Derby County

[CyderInACan]

1 minute ago, Merrick's Marvels said:

Is the correct answer

Just imagine it though! 

I'm trying to stop imagining it! 

[Mr Popodopolous]

I wonder what this means...not a clue on my part, but it looks interesting.

[Sir Geoff]

1 hour ago, Merrick's Marvels said:

If I have no money with which to buy a football club, how can I seriously be considered a fit and proper prospective owner of one? 

You don't need money to buy a football club, Just ask the Glazers and the Burnley owners. OK they have money but they didn't use it to buy said clubs.

[Mr Popodopolous]

Andy Holt- succinctly put, think he sums up some of the current (as per Nixon) antipathy among other clubs to Derby.

https://twitter.com/AndyhHolt/status/1536701793245270016

 

Edited June 14, 2022 by Mr Popodopolous

[Hxj]

1 hour ago, Mr Popodopolous said:

I wonder what this means...not a clue on my part, but it looks interesting.

Probably as exciting as the BCFC Companies House filing!  More than likely the resignation of a Joint Administrator, and maybe, drums roll, the appointment of a new Joint Administrator, entirely routine happens all the time.

[Merrick's Marvels]

1 hour ago, Sir Geoff said:

You don't need money to buy a football club, Just ask the Glazers and the Burnley owners. OK they have money but they didn't use it to buy said clubs.

Michael Knighton! 

Kirchner eat yer heart out. 

[BTRFTG]

On 14/06/2022 at 11:20, ExiledAjax said:

Ok, I'm not going to argue about what you originally said. The post of yours that I originally quoted is still posted a few pages back, so we can all go and read it if we want to.

But, again you've used the word "believe" several times when describing what Derby County Football Club Limited (in administration) or their Joint Administrators can currently do, or can currently benefit from. You say this in relation to the status of Derby County Football Club Limited (in administration) as a Member Club of The English Football League Ltd.

As an example, you say that you don't think Derby currently has the right to vote as an EFL Member Club. OK, let's test that. Firstly, nowhere in the articles of association of The English Football League Ltd or the EFL Regulations does it say that a Club automatically loses this right upon entering administration. In fact the articles (in particular 10.10, 11.5, 12) suggest, although voting rights are not expressly addressed, that any club that is a Member Club (ie any entity that holds a share from time to time) is entitled to vote. From my reading it looks like the only way this right to vote could possibly have been removed is if it was one of the conditions to suspension contained within the Notice of Withdrawal. Now we haven't seen that document, so we cannot be sure of the exact conditions contained within it.

However, if the right to vote was purported to be removed from Derby under the Notice of Withdrawal then that would amount to an amendment of the rights attaching to a share. As all shares of the same class must have the same rights (otherwise you're deemed to have created a new class of share), then (in the absence of anything in the articles) doing this should require a special resolution of the other shareholders of that class of share (ie 75% of the 71 other clubs) to alter those share rights. We'd also see a filing on Companies House to that effect. No such filing is shown on the Companies House webpage for The English Football League Ltd, and so we can assume this has not happened. Therefore we should assume that Derby are still able to vote as a Member Club.

You are correct that no Derby representative can stand for election to the Board of the EFL. That's in the articles (article 20.1.14). They also cannot put forward anyone to be an EFL rep on the FA's board (article 24.6.12).

Of course the Joint Administrators don't take beneficial ownership of the shares of the company they administer. Is that relevant to Derby County Football Club Limited (in administration)'s membership of the EFL? Membership is determined by ownership of a share - ie ownership of legal title, not beneficial ownership. I agree that the statement yesterday and the EFL stepping in as they are suggests that the EFL do not believe the administrators are acting as they should...but that statement and actions doesn't in anyway suggest that Derby are no longer a Member Club.

Yes. That is exactly what article (not regulation) 4.8 says. There is no problem with them doing that at all because it's in the rules - rules that apply to Derby because they are a member of the EFL.

I'm not trying to point score or argue, and I do agree with some aspects of what you say, there are some things that Derby (or its admins and directors etc) cannot do because they are in admin. However, this conversation needs to be held on certain terms. I'm stating the certainty of the articles, the regulations, and corporate law. You are stating occurrences that if true have big consequences, but you're not providing evidence to support your beliefs. Saying they've been expelled, saying they cannot vote anymore, this sort of stuff feeds the fantasy 'EFL vendetta' nonsense that Derby fans are spouting. It undermines confidence in the EFL as a body, and sows seeds of confusion amongst fans.

I think we're somewhere between semantics and practicality and doubtless will find out soon. No vendetta, but wasn't there something similar in the Bury case? There I believe questions were raised as to their ability to raise resolutions (seeking absolution from previous failings perhaps,) and their inability to bid for upcoming grants, both of which would fall within the normal remit of members. In previous insolvencies where grants/loans were recalled, so as to ring-fence under 'football debt' but in doing so breaking the camel's back, I think the criteria as to how and when this was done was also questioned, it appearing to be related more to status, history and popularity amongst fellow members than statute regulation. Likewise, I'm uncertain of the EFL & PL payment distribution schedules but think some of these are close season to help clubs out with cashflow. Once in administration I think these may be deferred and set aside to cover 'football related' debt where insolvency looks an imminent possibility, football acting to protect its members using the unusual circumstance of priorities administrators may not question.

In Bury's case wasn't influence also sought as to how far peers would let them fall down the pyramid (which as you know isn't cut and dried in FA regulation and historically has been applied to suit - the old 'have to apply AND be accepted ploy'?)

Derby may retain a voting share, point being are they able to exercise it and, if do, for what?  Are they automatically entitled to draw down on grants and distributions which through membership they would normally have access? If they are that's presumably through the administrators, though as I highlighted is that proven as from the EFL's terse comments at the weekend that doesn't appear to be a given? One supposes should Derby directors retain the vote this might that be exercised with the expressed authority of the administrators, though from what I've heard at City such EFL matters tend to be decided at pace either via electronic exchange or emergency meeting, neither of which leave leeway for delayed 3rd party authorizations. If administrators are not recognised to vote (though the club retains a voting share,) effectively Derby are a member in name only, in limbo, up the creek without a paddle at EFL's mercy. So yes, that would have serious consequences should that be the case. 

The administrators (should) wear many hats so strikes me the EFL could run into problems should a challenged yet exercised vote within their structure be of disbenefit to creditors. You've already highlighted areas which are impacted once entering administration where membership 'rights' are effectively denied but which return once exiting administration.

I'm trying to find the previous guidance, though think much of that produced by the EFL is done on the fly, so it may have changed case by case.

[ExiledAjax]

18 hours ago, BTRFTG said:

I think we're somewhere between semantics and practicality and doubtless will find out soon.

Membership status isn't a semantic, Derby are a member of the EFL for the moment.

Bury was quite similar to the current Derby predicament yes. Just under 3 years ago Bury were under a CVA, and as that's an Insolvency Event, the EFL had served them with a Notice of Withdrawal, suspended subject to conditions - same as Derby have. Bury were able to kick that can down the road long enough to be included on the fixture list, but then were unable to prove financing for the season. Their first few games were postponed, and then ultimately the were expelled from the League. Note that a BBC report from the time states that the EFL said it was willing to "commence negotiations with the club [Bury] to enter into a membership agreement, which will incorporate the ongoing conditions for continued membership in the league and ensure the terms of the CVA are met". So it seems the EFL are open to creating specific conditions for distressed clubs, in order to allow them to continue in the EFL.

Naturally this was possible only because Bury were under a CVA, and so were forecast to survive as a company (and if I recall correctly the company did survive, even after expulsion form the EFL). Derby on the other hand have not agreed a CVA, and are literally under threat of ceasing to exist, so negotiating an ongoing 'membership agreement' would be pointless at this stage.

I'm really not sure on how Derby's status affects their rights to distributions and other payments from the EFL. If I can pontificate briefly then to me it would seem perverse to deny a member club in financial distress of these payments. Unless there is proof that money is currently being taken out of the entity for illegal reasons, then the EFL should do what it can to improve a member's financial standing - stopping short of special treatment of course. 

As to voting, as I said I've seen nothing to suggest that a member club subject to a Notice of Withdrawal has any voting rights or powers removed.

Anyway, I see they've just lost Allsop to Cardiff...so I think that's them down to 4 contracted players now. Not even good enough for the after-work 5-a-side league.

 

[Bristol Rob]

So do they need to sort this before the fixtures come out or not?

[Monkeh]

16 minutes ago, Bristol Rob said:

So do they need to sort this before the fixtures come out or not?

No, but even if the are included on the fixtures it doesn't mean they will start the season

[ExiledAjax]

Telegraph are reporting that Mike Ashley has filed a claim against Carl Jackson, one of the 3 joint administrators.

Ashley is claiming that Jackson "...made representations that he knew were false during potential takeover talks.

Legal documents allege that Ashley's group, MASH, were told they were named as preferred bidders in January and it is claimed Jackson failed to inform the Football League, despite insisting he would.

It is also alleged that Jackson did this with the intention that MASH would continue to engage in the bidding process, incurring costs in doing so, and to submit a formal bid which would drive up the price for other bidders.

MASH are insisting this conduct amounts to deceit and they are seeking damages, with the claim filed at the High Court earlier this week."

https://www.telegraph.co.uk/football/2022/06/16/mike-ashley-launches-high-court-claim-against-quantuma-administrator/

This doesn't directly affect Derby County - the club won't be liable for any damages, and isn't involved in the case. However, its the first (to my knowledge) formal claim against one of the joint administrators for what is essentially incompetence bordering on attempted fraud. It gives an insight into the talks, and really puts Quantuma in a tricky spot.

Ups the ante certainly.

Edited June 16, 2022 by ExiledAjax

[Mr Popodopolous]

Time to get some popcorn out again?

I must also add, there is a bit in that article, well I don't see how it is compatible with EFL regs and fair value...they SOLD the stadium, to reunite it rent free is wholly unacceptable.

Edited June 16, 2022 by Mr Popodopolous

[1960maaan]

2 minutes ago, Mr Popodopolous said:

Time to get some popcorn out again?

I must also add, there is a bit in that article, well I don't see how it is compatible with EFL regs and fair value...they SOLD the stadium, to reunite it rent free is wholly unacceptable.

And , in my eyes, proves it was a con trick .

[Mr Popodopolous]

10 minutes ago, 1960maaan said:

And , in my eyes, proves it was a con trick .

Derby fans are saying it'll be fine and dandy, well a few on Twitter anyway...I wonder if other clubs will in fact concur.

If it comes down to it, don't transfer the golden share or failing that put the Mike Ashley era under such restrictions that he may as well not have bothered while the dispute remains live.

Edited June 16, 2022 by Mr Popodopolous

[ExiledAjax]

7 minutes ago, Mr Popodopolous said:

Time to get some popcorn out again?

I must also add, there is a bit in that article, well I don't see how it is compatible with EFL regs and fair value...they SOLD the stadium, to reunite it rent free is wholly unacceptable.

This bit?

"A spokesman for MASH said on Thursday night: "Mike Ashley believes that the stadium and the football club need to be purchased with the same owner, as there is no way Derby in its current position can justify paying rent for the stadium.

"If he was successful in purchasing the club and stadium, he would undertake that no rent would ever be paid for the stadium." 

He's saying that he wants to buy the stadium...and is it implied that he'd then 'reunite' it with the Club company? Either as a direct asset or perhaps through a subsidiary newco? Is that against Regs? 

Either way, it's some tactic from Ashley to sue on of the JAs at this late stage. Balls out and off we go.

 

[Mr Popodopolous]

3 minutes ago, ExiledAjax said:

This bit?

"A spokesman for MASH said on Thursday night: "Mike Ashley believes that the stadium and the football club need to be purchased with the same owner, as there is no way Derby in its current position can justify paying rent for the stadium.

"If he was successful in purchasing the club and stadium, he would undertake that no rent would ever be paid for the stadium." 

He's saying that he wants to buy the stadium...and is it implied that he'd then 'reunite' it with the Club company? Either as a direct asset or perhaps through a subsidiary newco? Is that against Regs? 

Either way, it's some tactic from Ashley to sue on of the JAs at this late stage. Balls out and off we go.

 

I'd have thought that there is a big issue there yes- the Agreed Decision which binds the club not just who ran it at the time, states that the Reporting Entity cannot be changed without EFL consent in writing. Rent counts against P&S calculations but it's fairly unchartered territory- if the £40m profit on disposal was valid then a fair rent and the lease well it follows surely?

@Hxj  ?

Edited June 16, 2022 by Mr Popodopolous

[ExiledAjax]

3 minutes ago, Mr Popodopolous said:

I'd have thought that there is a big issue there yes- the Agreed Decision which binds the club not just who ran it at the time, states that the Reporting Entity cannot be changed without EFL consent in writing. Rent counts against P&S calculations but it's fairly unchartered territory- if the £40m profit on disposal was valid then a fair rent and the lease well it follows surely?

@Hxj  ?

Does the Agreed Decision bind the stadium company...one of those Gellaw company's isn't it? I honestly cannot remember?

If it only binds The Derby County Football Club Ltd, then couldn't you incorporate a newco subsidiary of that company, and use that to buy the stadium. Or you could just buy that Gellas entity. I dunno, there's a few ways you could structure it.

Secondly, does the Agreed Decision expire upon an exit from Admin? Is it replaced at that point by a business plan or something? If so then that could mean this would be ok?

There's a lot of things we don't know of course so I'm reticent to discount Ashley's plans immediately. 

[Mr Popodopolous]

8 minutes ago, ExiledAjax said:

Does the Agreed Decision bind the stadium company...one of those Gellaw company's isn't it? I honestly cannot remember?

If it only binds The Derby County Football Club Ltd, then couldn't you incorporate a newco subsidiary of that company, and use that to buy the stadium. Or you could just buy that Gellas entity. I dunno, there's a few ways you could structure it.

Secondly, does the Agreed Decision expire upon an exit from Admin? Is it replaced at that point by a business plan or something? If so then that could mean this would be ok?

There's a lot of things we don't know of course so I'm reticent to discount Ashley's plans immediately. 

I think it was discussed before- EFL would have a pretty good case perhaps.

It surely binds the club and the overall reporting entity of the club and all subsidiaries- remember the club sat under Sevco 5112 and perhaps Gellaw Newco 203. Devil in detail as you say...

Stadium company is Gellaw Newco 202 and the parent of that is Gellaw Newco 204. It would need to be reconsolidated for sure if that bit was brought...

Business Plan requires EFL approval- if Mike Ashley's Business Plan includes this idea then the Business Plan in that form should be knocked back.

Agreed- can't discount entirely but surely a takeover of a club in that state requires the Golden Share to be transferred- quite a nice bargaining chip to have!

Don't transfer the Golden Share or don't approve the Business Plan Ashley has to submit if it comes down to it is my preferred course of action.

Edited June 16, 2022 by Mr Popodopolous

[Mr Popodopolous]

Seems Mike Ashley wants a very good deal indeed. No idea of the credence of the poster however.

 

Edited June 17, 2022 by Mr Popodopolous

[Monkeh]

The point deduction thing will be a massive sticking point, the efl can't bend the rules to save Derby that just opens them up to all kind of legal ramifications 

[Mr Popodopolous]

No embargo/business plan, clean slate too is also at odds with the EFL's Insolvency Policy.

Points deduction- well it depends on whether he hits the minimum criteria of 25% or 35% in 3 years- it's not a given but there are minimum criteria.

Seen it suggested that their total HMRC discount might be 50%- ie payment plan 25% up front and another 25% over 3 years- although this is Kirchner, anything pre Ashley etc.

Edited June 17, 2022 by Mr Popodopolous

[Bristol Rob]

20 minutes ago, Mr Popodopolous said:

Seems Mike Ashley wants a very good deal indeed.

 

Moon on a stick.

But.... if he is the only bidder in town...

[Mr Popodopolous]

2 minutes ago, Bristol Rob said:

Moon on a stick.

But.... if he is the only bidder in town...

...Then he complies with the EFL's minimum criteria and their wishes for a 2 or 3 year monitoring/business plan, points off if minimum not met- or the Golden Share is withheld.

Edited June 17, 2022 by Mr Popodopolous

[luke_bristol]

What if the points deduction is waived and a club are relegated, one point and one place below Derby? That’s surely an impossible condition to expect from the EFL.

[Bristol Rob]

10 minutes ago, luke_bristol said:

What if the points deduction is waived and a club are relegated, one point and one place below Derby? That’s surely an impossible condition to expect from the EFL.

The EFL were so enthralled by last seasons F1 they want to make it up as they go along.

[Davefevs]

1 hour ago, Mr Popodopolous said:

Seems Mike Ashley wants a very good deal indeed. No idea of the credence of the poster however.

 

Nixon was adamant the other day that £21.4m was the price, there was no negotiation downwards!!!

[Mr Popodopolous]

16 minutes ago, Davefevs said:

Nixon was adamant the other day that £21.4m was the price, there was no negotiation downwards!!!

For sure, but we know what Mike Ashley is like...do we know if that was just to avoid the -15 or for actual retention of membership?

He also said that bidders are aiming lower I believe- but Mike Ashley's proposed terms feel unacceptable.

[Hxj]

1 hour ago, Mr Popodopolous said:

No idea of the credence of the poster however.

Haven't they also stated that Appleby & Co are offering £50 million?

Equally as unlikely.

[Lrrr]

EFL to lose whatever spine it has to make sure a club like Derby doesn't go bust

[Mr Popodopolous]

25 minutes ago, Hxj said:

Haven't they also stated that Appleby & Co are offering £50 million?

Equally as unlikely.

Unsure where the source of that was from.

9 minutes ago, Lrrr said:

EFL to lose whatever spine it has to make sure a club like Derby doesn't go bust

EFL IS the clubs though...Nixon suggested on Tuesday that other clubs were furious at Derby- think it was Tuesday anyway. This would be part of Ashley's gameplan though I guess.