Derby County

[Hxj]

This from Andrew Bridgen MP sums up the position neatly - Looks like Quantuma need to do some reworking of their position.

 

[Davefevs]

9 minutes ago, Hxj said:

This from Andrew Bridgen MP sums up the position neatly - Looks like Quantuma need to do some reworking of their position.

 

Second time in a week he’s talked some sense, which adds up to twice in his life!

[Mr Popodopolous]

3 hours ago, Derby_Ram said:

Afternoon all

There's a few other clubs forums I enjoy reading - this one in particular - and huge amounts in this thread are accurate.

As a Derby fan it's been a sobering time recently and the reality is whilst a great escape would be something we'd look back on for ever most of us just want a club, our club, to support next season.

The one bit I would like to correct - or clarify - is the vast amount of Derby fans do accept that Mel Morris is the reason behind the mess and could fix all this in two strokes: paying the HMRC and indemnifying any new owner against any claim by Boro or Wycombe.

Yes, you do still get people on twitter or some message boards who think the sun shines out of his backside but to say all our ire is directed at the EFL and not him (or Stephen Pearce our CFO who is still employed during admin) is inaccurate. There are more chants and abuse aimed at those two at games than the EFL.

Where we have an issue with the EFL (or maybe it's with Quantuma) is that the EFL and admins are releasing contradictory stories and for us it's vital our MPs or some other entirely independent body so we can flush out the real position and what needs doing (assuming MM doesn't do the decent thing. If anyone knows where he is please do share!).

There is a distrust of the EFL amongst fans which I do think is fair based on past events but ultimately we just want to know how we break the impasse between EFL/admins and will fight and engage whoever we can to do it.

As a club we ****** up. Our owner ****** up and the vast majority of fans went along for the ride. We've been punished so far. We need to exit admin correctly which will entail further hardships. But above all we just want a club next season.

So yeah it's a cathartic experience reading the thread but please don't think that the fans at the game are blaming anyone other than MM for this. We are. We also know though that in his continued absence and abdication we need the support of the EFL to survive.

 

Afternoon and welcome. I hope Derby survive off the pitch- nice to hear a more balanced view.

DCFCFans is an interesting read though without having a go at you as you clearly have a more balanced position, some of the cognitive dissonance on there are astonishing if I'm honest and have been about these issues since they first arose...I don't want to tar all Derby fans with the same brush though and there are some posters whose finance stuff I enjoy reading on there too.

Are social media and DCFCFans an outsized minority then? There has been some blame attached on there yes but otoh plenty of disgraceful comments about Gibson eg too. I dunno perhaps the loudest voices get the biggest say.

Yes, there are contradictory stories- they are clearly at loggerheads.

I totally get the wanting to survive- and yes there is an impasse- you say there is a big distrust of the EFL but they have their own interests to uphold as well. Interests might be the wrong word but position- they can't be seen to be giving Derby preferential treatment in the sense of waiving certain regulations. They have to uphold spirit and letter I expect.

I should add too, some of the plans don't help- Nixon although it could have been poorly reported, suggested Appleby wants it heard at the CAS. That flies in the face of. all such disputes being heard via the EFL system..

I should also add, sorry to pile it on a bit but the way that Quantuma have acted- let alone Mel- hasn't really smacked of taking ownership. Okay they accepted the deductions but the cases to avoid were thin and time plus costly legal battles were not on Derby's side. Support of the EFL maybe needed but Mel and Quantuma as well as a sizeable minority- maybe an outsized one- have burnt an awful lot of goodwill IMO. In order to gain a certain level of support don't Derby need to be seeking to rebuild goodwill and trust with relevant parties?

I'll post bits of the relevant Regs later.

[Midred]

11 minutes ago, Davefevs said:

Second time in a week he’s talked some sense, which adds up to twice in his life!

He didn't include Morris putting his hand in his pocket?

[Mr Popodopolous]

Otoh, ******** like some below on this Twitter thread really test my sympathy- the question is are they an outsized minority?

Out of touch PL fans certainly seem more sympathetic than Championship fans who know the ins and outs a bit better.

 

Edited January 17, 2022 by Mr Popodopolous

[REDOXO]

1 hour ago, Derby_Ram said:

Personally my email to my MP did mention the Tracey Crouch review on the basis that having something relevant an MP could link it to would do no harm. Others have taken a different approach in that whilst that is vital, in the here-and-now it is a specific issue to fix with time of the essence. However you'll find that most fans are on board with it.

I think anyone can drive a horse and cart through the EFLs rules. MM did by selling the stadium to himself and then rules get updated post the event to close a loophole. I also don't believe the EFL have updated their own rules post the Corporate Insolvency and Governance Act and not everything within them fits the original purpose. I hate the prospect of a cross class cram down, and pray it becomes the last resort if the only alternative is liquidation, but if in the case the EFL blocks something a court has approved and other creditors support; what prevails? I don't want to go down that route but if further emphasises the need for an EFL which is fit for purpose.

To reply to the question of Wycombe - again the people I have sympathy for are the fans who haven't witnessed them in the Championship. As for the actual claim I personally don't have that much sympathy with it and feel we risk opening a Pandora's box: as a club we screwed up but a process got followed and we had our points deducted. This season. Did MM/Pearce mess around with delaying accounts? Yes. But also go back to the original EFL case which saw delays due to claims from of other clubs frivilous claims (Boro). So we cheated but not in a year WW were in the same division and our penalty was applied once due process had been followed. Impossible to prove but had we already have had points deducted I am sure last day of the season we'd have lost rather than scraping a draw. In that instance Wednesday would have stopped up so should they raise a claim too?!

Finally on the claims by other clubs - where does it stop? We lost in the Play-off final to QPR who failed FFP. Does this give Derby the right to recompense? Or Wigan who lost to QPR in the semi? What about the team that finished 7th and maybe could have got in the play-offs at QPRs expense? I don't know and for that reason primarily I personally think the club gets punished with their fines, pounts deductions, embargos or whatever but other clubs can't them claim. Whichever side of the fence you come down with on that on they'll be valid opposite viewpoints.

In summary
 

Yes Mel Morris did think he could drive a horse and cart through the rules (many many many of them) and avoid the consequences for as long as it took for a Derby County promotion. 
 

In order for Derby to remain in the EFL they must comply with the rules showing sustainability to the end of the season and the rules regarding claims against them regardless of what they need to comply with to emerge from insolvency! In theory Derby could emerge with new ownership but be expelled from the EFL for non compliance of their rules. The issues are separate but not unrelated. 
 

Derby County could have made a claim against QPR and tested FFP although the circumstances were different, they did not.

As stated earlier the issues surrounding Derby it’s accounts it’s buy back of ground it’s non payment of tax etc etc etc go back years. 
 

The issue is Mel Morris. Your club is likely to be paying for him for years and patience is now obviously very thin in some areas. 

[chinapig]

1 hour ago, Derby_Ram said:

Totally agree about the admins. Unfortunately not willing to face up to local media and answer questions. Would love them to be open as possible and answer but it's not forthcoming. I do think without the Boro/WW cases we'd have a preferred bidder in place even though that doesn't guarantee we'd end up sorting this it's the next step. Either way they're not covering themselves in glory at all and I feel for Rooney who has been fed a load of bull and still working wonders. But, where we are as a club now, what is easier to gain traction with media, MPs and other fans? Highlighting the EFL who every fan is aware of as opposed to a bunch of Admins who 99% of people in Derby couldn't name let alone anywhere else. When you're desperate you'll do whatever it takes to get someone to take note and the last couple of days it seems to be beginning.

 

Where do you want to start?!?!

I could point to peculiarities in the original case brought against us but you'd accuse me of it being part of a conspiracy!

I will use Derby as a case in point though. Do you trust them as fit for purpose for letting the situation go on as long as it did? Do you think they did everything in their powers to support Bury and Macclesfield? If so I'll hold my hands up :).

Thanks for the reply. I'd be interested in what peculiarities you mean nevertheless. There may be stuff I am unaware of after all.

I criticised the EFL in my previous post for dragging their feet, though Morris is still the one who wanted to delay as long as possible so is still the real culprit.

As to your wider point I am a long term critic of the EFL (some of my fellow posters think I am too mean to them) not least because they have allowed too many shysters to own clubs - Bury and Macclesfield indeed being cases in point.

My key criticism was allowing clubs to "sell" stadiums on a bogus basis to raise money to "live the dream" which was storing up trouble as Derby have found. Though I was interested to hear Rick Parry say recently that the Premier League insisted on that as a condition of their so called solidarity payments.

There have been improvements to the regs under Parry but the best hope lies with implementing as far as possible the recommendations of the Crouch review imo.

Edited January 17, 2022 by chinapig

[ExiledAjax]

2 hours ago, Derby_Ram said:

Personally my email to my MP did mention the Tracey Crouch review on the basis that having something relevant an MP could link it to would do no harm. Others have taken a different approach in that whilst that is vital, in the here-and-now it is a specific issue to fix with time of the essence. However you'll find that most fans are on board with it.

Excellent, thank you.

2 hours ago, Derby_Ram said:

I also don't believe the EFL have updated their own rules post the Corporate Insolvency and Governance Act and not everything within them fits the original purpose.

Are specific updates needed? Are you saying that the EFL Regs and EFL articles of association are not valid because they don't specifically mention the CIGA 2020? 

The CIGA 2020 makes amendments to the Insolvency Act 1986, and the definition of 'Insolvency Act' in the EFL's Regs (and articles of association) is "...the Insolvency Act 1986 and any statutory modification or reenactment thereof for the time being in force". So the definition can be said to include the relevant parts of the CIGA 2020 by reference, as that new Act includes statutory modifications to the IA 1986. Therefore for example the changes to Schedule B1 of the IA 1986, are actually already incorporated into the passages of the EFL Regs that refer to Schedule B1 (if relevant). Now of course a forensic analysis of the references and items within the EFL Regulations, and comparing those to the CIGA 2020, may show that further amendment is desirable, but I'll leave that to those lawyers who are paid to do that review. 

Ultimately Derby's stumbling block doesn't seem to be exiting administration, rather it is how to exit and simultaneously satisfy the EFL that you can still legitimately be a member of the EFL.

Edited January 17, 2022 by ExiledAjax

[Mr Popodopolous]

I might ask, when @Derby_Ram mentions peculiarities in the case, are you referring to? 

A) The notification of the 2nd charge about 2 years ago? I am pretty sure there was something in the original hearing about matters being open to review. Indeed with some FFP issues I'd argue that is the only sensible way- because they can be complex issues that take a lot of legal analysis 

B) The overturning of the 2nd Charge on Appeal and the order to restate? Could've been luck of the draw, some IDCs often are but accounting professionals have for a while queried Residual Value from an FRS 102 perspective.

On a side note, a general q to all. Is that 2nd bit ie the judgement that held Derby in breach of FRS 102 something that gives more grounds to sue than a mere overspend but otherwise compliant in every other respect?

Unless people have misquoted the guy, did Mel Morris not admit to holding back accounts? If he deliberately held back on putting in accounts in a timely manner, no accounts=no chance to fairly assess FFP compliance. Because it was a 2 part process:

1) Restate accounts on demand. Can be done quickly.

2) Assess restated accounts for an FFP breach, had Derby produced them quickly I think they go down last season.

I also should add, you probably don't want to hear it but unless it's been extended (again) the updated June orders remain in play and Derby are due to get the last 6 years worth of accounts, some restated some restated but seen for the first time to the EFL by 4pm 31st January 2022.

Bottom line is accounts if not already done within a fortnight for the last 6 seasons, and publish last seasons accounts if not at CH on the website by 31st March 2022, and presumably this seasons P&S numbers by end of February, start of March 2022.

Edited January 17, 2022 by Mr Popodopolous

[Davefevs]

A moot point now, but did Mel think minus 9 would threaten their hopes of staying in the Champ, therefore why not go the whole hog, take minus 12, and then start again in Lg1?

Because as it stands minus 9 would be a completely different ball-game!

[phantom]

The EFL have just released the following statement 

 

Further to a number of recent reports, social media comment and fan communication in relation to ongoing matters at Derby County Football Club, the EFL wishes to clarify its position on several points, which are addressed by way of a series of Questions and Answers with the EFL Chief Executive Trevor Birch.

 

1. What information does the EFL believe is currently outstanding from the Administrators, and why is it needed?

The EFL is taking proactive steps to work with the Administrators to find sensible solutions that will see the Club secure a long-term future and meet the requirements as set out in EFL Regulations and the League’s Insolvency Policy.  

In line with Article 4 of the Articles of Association, a Club is issued a Notice of Withdrawal when an insolvency event occurs, i.e., administration. The Article also grants the Board discretion as to whether to allow membership to continue and if so on what basis. 

Under administration, Clubs are given an opportunity to restructure their affairs and the EFL’s role is to preserve the integrity of the competition whilst also acknowledging the important roles Clubs play within their communities. 

Where the Club is served with the Notice of Withdrawal part-way through a playing season, the Club is required to continue to abide by the EFL Regulations, honour all tickets purchased (including season tickets) relating to the remainder of the season, and provide confirmation of funding to indicate sufficient resources to ensure the Club can complete its fixtures for the remainder of the season. 

On appointment the Administrators were unable to provide the confirmation of funding, but the EFL allowed the Club to continue whilst they sought to finalise their plans.  Their work has been funded in the interim through a combination of cost savings and external borrowing.  

We have revisited the funding requirements with the Administrators on a number of occasions since their appointment, and last week the EFL asked the Administrators for updated details on how the Club plans to continue to trade whilst in administration, including a funding plan that will enable it to complete the current season and all remaining fixtures in the 2021/22 campaign. 

The response was to highlight the specific figure Derby County needed in order to fulfil its fixture obligations for the remainder of 2021/22 and whilst potential funding options were tabled by the Administrators, they could not give the necessary assurances that the funding was guaranteed to enable the Club to finish the season. 

As a consequence, the League made the decision that the Club should not be permitted to register any new players until the necessary funding was in place. The deadline for provision of the funded plans was further extended to 1 February 2022.

 

2. Is there a deadline the Club and Administrators must work to?

The maximum period for any Club to remain in administration is 18 months and no Club is allowed to start more than one season in administration. As set out above, we have granted an additional extension for the provision of a funding plan through until the end of the current Season. This provides the Club with a further opportunity to demonstrate the necessary funding, and it has a number of options available to it (as do all Clubs), for example from a preferred bidder, further cost savings or player sales during the remainder of the January transfer window.   

 

3. What is the Insolvency Policy? 

No insolvent Club has an absolute right to continue in membership, and on entering insolvency a Club is served with a Notice of Withdrawal of the membership (currently suspended).  The EFL’s Insolvency Policy provides guidance on how the EFL will address issues that might arise with a Club in administration. The aims of the Policy are to try and ensure a continuation of a football Club, the settlement of all football debts and the satisfaction of creditors. If a buyer cannot be found who can meet the requirements for continued membership, then the Club may liquidate, and its membership withdrawn. The Policy provides discretion for the EFL Board as to how to deal with any particular Club and does not cover every eventuality. 

This reserves the right to review and amend the procedures for each individual case in line with the League’s Articles of Association and Regulations. 

Part of the League’s rationale for requiring the settlement of creditors is to preserve competition integrity. The Policy, and associated regulations, have been agreed by Clubs and seek to act as a disincentive to individuals from running Clubs in such a way that they gain a financial advantage over competitors and subsequently rely on insolvency legislation to compromise the unpaid debts incurred. 

 

4. What is the preferred bidder status situation? 

Throughout the administration process the EFL has engaged with the Administrators as they seek to market the Club for sale and identify any potential bidders who wish to buy the Club. 

Part of this process includes advising the Administrators in respect of the EFL’s requirements under the conditions of its Owners’ and Directors’ Test and the requirement for any potential owner to provide proof of future funding for two seasons.

The EFL has already met with two bidders alongside the Administrators but further notes their recent reference to a third bidder.

It is for the Administrators, and not the EFL, to determine which bidder they prefer to work with and seek to conclude an agreement with for the sale of the Club and who must then work to meet the EFL’s requirements under the Articles and Insolvency Policy.

The EFL has acted promptly and diligently throughout its dialogue with the Administrators but still awaits a further update from them as to the preferred bidder status. For confidentiality reasons, the League is unable to provide ongoing public comment on any potential interested parties and/or the status of any bid. 

 

5. Why has the EFL allowed Middlesbrough and Wycombe to threaten legal action against Derby County, and is this preventing the sale of the Club?

Middlesbrough FC commenced its claims against the Club over 12 months ago in arbitration proceedings, the framework for which is set out in EFL Regulations. The EFL is not a party to those proceedings and nor does it have a role in determining the outcome of them. As the arbitration proceedings are private and confidential, we are unable to provide any further detail.  

The EFL is aware that the Administrators have also received notice of claims from Wycombe Wanderers FC of a similar nature to those of Middlesbrough FC, but the EFL has not received full details of them.

The current situation remains challenging as Middlesbrough and Wycombe Wanderers consider their claims should be protected under the terms of the Insolvency Policy. The Administrators disagree. Further, as those claims are not yet determined the Administrators and bidders have no clarity on the size of any (if any) liability. That has implications for exiting administration, and ultimately the Club being able to retain its membership status. 

We are aware that Derby County consider the claims to be spurious, but despite this, the current bidders appear unwilling to assume the risk of defending them.  In contrast, Middlesbrough FC and Wycombe Wanderers consider the claims to have merit, and that their rights will be adversely affected if Derby County can extinguish or compromise the claims using the insolvency process.

The EFL is keen to try and resolve the current impasse. The EFL invited each of the Administrators, Middlesbrough FC, and Wycombe Wanderers to make submissions on this point last week, and we are now in the process of reviewing those submissions with a view to identifying a route to resolve the conflict which exists between the respective positions of, on the one hand, Derby County, and on the other Middlesbrough and Wycombe Wanderers.

 

6. Why doesn’t the EFL take a definitive decision on the issue?

As outlined above this is 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. The potential impact of a claim or indeed claims against the EFL would not only have direct effect on the League and the members involved but also the remainder of the membership given the way the EFL is constituted. To try and simplify what is a complex legal position is not simple or straightforward but we are committed to finding an appropriate solution and providing clarity on the issue as soon as possible. 

 

7. Is the EFL acting unlawfully?

To be clear, the EFL is not and would not, attempt to overrule ‘statutory law’. There is a clear difference of opinion between competing parties as to the correct application of our Articles and Insolvency Policy and that needs resolving. The fact that this is open to some interpretation means this process remains challenging, but the EFL is working to achieve clarity as quickly as possible. For the avoidance of any doubt the League is not making any attempts to block any sale of Derby County, but instead attempting to do the right thing by all parties.

 

8. Is there a conflict of interest at EFL Board level? What involvement do all Board members have in decisions relating to Derby County?

Any EFL Board members conflicted on any matter do not take part in any discussion and are asked to leave the meeting. In addition, any Director who is conflicted does not receive any board papers in respect of the conflicted matter. The position on whether any director is conflicted is reviewed on a meeting-by-meeting basis. At present there are two Board Directors conflicted in respect of the matter with Derby County and as such do not participate or engage in any of the decisions. 

 

9. Why is the Club unable to sign players in the transfer window?

Given the uncertainty around future funding, the League has advised that no extensions or new player registrations will be permitted, and this position had already been communicated to the Club prior to the Administrator’s latest statement on Friday 14 January. The EFL will continue to work with the Club as it updates its forecasts.

 

10. What is the EFL doing to support Derby County and its supporters through the current process?

Suggestions the EFL want Derby County relegated or expelled are completely fabricated and entirely false. The EFL continues to advise the Club and its Administrators in respect of all current requirements. This includes the Administrator’s obligations in respect of a funding plan and providing all necessary clarity on the credibility of any potential investors in the context of its regulations. The EFL understands it continues to be a challenging and worrying period for everybody associated with Derby County, especially the staff and supporters, and it is our intention to continue to work proactively with the Administrators and relevant stakeholders to find a process which will give clarity quickly. 

 

11. Does the EFL have a vendetta against Derby County?

The EFL has no vendetta against any of its member Clubs. The role of the League is to act in accordance with its rules, and to seek to find solutions in respect of this regulatory framework. For example, The League is required to obtain the necessary information, specifically that is outlined in its Insolvency Policy in respect of Derby County’s potential exit from administration, to ensure parity and a level playing field for all its members. It is understood that Derby County fans will be concerned at developments at their Club, but equally the League must consider the interests of all other Clubs. Clearly there is a balance between investment into our Clubs and not stifling ambition, but that cannot be at any cost. That is why financial rules are in place that all Clubs agree to, and the EFL are tasked with upholding and sanctioning any breaches. It is also worth clarifying that, regarding the sporting sanctions which were imposed this season, 12 points were deducted as consequence of the Club itself appointing Administrators. A further 9 points were agreed with the Club, by way of an Agreed Decision which was ratified by an Independent Disciplinary Commission Chair as per the requirements of the  EFL Regulations after the Club admitted to breaches of the EFL’s P&S rules.

[Davefevs]

Just saw it on twitter.

Only one side of the story, but explains the Wycombe / Boro stuff well.

[ExiledAjax]

1 hour ago, phantom said:

The current situation remains challenging as Middlesbrough and Wycombe Wanderers consider their claims should be protected under the terms of the Insolvency Policy. The Administrators disagree. Further, as those claims are not yet determined the Administrators and bidders have no clarity on the size of any (if any) liability. That has implications for exiting administration, and ultimately the Club being able to retain its membership status. 

We are aware that Derby County consider the claims to be spurious, but despite this, the current bidders appear unwilling to assume the risk of defending them.  In contrast, Middlesbrough FC and Wycombe Wanderers consider the claims to have merit, and that their rights will be adversely affected if Derby County can extinguish or compromise the claims using the insolvency process.

This answered my main outstanding question. I couldn't see how an unresolved pending claim could be considered to come under the definition of "Football Creditor". The definition states that to be an FC a payment must be "due", and a pending, unresolved claim is only a potential payment, not one that is due.

Essentially it seems that the EFL don't want a situation where Derby exit Admin, the Boro claim is successful, and there's then questions over whether all "Football Crditors" are/were being paid. I suspect no bidder wants that either. 

It's arguable, and therefore is being argued.

Doesn't change my view that indemnities underwritten by insurance or some other form of guarantee (cough *Mel Morris* cough) are the commercial solution.

1 hour ago, phantom said:

11. Does the EFL have a vendetta against Derby County?

Ps. I cannot believe they even entertained or answered this one.

[chinapig]

The Guardian reports that there will be three urgent questions in the Commons starting at 12.30pm: on the role of the military dealing with Channel crossings; on fraud in coronavirus grant schemes; and on Derby County Football Club.

[Hxj]

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.

Edited January 18, 2022 by Hxj

[ExiledAjax]

9 minutes ago, Hxj said:

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.

When put like that...they really do have Derby bent over a barrel.

10 minutes ago, Hxj said:

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.

And yeh, putting the boot firmly in Q as well.

[1960maaan]

Those claims are interesting.

Derby cheated and cost M'boro a playoff place, potentially £m's. They Cheated and prevented Wycombe a chance of staying up, potentially £m's.

With that hanging over the Club, you can understand a but of hesitance on the new , or potential owners , to go ahead. You can see why Administrators say the  case has no merit, trying to get the deal done. What would happen if the Deal went through , and the case went M'boro & Wycombe's way. Would the New Co have any comeback with the Admin, would it count as being mislead in the deal, and could they seek redress? 

Seems some very dodgy ground.

[Yellow&Blue&Red]

Quantuma have really screwed this! By taking the debate public, they've invited MFC to rebut them in public. That PR from MFC looks more credible than any presentation I've seen before and undermines the arguments they've made to potential buyers (and their reputation with those buyers) that the claim has no merit. And makes a deal less likely.

The EFL's statement earlier makes clear that there are two serious bidders when Quantuma have said 3. Either one of them is only at a preliminary stage, or they're exagerating the level of interest. Either way, they're being caught-out in public and the price competition that they're trying to stimulate is further undermined.

Can anyone estimate the value of this work to Quantuma? Very roughly obviously. And I read - perhaps here - that other firms had turned the work down. Beyond reputational damage, is there some risk to Quantuma?

[Midred]

15 hours ago, ExiledAjax said:

This answered my main outstanding question. I couldn't see how an unresolved pending claim could be considered to come under the definition of "Football Creditor". The definition states that to be an FC a payment must be "due", and a pending, unresolved claim is only a potential payment, not one that is due.

Essentially it seems that the EFL don't want a situation where Derby exit Admin, the Boro claim is successful, and there's then questions over whether all "Football Crditors" are/were being paid. I suspect no bidder wants that either. 

It's arguable, and therefore is being argued.

Doesn't change my view that indemnities underwritten by insurance or some other form of guarantee (cough *Mel Morris* cough) are the commercial solution.

Ps. I cannot believe they even entertained or answered this one.

The efl could have deducted a point from Derby who would have been relegated and Wycombe would have been one less problem to them. Embarrassment catching up with the efl for not dealing with this sooner.

[ExiledAjax]

25 minutes ago, 1960maaan said:

Those claims are interesting.

Derby cheated and cost M'boro a playoff place, potentially £m's. They Cheated and prevented Wycombe a chance of staying up, potentially £m's.

With that hanging over the Club, you can understand a but of hesitance on the new , or potential owners , to go ahead. You can see why Administrators say the  case has no merit, trying to get the deal done. What would happen if the Deal went through , and the case went M'boro & Wycombe's way. Would the New Co have any comeback with the Admin, would it count as being mislead in the deal, and could they seek redress? 

Seems some very dodgy ground.

This is why you have the indemnities within the agreement that covers the sale of the Club. Essentially the sellers make promises about the state of the Company, these are called warranties. One such warranty might be that "The Company does not have any outstanding claims against it."

In this case this is untrue, and so the sellers make what is called a disclosure against that warranty. They explain to the buyer that in fact there are claims outstanding, and they give as much detail as they can. In doing so they make the buyer fully aware of the risk that they are taking on.

The buyer then says "oh interesting, well I'd like some protection against that". And so we get to an indemnity. In basic terms the indemnity says that if the claim succeeds, the buyer can come back to the seller and reclaim the costs of paying the final award to Boro and WW. So it keeps the old owner on the hook for issues that happened on their watch, but also allows the company to be sold and for the buyer to take it forward. Indemnities can cover the entire amount, or part of the amount, or have a cap. They can also have a lower limit or threshold, beneath which the buyer bears the costs - a bit like an insurance excess. They are flexible and can be tailored to the risk at hand. There will often be a general indemnity to cover anything that might come up, but you can have specific ones tailored to specific risks as well.

So in answer to your question "Would the New Co [the buyer] have any comeback with the Admin, would it count as being mislead in the deal, and could they seek redress?", no they wouldn't be misled in this case, but yes they would be able to seek redress, under the terms of the sale agreement.

What is happening here is that the Admins are struggling to agree that indemnity. No one wants to be on the hook for up to 40m. MFC's point is that if there's no risk of the claim succeeding, you can give the indemnity. The Admins say we don't need to give it as there's no risk of it succeeding. It's a classic argument around risks like this, and normally it ends up with a compromise - either the risk is taken out prior to the sale, or a carefully worded indemnity is put in place.

Edited January 18, 2022 by ExiledAjax

[Mr Popodopolous]

35 minutes ago, Midred said:

The efl could have deducted a point from Derby who would have been relegated and Wycombe would have been one less problem to them. Embarrassment catching up with the efl for not dealing with this sooner.

2 pts- Derby would have survived on GD IIRC with a 1 point deduction.

I might also add, Derby might have delayed submission of the updated numbers and as I said at the time on the FFP thread, no accurately restated numbers=no possibility to deduct points for FFP.

Independent Panel who decided a £100k fine was suitable for the accounting breach, plus of course the far more significant order to restate the accounts- Derby dragged this out for as long as possible.

[Mr Popodopolous]

Wonder if that is a certain David from DCFCFans??

Simon Jordan puts him right anyway.

Edited January 18, 2022 by Mr Popodopolous

[ExiledAjax]

Pauline Latham MP (Con, Mid Derbyshire) asked an urgent question in the House of Commons on Tuesday 18 January: "To ask the Secretary of State for Digital, Culture, Media and Sport if she will make a statement on matters of EFL (English Football League) governance surrounding the administration of Derby County FC."

An interesting chat, but broadly a load of hot air imo. A few MPs (mainly the members of the DCMS Committee such as Julian Knight and Clive Efford) seem to appreciate the nuances and the technicalities involved - the rub between legislation and the EFL regulations for example, or the struggle with the WW and Boro claims. 

I'm skeptical of any MP for Derby here. They are there to rep their constituents, and they should do so.  It's also obviously a piss-easy vote winner to stand up for the Club, and to regurgitate the arguments that fans and Quantuma have against the EFL. Doing the opposite would potentially cost them many votes, and a bucket load of PR, in their constituencies. Latham, Beckett, and the other Derby MPs certainly fall into that category.

However, the calls to give Derby leniency based on their history (league founders etc) are in my opinion superficial and should carry no weight at all. Nothing in the rules says that this is something that can or should be done. Just because a club won silverware once doesn't mean they should be treated preferably. Pompey were recent FA Cup winners when they went down. It happens.

Ultimately, it isn't part of the EFL's remit to 'protect' clubs. They run the competition that the clubs compete in, and work to ensure that the competition has integrity and legitimacy, but clubs are not franchises granted by the EFL, they are run by their owners as companies. The Bury MP speaks passionately, and I support and agree with much of what he says, but it is simply not the job of the EFL to bail clubs out or to save them for the sake of their communities.

The guy who picks out the WW and Boro claims gets it though. The answer is good as well, that a pragmatic answer should and can be found. But it is commercial, and is between Derby and Boro, or Derby and WW. It is not for the EFL to dictate the terms of that answer. Asking for that is mental, Derby fans seem to want the EFL to both simultaneously leave them alone, but also broker a solution. In general there seems to be some confusion over the role, responsibilities, and remit of the EFL in this matter.

Ultimately all the MPs can really do is put pressure on the parties to sort stuff. 

The whole thing is laced through with tangential discussions around the Fan Led Review. In fact it is used to deflect certain questions with "that will be addressed by the Review". It is interesting that Crouch met with Morris 'towards the end of the Review period' - so some time in mid 2021 I presume, and he reckoned that had a regulator been in place, Derby would be in a different situation.

Furthermore the Gov state they are working 'at pace' on it, and 'endorse in principal the implementation of the regulator'. They want to 'legislate as quickly as they can'. Labour pressing for faster movement on the matter - some point there given it's been nearly two months since publication and we've got no formal or detailed government response. It's not dead in the water.

Edited January 18, 2022 by ExiledAjax

[Davefevs]

 

Edited January 18, 2022 by Davefevs

[ExiledAjax]

3 minutes ago, Davefevs said:

 

Er...surely turning down the assured finance is the same as holding out?

Pedantry aside, they surely have to accept this at this point.

[Bristol Rob]

7 minutes ago, ExiledAjax said:

Er...surely turning down the assured finance is the same as holding out?

Pedantry aside, they surely have to accept this at this point.

Would it depend on if the offer was in cash, or paid in installments?

[Mr Popodopolous]

Nixon.

I do hope HMRC are not offering them a discount? Derby would certainly like it to be that way of course.

Time to pay could be okay provided no discount to the overall amount due.

Edited January 18, 2022 by Mr Popodopolous

[REDOXO]

1 hour ago, ExiledAjax said:

This is why you have the indemnities within the agreement that covers the sale of the Club. Essentially the sellers make promises about the state of the Company, these are called warranties. One such warranty might be that "The Company does not have any outstanding claims against it."

In this case this is untrue, and so the sellers make what is called a disclosure against that warranty. They explain to the buyer that in fact there are claims outstanding, and they give as much detail as they can. In doing so they make the buyer fully aware of the risk that they are taking on.

The buyer then says "oh interesting, well I'd like some protection against that". And so we get to an indemnity. In basic terms the indemnity says that if the claim succeeds, the buyer can come back to the seller and reclaim the costs of paying the final award to Boro and WW. So it keeps the old owner on the hook for issues that happened on their watch, but also allows the company to be sold and for the buyer to take it forward. Indemnities can cover the entire amount, or part of the amount, or have a cap. They can also have a lower limit or threshold, beneath which the buyer bears the costs - a bit like an insurance excess. They are flexible and can be tailored to the risk at hand. There will often be a general indemnity to cover anything that might come up, but you can have specific ones tailored to specific risks as well.

So in answer to your question "Would the New Co [the buyer] have any comeback with the Admin, would it count as being mislead in the deal, and could they seek redress?", no they wouldn't be misled in this case, but yes they would be able to seek redress, under the terms of the sale agreement.

What is happening here is that the Admins are struggling to agree that indemnity. No one wants to be on the hook for up to 40m. MFC's point is that if there's no risk of the claim succeeding, you can give the indemnity. The Admins say we don't need to give it as there's no risk of it succeeding. It's a classic argument around risks like this, and normally it ends up with a compromise - either the risk is taken out prior to the sale, or a carefully worded indemnity is put in place.

Yes you are correct. However the sale revenue raised in this case is likely to be nominal. Most money spent will be in paying off debt. Mel Morris in no way will indemnify Derby against the claims of Boro and WWFC out of his own pocket thus an impasse is reached with the sale agreement with all party’s 
 

The administrators have blown this big time. They want it both ways. Either the claim is valid and must be taken into consideration or it’s spurious and should not. They can’t scream both things simultaneously. 
 

Also In this case if the Boro action had been dealt with by Derby in the proper timeframe we would nor be here now. Particularly if Middlesbrough had lost as that would almost certainly put off Wycombe. 

Clock is ticking louder each day and if I were Gibson or Wycombe I would not back down. As the wise man said “there ain’t nothing more sophisticated than leverage”

 

[AnotherDerbyFan]

2 hours ago, 1960maaan said:

Those claims are interesting.

Derby cheated and cost M'boro a playoff place, potentially £m's. They Cheated and prevented Wycombe a chance of staying up, potentially £m's.

With that hanging over the Club, you can understand a but of hesitance on the new , or potential owners , to go ahead. You can see why Administrators say the  case has no merit, trying to get the deal done. What would happen if the Deal went through , and the case went M'boro & Wycombe's way. Would the New Co have any comeback with the Admin, would it count as being mislead in the deal, and could they seek redress? 

Seems some very dodgy ground.

Bristol City have as good, if not better claim than Boro, considering we beat in you in the run in, pretty much ending your Playoff hopes. If you won that game, you would have finished 6th.

[Mr Popodopolous]

7 minutes ago, AnotherDerbyFan said:

Bristol City have as good, if not better claim than Boro, considering we beat in you in the run in, pretty much ending your Playoff hopes. If you won that game, you would have finished 6th.

I've never really considered us to have had a claim given we finished 8th.