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Everything posted by Hxj

  1. So the only facts now known with any real certainty in this whole sorry mess are: Derby County need to provide 'proof of funds' of around £7 million on or before 1 February No formal bids have been made There is no preferred bidder All the indicative bids result in Derby County not meeting the EFL requirement that unsecured creditors receive 25% of the amount due, so on that basis a 15 point penalty next season as well Nobody has a solution.
  2. The player registration actually passes to the EFL on a liquidation. They can then negotiate a fee with the purchasing club which is used to repay any unpaid Football Creditors in the first instance. It won't have much impact on the individual players as they will need new contracts to get paid.
  3. As if anything Morris did was dodgy! Of course if the stadium was really worth £81 million, and it had stayed within the 'FFP group' there would not be a problem now.
  4. Even more telling when you compare with the comments on Semenyo, Scott and in particular Baker.
  5. The latest from the EFL - Derby County update - News - EFL Official Website - further useful information on 1 February deadline ... and breathe ... During the past 72 hours, the EFL has met with a number of integral stakeholders including MPs, Government officials, local authorities and the Rams Trust to discuss the ongoing and challenging situation relating to Derby County. In all of these discussions, the League has maintained its position that is seeking to work proactively with all relevant parties to find appropriate and expeditious solutions that will ultimately see the Club out of Administration and thriving under new ownership. However, the EFL is disappointed to note that whilst this dialogue has been taking place there has been, and continues to be, a large amount of misinformation circulating in the public domain which is inaccurate, misleading and a distraction to the immediate objective of understanding how the Club can be funded in order to complete the current season. One such claim made in the past 24 hours is that the EFL has questions to answer regarding a supposed deal reached with Middlesbrough FC linked to Disciplinary action being taken against Derby County for alleged Profitability and Sustainability breaches. These accusations are wholly untrue, serving as an unwelcome diversion to current matters that need swift and decisive action by Derby’s Administrators. This claim was in fact heard and dismissed by an Independent Disciplinary Commission, the judgment of which was published in August 2020. With original charges lodged in January 2020 Derby County’s ownership argued that the agreed stay of proceedings by Middlesbrough FC against the EFL was an 'extraordinary bargain' with the Club bringing forward a series of procedural defences, one of which that EFL charges against Derby County were an ‘Abuse of Process’. After carefully considering all the evidence the Independent Commission rejected all of these allegations and claims entirely (see para 161 onwards here). The League is similarly concerned by recent claims that suggests a broader resolution to ongoing issues is solely dependent on the claims from Middlesbrough and Wycombe Wanderers being resolved, which are merely one part of a complex puzzle. At present, the EFL is not in a position to make a determination as to the status of compensation claims by Middlesbrough and Wycombe under the terms of the EFL’s Articles of Association and/or Insolvency policy, as it could lead to additional action from those already interested parties and the wider membership of Clubs. The role of the EFL is to balance the interests of all 72 EFL Clubs and to make a unilateral decision either way could de-stabilise the competition and be viewed as reckless and unfair to all parties. In an attempt to move this particular matter forward swiftly, the EFL has written to all parties with a proposed solution to negotiate a deal via independent legal mediation, alongside alternative options that would give clarity on the Football Creditors point quickly. The League is currently awaiting a response from all of those involved and it hopes to hear from all parties on the options proposed imminently. Whilst clarity is also required as to the status of the claims from both Middlesbrough and Wycombe Wanderers, it is also critical that progress on two fronts urgently be made: Funding – The Administrator as a matter of urgency needs to clarify how it plans to fund Derby County for the remainder of the season. By the Administrator’s own forecasting, the Club will run out of cash by February, and therefore sourcing funds is of paramount importance to ensure they can compete for the rest of the season. This is not an artificial EFL deadline, but the reality of when we have been informed the money runs out. Preferred Bidder – The EFL needs urgent clarification from the Administrator as to who the preferred bidder is. Without this clarification, no tangible progress can be made into solving the challenges associated with the claims. In addition, further to a meeting with MPs yesterday, the EFL has agreed to take part in any additional collective dialogue between Derby County, Middlesbrough, Wycombe Wanderers, the Administrators, local Derby MPs and other relevant stakeholders that is requested and will progress matters. While ultimately the affairs of Derby County remain solely in the care of the Administrators, the EFL is currently doing everything within its powers and remit to help navigate a solution. The League is exasperated that this has still not been resolved and that we are approaching the end of the transfer window and Administrators have still not provided us any guarantee of funds which are required under the terms of the League’s Insolvency Policy. As a founder Member of the Football League with a proud history, the Club is of huge importance to the East Midlands, our competition and the wider football family and we all hope it can flourish once again in the future as a sustainable member of the EFL. However, any resolution achieved cannot ignore or sidestep EFL Regulations or UK law and any solution needs to be found that satisfies the competition regulations and the terms of the EFL’s Insolvency Policy that was set and agreed by all 72 members, including Derby County. As previously articulated, this a complicated set of circumstances that requires consideration of the EFL’s broader role as the body that oversees 72 member Clubs and not just those Clubs that may be affected at any one time. Any decision taken by the League must be taken on behalf of the interests of all its membership – including Derby County, Middlesbrough, and Wycombe Wanderers - and to ensure the long-term integrity of the League as a collective.
  6. German league football is in most ways the worst of both worlds. They can't get big individual investors as there are too many restrictions. They don't actually have fan led governance either, all the crucial decisions are made by a small elite, the chairman and his elite gets to choose which candidates stand for each post, and what the fan base are allowed to otherwise vote on. It is all 'smoke and mirrors'.
  7. Update from the Administrators at An Update From The Joint Administrators Of Derby County Football Club - Blog - Derby County (dcfc.co.uk) The most interesting bits (to me) are: The implications are that the bids are not sufficient to meet the Football Creditors and other creditors rules. The claims from Middlesbrough and Wycombe, highlighted below. Without reading too much into the comments it would appear that the legal advice received from leading law firms and three QCs is not as dismissive of the merits of the claims as others seem to think they should be, This statement provides a summary of progress to supporters and the media in respect of Derby County Football Club. As we have previously reported, we are dealing with a large number of sensitive issues and felt that issuing reactive statements in response to the recent statements issued by various related parties would at best be unhelpful and also may hinder or prejudice discussions we are having with the same parties. Our perceived lack of recent communication has therefore been both tactical and deliberate. As we have seen from statements issued by others, sometimes these can be misinterpreted and prompt further questions. We are in receipt of a substantial number of messages from supporters, containing questions and supportive comments. We have prioritised our time to focus on the key matters at hand and expect this statement to go some way towards responding to the key questions arising from these messages. We have set out below the key matters which we believe are relevant to ensuring the survival of Derby County Football Club. Whilst we have categorised those key matters, they are, in reality very closely linked. Whilst we have tried to be as clear and open as possible, there are matters, for reasons of confidentiality and sensitivity, which cannot be shared and we hope supporters and the media will understand the reasons for this. 1. Interested Parties Whilst we have communicated previously, there has been a huge amount of interest from parties interested in acquiring the club. We have run a careful and diligent process and we are currently engaged in discussions with three of those parties, all of whom have the credibility to take the club on. Whilst we had hoped to have been able to announce formally our favoured bidder, this has not been possible to date as a result of the issues we will refer to later in this update. These discussions continue this week, and we remain hopeful that we will be able to announce the preferred bidder shortly. Due to the complex nature of these matters, we are unable today to commit to the specific date on which we will do this.We are, however, cognisant of the 1st February deadline as set by the EFL. The key issues for the interested parties we are talking to are: * The uncertainty around the claims from the two football league clubs and what impact that may have on the club going forward in the event these claims are not resolved during the administration. * The uncertainty around the possibility of further sanctions from the EFL in the event the chosen bid does not deliver the financial compensation to pass the EFL rules around payment to both football creditors and other creditors. Please note that the above issues have been subject to numerous discussions with both the EFL and others over the last few months and are extremely complex. They are also very sensitive, and we do not believe it to be helpful to discuss them in any detail in this update. 2. Claims from two Football League Clubs These have been well documented both by us previously and more recently, by others making statements. We do not think it would be helpful, in view of the sensitivity of these matters, to elaborate on the discussions we have been having other than to confirm we are committed to dealing with these claims in the most expeditious manner. They are complex and are heavily disputed. Whilst the two claims have yet to be fully pleaded, we have taken advice from leading law firms and obtained three QC barristers opinions as to the merits of their claims and also the EFL current position. We have highlighted different ways in which we believe these claims can be dealt with and we are in discussions with the EFL in this regard. As referred above, no interested party is willing to commit to acquiring the club without further clarity on these claims and we continue, tirelessly to find a solution to move matters forward. 3. Funding and the EFL position We have maintained cordial and business-like relations with the EFL and are committed to continue with those. They are the regulator, and we understand and respect their rules. They have concerns about the time this process is taking, principally because of point 2 above, and have asked us for evidence that we have the ability to fund the club through to the end of the season in the event we are not able to successfully achieve an exit before then. The EFL have maintained this position throughout and our objective was always that once we had formalised our buyer, that we would work with that buyer to help with funding whilst the formalities of exiting the Administration were dealt with. That remains our intention and indeed discussions with those interested parties as referred above have focused on their commitment to provide that funding. The deadline for evidence of funding is 1st February, at which time the EFL have said that if they do not have firm evidence of funding, they will consider their position in terms of Derby’s ability to fulfil the fixture list. We have provided the EFL with 3 scenarios as to how that funding gap can be bridged and the EFL await further confirmation from us as to which scenario we plan to deliver. This will be dealt with over the next few days. In the interim, the EFL have confirmed that until as such time as they are satisfied with that evidence, they will not allow any new player registrations to take place and this does include player contract extensions. 4. Playing Squad and discussions with Wayne Rooney We have maintained a regular dialogue with Wayne Rooney and indeed met with him on Tuesday this week. We are hugely impressed with his commitment and understanding of the position. We are also hugely impressed with the attitude and performance of the players in this very difficult time. We have explained the current position to Wayne Rooney and have committed to keeping him abreast of our progress. There have been some player exits but our position has always been that we would like to maintain the integrity and quality of the squad as best we can. That is still our intention. We would like to assure everyone linked to the club that we are working tirelessly to achieve a successful outcome and still believe this is possible. We understand the frustrations of the supporters who are desperate for the club to survive and we are doing everything in our power to make this happen. It is our intention to maintain open dialogue with you and will communicate as and when we have meaningful updates.
  8. Couhig's line is - Derby cheated - Derby then went on a process of deliberate delay to ensure that no penalty was awarded in 2020/21 - therefore Wycombe went down. He also gave Quantuma a kicking as well. To paraphrase, Quantuma using Middlesbrough and Wycombe to cover their own incompetence and it will all come out in the end. Gibson's has less credence, but it still needs to be resolved. When listening to Couhig please remember he is an American lawyer so the phrasing can be unusual.
  9. Beautifully simple explanations from Couhig - 'caught with their hand in the cookie jar'
  10. Somebody else putting the boot into Quantuma. Club Statement: Derby County (mfc.co.uk) A statement from Middlesbrough FC... MFC is aware of the media speculation regarding its claim against Derby County and has read last night's statement by the EFL. The club wishes to ensure that, to the extent possible given that the arbitration claim is confidential, the full facts are in the public domain, rather than ill-informed speculation. Why are MFC bringing a claim now? MFC became aware that Derby County was cheating under the P&S Rules during 2018/19. MFC first intimated a claim against Derby County in May 2019 immediately following the end of the 2018/19 season. The claim was held in abeyance whilst the EFL Disciplinary Proceedings against Derby County were followed through to a conclusion. MFC then sent Derby County a Letter Before Action in the autumn of 2020 and started arbitration proceedings against Derby County in January 2021. Derby County used various procedural tactics to seek to delay the proceedings and as a result the claim has yet to be finally determined. MFC is not responsible for the delay. Had it been finally determined, and an award made in favour of MFC, there would be no dispute that MFC would be a Football Creditor. It is said the claim has no prospect of success so why continue? Given that the claim is confidential, MFC does not understand how people can assert it has no prospect of success. MFC is a commercial organisation and would not pursue frivolous litigation at huge costs unless it had been advised that there is a good prospect of success. The claim is not limited merely to the amortisation issue in respect of which a Disciplinary Panel have already found Derby County to have breached the P&S Rules. Without breaking the confidentiality of the proceedings, in simple terms, MFC allege Derby County and its directors systematically cheated under the P&S Rules and that such cheating affects the integrity of the competition. At least two clubs, namely Middlesbrough and Wycombe, were directly affected by the cheating, albeit in different seasons. In simple terms so far as MFC is concerned, had Derby County not cheated, MFC would have been in the play-offs. However, Derby County did cheat and, as a result, MFC lost the opportunities that arise as result of that. How can MFC hold the administrators and EFL to ransom in demanding that its claim, reported to be worth over £40m, be met in full as a condition of the share in the EFL transferring? That is not what MFC has said. The club believes that it is a Football Creditor but accepts that, as things stand, the size of the debt due is unknown. All MFC have said is that any new owner should be required to honour the final decision of the Arbitration Panel on behalf of Derby County once that is known. There is a certain inconsistency to the arguments presented by the administrators. On the one hand, it is said that there is no prospect of the claim succeeding, in which case there is no risk for a new owner. But, on the other hand, the administrator apparently cannot find a new owner because they will not proceed without the claim being settled due, presumably, to the fact that it has merit and might succeed. If the claim has no prospect of success MFC does not understand why a new owner would resolve the matter by accepting that the arbitration decision should be honoured. Of course, if the claim has a value as MFC believes, there is no reason why MFC should not, as a Football Creditor, be entitled to recover the monies due to it. Why is Steve Gibson refusing to compromise the claim? MFC has made it clear since the administrators were appointed that it was happy to discuss how the claim is dealt with and whether a compromise could be reached with the administrators or the new owner. The administrators contacted MFC in November 2021. However, there has been no contact at all since then, until this week. The administrators ignored MFC’s correspondence from November and MFC’s offer to continue engagement. MFC has made clear that it does not wish to see Derby County fall into liquidation, and that MFC is happy to be realistic in its expectations in order for Derby County to exit administration. However, it is ultimately up to the administrators or the new owner to put a firm and realistic proposal forward or merely agree that MFC’s claim, when finally determined, will be met in full by the new owners.
  11. This from Andrew Bridgen MP sums up the position neatly - Looks like Quantuma need to do some reworking of their position.
  12. Para 71 Sch B1 IA 1986 I think is the provision that he is referring to. That allows an Administrator to sell property subject to a fixed charge to assist in the orderly Administration, as if the fixed charge didn't exist. This is subject to a court order. Not sure a judge would ever agree to someone selling property that belongs to someone else, where that company is not subject to any insolvency action. Plus you are back to time and costs in going to court.
  13. However if they do get the matter resolved at minimum cost they then run into the HMRC debt problem ...
  14. There is a lot of hot air going around currently, aided and abetted by some journalists who clearly don't research, about a reconstruction under the Corporate Governance and Insolvency Act 2020 (aka 'cross class cram down') and how this provides a loophole that Quantuma can exit Derby County from the Administration, not pay the debts and not suffer any consequences as the EFL have not updated their Regulations. Firstly the 12 point penalty for entering Administration has already been applied. Secondly any further penalty arises as a result of either not paying Football Creditors in full or not paying other creditors at least 25% immediately or 35% over a three year period. It has nothing to do with how you exit Administration. Secondly the reconstruction is not something you pull out of the air and impose on the creditors, it has to be sanctioned by a High Court judge. What the legislation says is that where any class of creditor votes against the CVA and they would receive less in a Liquidation then a proposal may be imposed by the Court if they see it as just. For a Reconstruction to give the outcome required, Football Creditors paid in full and all other creditors paid at least 25% upfront. So a judge would need to hold that firstly 'Football Creditors' are a separate class of creditor distinct from other unsecured and non-preferential creditors and that special status elevates them above preferential creditors, contrary to all UK insolvency legislation ever enacted, on the basis that a group of people decided that that was convenient for them. You would only get to a court case if HMRC objected to a CVA, and you can therefore assume that they would object to the Reconstruction proposal and you could rightly assume that they would appeal against any ruling by the High Court that they objected to. As the legislation is new there is no doubt that any appeal would be heard. The main problems here for Derby are this would all cost money, lots of it and time, lots of that too.
  15. The sanction is a Transfer Embargo. Only recently has such detail been publicly available. It could be that Derby were subject to such an embargo from sometime in 2019.
  16. Two recent quotes from the Derby Forum, posted at the same time. These highlight precisely the gap in the thought processes ... That’s fine, except they [the EFL] seem to be suggesting that their internal rules are more important than UK insolvency legislation. And they are preventing us from exiting admin and paying creditors, including HMRC. I think they’re asking for trouble and I hope they get it. and then: A preferred bidder l understand is prepared to pay c£50m to satisfy the club’s creditors, which include MSD in full, football creditors in full (not inc. Boro and Wycombe), an agreed % to HMRC and 25% to unsecured creditors. Presumably the bit in bold is the bit to satisfy the EFL internal rules and it is irrelevant that the payments would be in breach of UK insolvency legislation?
  17. Looks like Jason Knight is out next - Derby County set to sell £8m captain Jason Knight | Irish Sport | The Sunday Times (thetimes.co.uk) However selling him would mean that Derby would have enough cash to last the season.
  18. They assigned their 'central funds distributions' for 2020/21 for £30 million odd cash up front. Then Covid hit - so no income and no central distributions. Cash would have got very tight. That said, I believe that it was Hoyle who lent the club the cash up front in the first place so everything he says or does needs to be looked at in that context.
  19. I think that Derby would have gone through some sort of sale, reorganisation or insolvency event before the end of the 2019/20 season due to the January 2020 insolvency action by HMRC if it had not been for the virus stopping all HMRC winding up procedures. It needs to be remembered that Derby went into Administration on 22 September 2021, HMRC were restarting insolvency actions on 1 October 2021, that is not a coincidence. Oh and Regulation 17 is pretty thorough: 17 HMRC Reporting 17.1 Current HMRC Debt. Any Club which has not within 28 (twenty-eight) days of the relevant Due Date paid to HMRC the amounts due to be paid to HMRC to discharge: 17.1.1 the Club’s full liability for PAYE & NIC due in respect of any and all employees or former employees of the Club for the immediately preceding payment period; and/or 17.1.2 the Club's full liability for PAYE & NIC which becomes due as a result of an assessment issued by HMRC, subject to clause 17.8 below, (each a ‘Default Event’) shall report the Default Event to The League within 2 working days of the Default Event. 17.2 Reporting Default Events. When a Club reports a Default Event to The League it shall at the same time provide to The League details of any and all amounts due to HMRC from the Club in respect of PAYE & NIC, together with the periods to which they relate. 17.3 Consequences of a Default Event. Without prejudice to the general position (pursuant to Regulation 43.4) that all registrations must be approved by The League and subject to Regulation 17.3A, a Club which is subject to a Default Event shall be subject to a registration embargo such that it shall not be permitted to register any Player with that Club without the prior written consent of The League for the period that the Club is subject to a Default Event. 17.3A Regulation 17.3 will not apply where a Club suffers a Default Event due to the failure to discharge a COVID PAYE Liability and has entered into a Time to Pay Agreement and is compliant with the terms of that Time To Pay Agreement. For the avoidance of doubt, where a Club defaults on the terms of a Time to Pay Agreement, and such default results in all outstanding amounts becoming due to HMRC immediately, the Club shall remain subject to a Default Event until such time as the outstanding amounts are paid or included within any other Time to Pay Agreement. 17.4 Failure to Notify a Default Event. A Club which fails to report a Default Event shall be guilty of misconduct and shall be referred to a Disciplinary Commission in accordance with Section 7 of these Regulations. 17.5 Provision of Authority. Each Club shall provide to The League, not later than 31 May prior to the commencement of a Season, (and in any event within seven days of any request for a further authority from The League), an original, irrevocable authority (which shall not be time constrained) in the form prescribed by The League and signed by a director and the company secretary of the Club, addressed to HMRC authorising HMRC to provide to The League information relating to amounts of PAYE & NIC payable, paid and overdue from the Club to HMRC from time to time including, by way of example and without limitation, the amount of Arrears (if any), the existence of and current position in respect of any Time to Pay Agreement and if a Club suffers a Default Event (‘Authority’). The League shall be entitled to forward the Authority to HMRC without having to seek the consent of the Club. 17.6 The Board shall have the power to suspend any Club which, not later than 31 May prior to the Commencement of the following Season (including, for the avoidance of doubt, those Clubs entering The League by way of promotion from the National League or relegation from the Premier League for the following Season) or within seven days of a request, fails to provide to The League the Authority in the required form. A suspended Club shall not play in: 17.6.1 any League Match; 17.6.2 any Football Association Cup Match; 17.6.3 any EFL Cup Match; 17.6.4 any EFL Trophy Match; and/or 17.6.5 any other match conducted or controlled by The League and in which it would otherwise be eligible to compete. 17.7 For the purposes of the League Competition, the Board shall have the power to determine how the cancellation of a League Match caused by the suspension of one of the Clubs, which should have participated in it, shall be treated. 17.8 Disputed Amounts. Any amounts which HMRC claims to be due to it, for example by way of an assessment, but which have been formally contested by the Club shall not be considered as due to HMRC for the purposes of this Regulation 17 until such time as a final determination is made on HMRC’s claim. 17.9 Information provided by a Club and/or HMRC in relation to any Arrears shall only be made available to senior members of The League’s staff and the independent Chairman (as described in Article 17.1.1) and shall not be disclosed to the Board generally, provided always that The League shall be entitled to report the happening of a Default Event to the Board for the purposes of enforcing Regulation 17.3 (Consequences of a Default Event).
  20. Nope - technically they are '2nd Preferential Creditors', they should be paid in full before any 'Unsecured Creditors'.
  21. Shinnie on his way too, according to my local rag. Breaking Derby County transfer news as the Rams accept a bid for midfielder - Derbyshire Live (derbytelegraph.co.uk)
  22. Yep - that's the point I have been making badly since Derby went into Administration. An insolvent business is one which cannot pay debts when due (simplified I accept). The 'Going Concern' report in Bristol City accounts is extensive and explains that the shareholder has agreed to keep the company solvent for at least the next 12 months, that deals with that issue. I have also argued that this is the main reason why Derby failed to submit accounts, Morris did not want to give that guarantee.
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