Derby County

[Davefevs]

50 minutes ago, billywedlock said:

Why ? He maintained a financially viable club . He is not an asset stripper . 

I agree.  Don’t like the bloke, but he actually managed the ownership of Newcastle very prudently.

[ExiledAjax]

Quite, as I said the last time he was linked, he may be an arse, but he's a responsible and prudent arse.

[Mr Popodopolous]

@Hxj

Surely football creditors are not up for discussion? Paid in full or if needs be central awards diverted to pay these. Unsure if failure to meet these obligations can impact upon the Golden Share.

Rent on Pride Park, I know a £1.1m annual  rent was 'agreed' but surely it should for FFP if nothing else reflect market value? £3.5-4m per season feels fair.

Lastly turning down bids for players- one wonders how well that represents the creditors interests here.

PS. Hopefully the Middlesbrough and Wycombe claims will get a fair hearing through the EFL processes.

[Hxj]

9 hours ago, Mr Popodopolous said:

Surely football creditors are not up for discussion?

This is a fundamental question.  Under UK insolvency law the order that creditors are paid is set out in law, simply put in this order:

Secured Creditors - from the assets they have security against

Preferential Creditors - (generally) limited amounts of pay and related pension contributions

2nd Preferential Creditors - HMRC in respect of taxes collected on behalf of others (generally) PAYE, Employees NIC and VAT.

Unsecured Creditors - everyone else

So for Insolvency Act purposes no one can be a 'Football Creditor', they usually fall as unsecured creditors.

The EFL then comes along and says, our membership terms state that 'Football Creditors' have to be paid in full, before all other unsecured creditors.  But that is just a private agreement, not the law.  HMRC object on 'Public policy Grounds', in effect you can't alter the law to the detriment of someone (in this case an unsecured creditor) by saying that you will.  This has never been tested properly in the Courts.  I have to say that HMRC's position is one that I completely agree with.

The position does potentially impact on Derby's share in the EFL and therefore the right to play in the EFL.

9 hours ago, Mr Popodopolous said:

Rent on Pride Park, I know a £1.1m annual  rent was 'agreed'

We know that there is lease on Pride Park, which the football club is party to.  If the club adheres to the terms of the lease, and MSD decide not to enforce the rights they hold under the charge, then as long as the club adhere to the terms of the lease there is nothing that the landlord can do.  This is why I don't believe the 'buy the club from Administration then negotiate to buy the ground' story.  If the debt is repaid in the administration then the charge will be removed and Morris, through his companies, will own Pride Park with no debt.

If the tenant and the landlord are not connected parties there is nothing in the EFL rules to enforce a 'commercial price' on any agreement. 

Edited January 8, 2022 by Hxj

[Hxj]

9 hours ago, Davefevs said:

he actually managed the ownership of Newcastle very prudently

Trouble is managing Newcastle very prudently with £176m turnover in 2019 and £53m operating profit is a lot easier than managing Derby's financial position.

I suspect that the locals will tolerate 'prudence' far less than Newcastle fans did.

Edited January 8, 2022 by Hxj

[Kid in the Riot]

11 hours ago, billywedlock said:

Why ? He maintained a financially viable club . He is not an asset stripper . 

Problem is he "maintains" clubs by not investing in infrastructure. Lean times for Derby in the coming years if he's in charge.

The only hope they should have is that ultimately he'll want to sell the club in a decade at significant profit, and that will mean having to return them to Championship minimum, if not Premier League. 

[maxjak]

11 hours ago, billywedlock said:

Why ? He maintained a financially viable club . He is not an asset stripper . 

Have you ever had a conversation with a Newcastle Utd supporter?..............They have an interesting viewpoint.    Although   having now gone from one questionable individual to a whole country of shady characters, who knows where they'll end up?

[Leveller]

2 hours ago, Hxj said:

This is a fundamental question.  Under UK insolvency law the order that creditors are paid is set out in law, simply put in this order:

Secured Creditors - from the assets they have security against

Preferential Creditors - (generally) limited amounts of pay and related pension contributions

2nd Preferential Creditors - HMRC in respect of taxes collected on behalf of others (generally) PAYE, Employees NIC and VAT.

Unsecured Creditors - everyone else

So for Insolvency Act purposes no one can be a 'Football Creditor', they usually fall as unsecured creditors.

The EFL then comes along and says, our membership terms state that 'Football Creditors' have to be paid in full, before all other unsecured creditors.  But that is just a private agreement, not the law.  HMRC object on 'Public policy Grounds', in effect you can't alter the law to the detriment of someone (in this case an unsecured creditor) by saying that you will.  This has never been tested properly in the Courts.  I have to say that HMRC's position is one that I completely agree with.

The position does potentially impact on Derby's share in the EFL and therefore the right to play in the EFL.

We know that there is lease on Pride Park, which the football club is party to.  If the club adheres to the terms of the lease, and MSD decide not to enforce the rights they hold under the charge, then as long as the club adhere to the terms of the lease there is nothing that the landlord can do.  This is why I don't believe the 'buy the club from Administration then negotiate to buy the ground' story.  If the debt is repaid in the administration then the charge will be removed and Morris, through his companies, will own Pride Park with no debt.

If the tenant and the landlord are not connected parties there is nothing in the EFL rules to enforce a 'commercial price' on any agreement. 

So, in short, are we saying that the administrators have to effect the best sale available (financially) for the creditors, which would ignore the way this affects Middlesbrough and Wycombe as “football creditors”? But that doing this would possibly lead the EFL to saying “you broke our rules so you can’t play in our league”? If so, that would in reality prevent any buyer proceeding, no?

[Bristol Rob]

1 hour ago, maxjak said:

Have you ever had a conversation with a Newcastle Utd supporter?..............They have an interesting viewpoint.    Although   having now gone from one questionable individual to a whole country of shady characters, who knows where they'll end up?

Newcastle supporters are generally idiots.

They support a less successful Ipswich Town, but think they are special because they used to get about 2 thousand more fans when they were a lower league club than other sides in the same division.

[maxjak]

14 minutes ago, Bristol Rob said:

Newcastle supporters are generally idiots.

They support a less successful Ipswich Town, but think they are special because they used to get about 2 thousand more fans when they were a lower league club than other sides in the same division.

What a considered and well thought out observation? 

[Hxj]

In short - yep.

[CyderInACan]

1 hour ago, Bristol Rob said:

Newcastle supporters are generally idiots.

They support a less successful Ipswich Town, but think they are special because they used to get about 2 thousand more fans when they were a lower league club than other sides in the same division.

Best fans in the world. Sleeping giant of a club. The Geordie nation will rise again 

[martnewts]

Nixon now reporting EFL want Middlesbrough and Wycombe claims to be included as football creditors totalling over £50 million that isn’t going to help finding a buyer or exiting admin

[chinapig]

7 hours ago, martnewts said:

Nixon now reporting EFL want Middlesbrough and Wycombe claims to be included as football creditors totalling over £50 million that isn’t going to help finding a buyer or exiting admin

I would find it surprising if the EFL supports the claims as I don't know of any basis in the P&S regs for them to do so. I'm prepared to be corrected on that but I would have thought it would have to be decided in the courts.

[Hxj]

9 hours ago, martnewts said:

Nixon now reporting EFL want Middlesbrough and Wycombe claims to be included as football creditors totalling over £50 million

Firstly I don't think that either club will win their case.  As has been said previously the claims appear to be more about disrupting the process, so currently they are achieving their aims.

I think some background is helpful.

If Middlesbrough or Wycombe take their cases forward it has to be through the dispute process in the EFL rules, any amount found due will therefore fall to be a 'Football Creditor'.

I think that what has happened is that the EFL have objected to the Administrators' proposals to leave the Middlesbrough and Wycombe claims to be dealt with by the new owners.  My issue with the proposal is what happens if Derby lose?  The club has to find £50 million to pay those bills, or be thrown out of the league.  I am sure that the EFL have similar concerns.  Low likelihood of this outcome, but it would cause massive damage to all clubs and the EFL.

So that leaves three options:

1. Agree that the amounts are due - the cost of exiting Administration goes up by £50 million - quick, simple but very expensive.
2. Compromise the claims and settle for a reduced sum - cheaper than 1, but it takes time.
3. Fight the claims - if you win fine, it will take a lot of time and cash.  Bear in mind that the loser can appeal.

Time is something Derby do not have.  They are burning cash at around a £1 million a month.  At some point MSD will stop lending and there will be nothing left to spend.

It may be possible to come up with an inventive solution but the clock is still ticking.

Edited January 9, 2022 by Hxj

[Mr Popodopolous]

I think Wycombe's claim has more merit than that of Middlesbrough as a) It is more recent, less remoteness and b) It seems easier to quantity. £6m directly can be sourced back to the loss in TV and Solidarity money as a team who finished 2 points from safety.

Whereas Middlesbrough's £45m numerically feels like wild speculation. If they had put in a claim for the semi final revenue foregone- Gates, corporate, TV etc well that is easier to quantify but falls far below £45m- closer to £4.5m? At an absolute push, could you also include playoff final and associated revenue? Semi final seems like the most realistic however.

Although Rooney the other day was talking renewals and mentioned a possible new signing so who knows anymore.

Remember too, Man Utd could loan Derby a player or 2 for free. Although unsure how that would fit with the EFL budget as part of their settlement etc.

Edited January 9, 2022 by Mr Popodopolous

[chinapig]

2 hours ago, Hxj said:

Firstly I don't think that either club will win their case.  As has been said previously the claims appear to be more about disrupting the process, so currently they are achieving their aims.

I think some background is helpful.

If Middlesbrough or Wycombe take their cases forward it has to be through the dispute process in the EFL rules, any amount found due will therefore fall to be a 'Football Creditor'.

I think that what has happened is that the EFL have objected to the Administrators' proposals to leave the Middlesbrough and Wycombe claims to be dealt with by the new owners.  My issue with the proposal is what happens if Derby lose?  The club has to find £50 million to pay those bills, or be thrown out of the league.  I am sure that the EFL have similar concerns.  Low likelihood of this outcome, but it would cause massive damage to all clubs and the EFL.

So that leaves three options:

1. Agree that the amounts are due - the cost of exiting Administration goes up by £50 million - quick, simple but very expensive.
2. Compromise the claims and settle for a reduced sum - cheaper than 1, but it takes time.
3. Fight the claims - if you win fine, it will take a lot of time and cash.  Bear in mind that the loser can appeal.

Time is something Derby do not have.  They are burning cash at around a £1 million a month.  At some point MSD will stop lending and there will be nothing left to spend.

It may be possible to come up with an inventive solution but the clock is still ticking.

Thanks, very informative as usual.

I'm still puzzled as to what EFL rules and regulations (P&S or otherwise) the claims are founded on. Any "debt" to Boro and Wycombe is hypothetical unless and until some competent authority (the EFL or the courts) says otherwise.

I also doubt the EFL would take a line that would increase the risk of Derby being liquidated, unless of course there really is a conspiracy against them.

[Davefevs]

3 minutes ago, chinapig said:

Thanks, very informative as usual.

I'm still puzzled as to what EFL rules and regulations (P&S or otherwise) the claims are founded on. Any "debt" to Boro and Wycombe is hypothetical unless and until some competent authority (the EFL or the courts) says otherwise.

I also doubt the EFL would take a line that would increase the risk of Derby being liquidated, unless of course there really is a conspiracy against them.

Playing devils advocate, they shouldn’t favour Derby over 2 other members either.

[CyderInACan]

2 hours ago, Hxj said:

They are burning cash at around a £1 million a month

Yet we’re burning it at £400,000 a week! 

[chinapig]

10 minutes ago, Davefevs said:

Playing devils advocate, they shouldn’t favour Derby over 2 other members either.

Agreed, IF the 2 clubs concerned have a sustainable case.

[Hxj]

52 minutes ago, chinapig said:

I'm still puzzled as to what EFL rules and regulations (P&S or otherwise) the claims are founded on.

There is no specific regulation covering what is or is not a 'dispute' between the parties.

Regulation 95 states - available here - EFL Official Website - Section 9 – Arbitration:

Section 9 – Arbitration
95           Agreement to Arbitrate

95.1        Membership of The League shall constitute an agreement in writing between The League and Clubs and between each Club for the purposes of section 5 of the Arbitration Act:

95.1.1    to submit those disputes described out in Regulation 95.2 to final and binding arbitration in accordance with the provisions of the Arbitration Act and this Section of these Regulations;

95.1.2    that the seat of each such arbitration shall be in England and Wales;

95.1.3    that the issues in each such arbitration shall be decided in accordance with English law;

95.1.4    that no other system or mode of arbitration (including arbitration under Football Association Rules) will be invoked to resolve any such dispute.

95.2        The following disputes fall to be resolved under this Section of the Regulations:

95.2.1    subject to Regulation 95.3 below, disputes arising from a decision of The League or the Board (‘Board Disputes’);

95.2.2    Disciplinary Appeals;

95.2.3    ‘Force Majeure’ appeals pursuant to Regulation 12.3 (Sporting Sanction Appeal);

95.2.4    applications pursuant to Rule 6 of Appendix 3 (Appeal Application and/or Review Applications under the Owners’ and Directors’ Test);

95.2.5    other disputes between The League and Clubs and between each Club arising from these Regulations or otherwise (‘Other Disputes’), unless such disputes were dealt with by way of the following proceedings:

(a)           a Player Related Dispute Commission (or subsequent appeal to the League Appeals Committee (if any)); or

(b)           proceedings before the Professional Football Compensation Committee;

as the decisions of those bodies themselves are deemed to be final with no subsequent right of appeal or challenge.

There is clearly a dispute between the clubs arising 'otherwise' from the Regulations.  Despite that it has to go through the required procedures.  There are no provisions to enable the EFL to get involved until the Panel is set up, they can try and get involved if they so desire at that point as an 'interested party' (as Middlesbrough did in the Derby case).  I can't find the reference, but any amount ordered to be paid by the Panel is a 'Football Creditor'.

 

1 hour ago, chinapig said:

Any "debt" to Boro and Wycombe is hypothetical

But the 'dispute' is real.  Where, potentially £50 million, is involved then I would act with caution if I was the EFL.

 

1 hour ago, chinapig said:

I also doubt the EFL would take a line that would increase the risk of Derby being liquidated

This really is outside the EFL's control.

Then you have the complications of borrowing money to pay your bills.

Then you have the complications of HMRC.

And it goes on.

 

 

[chinapig]

9 minutes ago, Hxj said:

There is no specific regulation covering what is or is not a 'dispute' between the parties.

Regulation 95 states - available here - EFL Official Website - Section 9 – Arbitration:

Section 9 – Arbitration
95           Agreement to Arbitrate

95.1        Membership of The League shall constitute an agreement in writing between The League and Clubs and between each Club for the purposes of section 5 of the Arbitration Act:

95.1.1    to submit those disputes described out in Regulation 95.2 to final and binding arbitration in accordance with the provisions of the Arbitration Act and this Section of these Regulations;

95.1.2    that the seat of each such arbitration shall be in England and Wales;

95.1.3    that the issues in each such arbitration shall be decided in accordance with English law;

95.1.4    that no other system or mode of arbitration (including arbitration under Football Association Rules) will be invoked to resolve any such dispute.

95.2        The following disputes fall to be resolved under this Section of the Regulations:

95.2.1    subject to Regulation 95.3 below, disputes arising from a decision of The League or the Board (‘Board Disputes’);

95.2.2    Disciplinary Appeals;

95.2.3    ‘Force Majeure’ appeals pursuant to Regulation 12.3 (Sporting Sanction Appeal);

95.2.4    applications pursuant to Rule 6 of Appendix 3 (Appeal Application and/or Review Applications under the Owners’ and Directors’ Test);

95.2.5    other disputes between The League and Clubs and between each Club arising from these Regulations or otherwise (‘Other Disputes’), unless such disputes were dealt with by way of the following proceedings:

(a)           a Player Related Dispute Commission (or subsequent appeal to the League Appeals Committee (if any)); or

(b)           proceedings before the Professional Football Compensation Committee;

as the decisions of those bodies themselves are deemed to be final with no subsequent right of appeal or challenge.

There is clearly a dispute between the clubs arising 'otherwise' from the Regulations.  Despite that it has to go through the required procedures.  There are no provisions to enable the EFL to get involved until the Panel is set up, they can try and get involved if they so desire at that point as an 'interested party' (as Middlesbrough did in the Derby case).  I can't find the reference, but any amount ordered to be paid by the Panel is a 'Football Creditor'.

 

But the 'dispute' is real.  Where, potentially £50 million, is involved then I would act with caution if I was the EFL.

 

This really is outside the EFL's control.

Then you have the complications of borrowing money to pay your bills.

Then you have the complications of HMRC.

And it goes on.

 

 

Thanks, that is extremely helpful. I suppose a more accurate way of putting it is therefore that the EFL would want the 2 clubs defined as football creditors IF the claims are found in their favour.

The EFL has a dilemma. On the one hand Parry wants them to be seen to enforce the rules rigorously. On the other they would not want such a high profile club to go to the wall. Rather them than me!

Odds are that if Rooney says it's all the EFL's fault that's what most of the football media will report as anything else would require actual research. Why do that when you could be writing about what Ronaldo has said on social media and getting lots of clicks?

[Hxj]

7 minutes ago, chinapig said:

I suppose a more accurate way of putting it is therefore that the EFL would want the 2 clubs defined as football creditors IF the claims are found in their favour.

I would prefer - "I suppose a more accurate way of putting it is therefore that the 2 clubs will be football creditors IF the claims are found in their favour."

[Davefevs]

Seemed to be getting messy.

 

[Mr Popodopolous]

20 minutes ago, Davefevs said:

Seemed to be getting messy.

 

Thanks Dave. Did wonder how Derby turning down bids while in administration, combined with Rooney talking periodically about new signings would go down. The article by Percy below, not behind paywall.

https://uk.sports.yahoo.com/news/derby-set-row-efl-turning-184106197.html

A problem for Derby is that they as a club, well Mel mainly but by no means only him have burnt through goodwill at a major rate- and I would include a chunk of their fans in this regard.

In their situation it really isn't a good idea but seems that their behaviour patterns continue.

It seems unusual to say the least for a club in administration, let alone with a debt pile such as theirs, no accounts released for approaching 3 years to the public, with restated accounts ie restated accounts that have been audited to be submitted to their Governing body covering God knows how long to be outwardly and publicly rejecting bids for players!? These are due with the EFL by 5pm in 3 weeks time IIRC.

Isn't their deferred instalment for Bielik due this month too, Jozwiak also in February I believe.

[ExiledAjax]

18 minutes ago, Davefevs said:

Seemed to be getting messy.

 

Just on the transfer thing, to my mind there isn't an obligation on the administrators to accept any old offer. I said before, I think that if it's a genuine market value offer, for a player who is not crucial to the ability of the Club to field a matchday squad, then they can probably reject it without failing their duties. Right now Quantuma have a reasonable argument that by rejecting offers made now in the hope of receiving a higher one later in the window, they are actually acting more in the interests of creditors. Especially when you consider that whilst the over-riding duty is to act in the best interests of creditors as a whole, they have a duty as well to get the best price for an asset that they can.

There is a clock ticking on that though. The first is getting a deal done that satisfies creditors. IIRC from one of @Hxj's earlier post, this would realistically need to be agreed by this week if they are to hold the final creditor's meeting before the end of the transfer window and so escape administration before the second crunch comes.

If they are still in administration in those last few days of January, well then it's very hard for Quantuma to keep rejecting offers on the basis that 'we might get a better price'. There I suspect they are hoping that the team can get enough points this month (a maximum of 9 available) that they can argue to retain players because staying up is realistic (it isn't) and so it's actually in the longer term interest to keep better players and stay up. This second argument is very, very flimsy and although it might be made, I personally think it's bollocks.

I wonder if creditors might also start to put pressure on the Admins to sell if no big sales have happened and maybe the vultures clubs start to publically state what they are offering?

2 minutes ago, Mr Popodopolous said:

These are due with the EFL by 5pm in 3 weeks time IIRC.

Deadline is 16:00 on 31 January.

[Davefevs]

FWIW, I think Rooney should be keeping his gob shut, but I guess he’s playing a bit of a game too, which I don’t blame him for doing.

Do you wonder if we are one of the clubs bidding….LB Buchanan would solve some problems, especially on a “cheeky” (not ridiculous) bid?  Nige would know of both of them?  Forest appear to be after Buchanan, although they already have Max Lowe.

[Hxj]

The more I look at this the harder it is to see a solution.

There are too many issues to be solved and little time to do it in.

[Mr Popodopolous]

I suppose what @ExiledAjaxsays is true, no obligation on Derby/Quantuma to accept derisory bids as can argue in best interest of creditors not to etc. At the same time though, can see other clubs definitely lodging complaints over it as appears to be the case.

15 minutes ago, Davefevs said:

Do you wonder if we are one of the clubs bidding….LB Buchanan would solve some problems, especially on a “cheeky” (not ridiculous) bid?  Nige would know of both of them?  Forest appear to be after Buchanan, although they already have Max Lowe.

Possible! Nottingham Forest also known to have a keen interest. Still think DaSilva has attributes and time on his side but that's a different debate.

It mentioned Millwall bidding for Sibley in the article IIRC!? Surprising, think he is destined for bigger things with respect to Millwall etc.

5 minutes ago, Hxj said:

The more I look at this the harder it is to see a solution.

There are too many issues to be solved and little time to do it in.

If Derby miss the 4pm 31st January deadline for accounts to the EFL, do you think further trouble may follow?

[REDOXO]

2 minutes ago, Hxj said:

The more I look at this the harder it is to see a solution.

There are too many issues to be solved and little time to do it in.

That’s the way it seems to me. I will assume Mike Ashley and Gibbo are at least somewhat acquainted for obvious reasons as it appears Mr Gibson is pissed of enough to make him think twice and that’s before the Wycombe bloke gets really stuck in. 
 

Im getting worried for Derby

Edit: I’m not really! The supporters don’t deserve this but some of the drivel I have read and heard from them is mind boggling. I’m still trying to get my head around the forever Bristol City guest! Did he get that you can’t take back a recording. Bloody nonsense!