13 The Club must also lodge with The League, at the same time as the Sporting Sanctions Appeal, a deposit of £5,000 in respect of the costs of the Sporting Sanctions Appeal. 12.14 Upon receipt of the Sporting Sanctions Appeal The League shall refer the matter to the League Arbitration Panel in accordance with the provisions of Section 9 of these Regulations, supplemented by the provisions of this Regulation 12, and in the event of any conflict between Section 9 and this Regulation, this Regulation shall prevail. 12.15 The League shall, immediately upon receipt of the Sporting Sanctions Appeal, instruct a firm of independent accountants to carry out a review of the activities of the Club and/or any Group Undertaking for the purposes of preparing an independent report into the circumstances surrounding and leading up to the relevant Insolvency Event(s). The Club shall meet the costs of preparation of that report in any event. The report shall be provided to the Club, the League Arbitration Panel and The League. The League Arbitration Panel shall take into account the contents of that report when determining whether the insolvency proceedings arose solely as a result of a Force Majeure event. 12.16 The League Arbitration Panel shall hear any Sporting Sanctions Appeal within 21 days of the lodgement of the Sporting Sanctions Appeal. 12.17 The Club shall bear the burden of proof in relation to the matters set out in the Sporting Sanctions Appeal on the balance of probabilities. 12.18 The League Arbitration Panel shall have the power to: 12.18.1 confirm the deduction of 12 points; or 29 12.18.2 set aside the deduction of 12 points and substitute a deduction of such lower number of points as it shall deem appropriate; or 12.18.3 order that there shall be no sanction at all. 12.19 Any costs incurred by any party in proceedings brought before the League Arbitration Panel shall be met by the Club in any event and shall be considered as a sum due to The League for the purposes of Article 48 So if the Administrators wish to appeal (no one else can) they are then incurring a significant cost burden, plus they need to act rapidly.
  3. So HMRC put you into Compulsory Liquidation and the club ceases to exist, nice outcome for DCFC! MSD would have to have been informed of the intention to appont an administrator, a week I think, before the notice was issued. If they were at all interested in the club they had to time to make that clear. Read the Regulations! Read the Regulations! Particularly 51.6.1 and the following note! "51.6.1 due to any other Club (or club) (including but not limited to any Transfer Fee, Compensation Fee, Loan Fee, other contributions due pursuant to the terms of any Temporary Loan Transfer, or any subsequent payments which become due under the terms of any original transfer(s), ticket monies, or other payments pursuant to the terms of any other agreement); Examples of what are considered to be ‘other agreements’ in Regulation 51.6.1 could include compensation agreements relating to managers / coaching staff. That will depend upon the Loan Agreement and the definition of 'Default Event' in that agreement. As the Football Club is the tenant I would be very surprised if their insolvency wasn't a default event, given the close connection between all the parties. That would allow MSD to recover under the charge, which covers virtually everything including ownership of the football club and the name 'Derby County FC' or any other guarantees it has. It isn't his to sell or give away. The ground is owned by a Company with restrictions on the disposal due to the charge from MSD. Whilst I understand the pendantic nature of this comment, in reality given the compex situation MSD have more powers than Morris.
  4. Nope - they failed to correctly account for the amortisation on the player contracts - they used a methodology that would have been allowable in different circumstances. Or the company can simply provide them along with the underlying details to the prospective buyers. The overall position for each indiviudal contract will, over the entire period of the contract (or on earlier sale), will be the same under the Derby methodology and under an FRS 102 compliant methodology. It will simply be the difference between the purchase price and sale price. Simplifying things slightly, Derby decided that they could charge nil amortisation on contracts until the final year when they would write the entire balance of the fee off. On a £6 million fee over a three year contract they would gain the advantage of a reduction of £2 million in FFP losses in years 1 and 2 but suffer £4 million additional losses in the final year. But if you buy such a player every year you effectively gain a permanent £6 million advantage, so it never reverts to the true position. I suspect that it would be on the treatment of goodwill on the acqusition of teh football club by the new parent. Haven't worked it all through.
  5. Yes - along with further information Probably not - normally when submitting the accounts for the next year you would simply show all the adjustments in the previous year's figures used as comparables in the latest accounts. So when submitting the 2019 accounts you would adjust the 2018 accounts including all errors from all previous years and use those adjusted figures as the comparables, with a pile of notes to explain. Companies House, The Companies Acts, HMRC and the EFL all require accounts to be submitted in line with the same standards - in this case FRS102. Derby did not comply with that standard.
  6. Morris just admitted on Radio Derby that resubmitted accounts breach FFP for 2017/18. That is a watershed moment.
  7. I am struggling to see how DCFC can survive at all, let alone until a buyer is found. This is significantly more complex than other recent insolvency events. Who is going to fund the ongoing cash cost of the club? For how long are they going to do so? Would a failure to pay the players in September result in the 3 point suspended penalty being activated? Are MSD (who once the administrations of DCFC and the parent are formalised - which is probably a default event) going to exercise their rights to everything, including the shares in the football club? Can MSD recover more from a Liquidation than they can from a fire sale? How will the football creditors be paid to allow the 'share' in the EFL to be transferred? How much cash is the buyer or Morris going to need to stop the otherwise inevititable liquidation? £20 million plus a £1 to 2 million a month? £30 million plus £2 to £3 million a month? What do you do about the onging FFP issues? What about the 12 point penalty? How do you keep your best (or any) players in January with a 20 point deduction? If you really wanted a football club could you get the likes of Barnsley, Wigan, Preston, or Sheffield Wednesday for less and significantly less hassle?
  8. Disappointed with the comments on here. Yes Morris and Pearce took the proverbial but how sad for a once great club. Lots of good people up here will be mourning tonight and worried about their jobs
  9. EFL Statement - EFL statement: Derby County - News - EFL Official Website "In response to ongoing media speculation, the EFL wishes to clarify that discussions with Derby County in respect of outstanding Profitability and Sustainability (P&S) matters are continuing and no decision has yet been reached. On 2 July 2021, an Independent Disciplinary Commission found in favour of the EFL in respect of its challenge to the Club’s policy on amortising player registrations. The Club received a £100,000 financial penalty, a reprimand as to its future behaviour and ordered to submit revised accounts for the years ended 30 June 2016, 2017, and 2018. In an attempt to resolve all remaining issues with the EFL in regard to its P&S submissions the Club provided the EFL with information prior to last month’s deadline and this remains under review by the League’s Executive. In any disciplinary matter, the EFL will always consider whether it can be concluded by way of an Agreed Decision as per EFL Regulation 85. An Agreed Decision, which is subject to independent ratification, is deemed appropriate in circumstances which justify the conclusion of an effective and equitable resolution without a referral to a Disciplinary Commission. There are no timescales for this matter to be concluded and the League will not be providing any further comment at this time."
  10. No chance of court action. The membership rules expressly prohibit it. However DCFC could institue a dispute with the EFL with the objective of requiring the EFL to lift the Transfer Embargo, assuming of course that the EFL are playing silly. See rule 95.2. I'm really surprised that given the weight of the DCFC case, or at least the amount of hot air expended on it on DCFCFans that they haven't come up with this solution. I wonder why MM and the super duper legal teanm haven't either - makes you wonder if they really have been caught out badly. Oh and they are still whining on about the accounts being approved by the EFL - the rest of their views make more sense if the two decisions haven;t even been read!
  11. Agreed. They have been asked to restate the accounts, and due to a timing fluke .... It won't help them for 2015/16 or 2016/17 seasons, and it will only help them for 2018/19 to 2021/22 if it's permissible. I did ask a couple of auditors I know, who both rolled their eyes and said, "I'll get back to you when I have some spare time ..."
  12. Unfortunately you are looking this from the wrong end. FRS102 allows you to value property on a 'cost basis' or a 'valuation basis'. When Derby started using FRS102 for the first time they decided to use a 'valuation basis' and therefore carried across the £30m relavuation reserve. However they first used FRS102 for the 2016 accounts, which is the eraliest year that they have to restate their accounts for the EFL. So the question is - "Having initially used a 'revaluation basis' can they change to a 'cost basis' when restating the accounts. The reversal of the reserve on a cost basis will be a prior year adjustment in 2015. If this is a valid adjustment then the profit on disposal in 2018 will be enhanced by the lack of a revaluation reserve.
  13. It would be a change in control event. That said I doubt that the EFL would argue that Her Majesty in her Official capacity was not a 'Fit and Proper Person'
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