The unofficial AFC Rushden & Diamonds messageboard

That's the idea Bob but I was thinking more along the lines of....

http://www.youtube.com/watch?v=5uFarFM9sow

http://www.youtube.com/watch?v=7L2O4qL_-lg

luckyfour wrote: I am starting to think the Ladaks been had by KC and has him by the balls over the lease, hence the reason he doesn't want to leave NP.

If Ladak is the guarantor in the lease documents then that's the only reason why he's returned, removed Jeune from the Chairmainship and scuppered any plans to ground share with CTFC at Steel Park.
There is no way he wants to be left holding the baby.

So if no football was played at Nene Park in 2013/14 and if a certain level which was required (ie no pub football) wasn't meet would the ground and land really revert back to Griggs?

I'm sure KC could get around this but it would be funny if he had to pop up into Higham Ferrers and post the keys through Max's door!

luckyfour wrote:There is no way he wants to be left holding the baby.

If the K*ttering fans had any balls, which they don't, this is exactly what they should do.

Stalin wrote:

Uhm could that have anything to do with KC and CH needing football to be played at NP until 2015 failing which the ground returns to Max?

Is that right?

I don't think Pressman's got that quite right about the ground returning back to Max. The 2015 date relates to the expiry of the infamous 'claw back' clause (on value) in the event of development/land selloff within 10 years of the ground being orginally passed to the RDFC Trust in 2005.

Stalin wrote:

luckyfour wrote:There is no way he wants to be left holding the baby.

If the K*ttering fans had any balls, which they don't, this is exactly what they should do.

Problem is the fans can't move KTFC to another ground because Ladak holds the registration of the football club with the FA.

and funnily enough it all kicks off once it's too late to enter a new team into any senior league (sound familiar) Shame they can't just leave Ladak at NP holding the registration whilst the fans and RJ move to Corby and start afresh.

Trek wrote:

Stalin wrote:

Uhm could that have anything to do with KC and CH needing football to be played at NP until 2015 failing which the ground returns to Max?

Is that right?

I don't think Pressman's got that quite right about the ground returning back to Max. The 2015 date relates to the expiry of the infamous 'claw back' clause (on value) in the event of development/land selloff within 10 years of the ground being orginally passed to the RDFC Trust in 2005.

The covenant and the clawback are two separate things, with the covenant relating to the Stadium and the claw-back to the complex. I've copied an extract from a briefing the RDFC Trust gave the fans at the start of 2007.

In November, after months of negotiation, we signed an agreement with Keith Cousins whereby a loan of £512k would be made available to the Club.

So what does this mean?

Following our takeover of the club there was an urgent need to introduce a better policy of financial management at the club. This included cutting overheads as a means of staving off effective bankruptcy and therefore the potential closure of the club.

Poor results on the pitch inevitably lead to reductions in both gate receipts and commercial income. Despite this, over the period of the Trust’s ownership significant cost savings have been made with operating losses now having been reduced by over £1m.

Great news? – well, yes it is but it has simply not been enough with operating losses at the club at the time of the loan being made available still exceeding £400k per annum.

From the start we had been unable to raise funds on the open market or to even obtain an overdraft. The future use of Nene Park is restricted by covenant making the land itself unsuitable for industrial or residential development. In the eyes of commercial banks and financial institutions what we saw as being assets – the facilities at the Nene Park complex - were in fact effectively worthless and therefore could not be used as security for a loan.

Worse still, being so expensive to maintain and operate, the Nene Park facilities actually represented a liability rather than an asset unless the use of the facilities could be maximised so as to generate greater income. While this was our aim we were also restricted in some important areas by those same clauses imposed on us under the terms of the original agreement.

It became apparent quite early on that we would need to find some additional investment if we were to survive. This became even more important as the additional funding (£750k) made available by the Griggs Group came to an end. It was whilst we searched for a suitable investor that the full affects of those clauses in the original agreement surfaced and effectively placed the whole future of the club in doubt.

So what were those clauses?

I think everyone was aware that the Griggs Group had made it public that it wanted to see football played at Nene Park into the future. They therefore inserted a clause in the agreement to that effect. This was to ensure that we, or any future investor, could not simply close down the football club, demolish the facilities and build on the land. I think everyone would applaud this approach.

Indeed through covenant, the land is reserved for community use. This is also confirmed by the local area plan which similarly restricts the future use of the land.

This in itself would be good news. However the real problem comes with a clause in the agreement which takes effect in the event of any ‘development’ of the land or facilities at Nene Park. This would result, under the terms of that agreement, in a substantial payment having to be made to the Griggs Group.

This ‘claw back’ might be seen by some as being in keeping with the principles of the transfer. Indeed it was fully accepted by all parties that if we were to generate the additional income necessary to sustain the football club, we would have to make full use of all available land to create additional commercial facilities.

We had already identified a new fast food restaurant and a hotel as being ideal developments on the site and indeed had already held positive discussions with East Northants District Council about gaining planning permission for such developments.

We had originally been led to believe that the described ‘claw back’ – which would require us to pay 50% of the asset value to the Griggs Group – would only come into effect as individual developments were completed. This would require us to pay to the Griggs Group 50% of the value of that individual development and would have allowed us to stage the development of the site over a period of time.

However, we were shocked to find that DEVELOPMENT OF ANY PART OF THE SITE would trigger the entire ‘claw back’ clause. This would require us under the terms of the agreement to pay immediately to the Griggs Group 50% of the value of the TOTAL site – an amount in excess of £3 million. The calculation of this amount being based upon the value of the land for residential development despite the fact that such development is not permitted through the existence of the covenant and the development restrictions placed upon it.

The Trust Board and the Club Board are currently reviewing their position as to whether they received proper legal advice from their advisors at the time of the takeover in respect of this clause. It is therefore inappropriate to comment further at this time. However, in this format, this clause makes it impossible for any third-party development of the site to take place before the effects of the ‘claw back’ clause runs out in 2013.

Without the additional income from further development, it is highly unlikely that football would have been able to continue at Nene Park in the foreseeable future. Indeed it became apparent that without any future sources of income, and even with those significant reductions in operating costs over recent months, the effect of this clause in particular would be to see the club going into administration before Christmas 2006.

Not only are these clauses a problem for the Trust, they also have the effect of putting off potential investors. We can only assume these may have affected the ability of the Griggs Group to successfully sell the club two years ago. Indeed it was this clause that lengthened the negotiations with Keith last autumn.

How did we choose Keith?

We made it clear in our letter to you all last November, and in the FAQs we issued at that time, that the Board had been very careful in its selection of any potential future investor. We had set ourselves a strict criterion for any potential partners as we were intent upon ensuring football was played at Nene Park for many years to come as well as in securing additional funds for future investment.

In setting those criteria we were looking for someone with an established track record and, just as importantly, a clear appreciation of football.

We also needed someone with the necessary expertise to develop our facilities as a means of maximising both development potential and future income from the site. This therefore also needed to be someone with access to the necessary additional finance so as to ensure those developments could be made to happen.

You will not be surprised to hear that we held discussions with a number of potential investors last year. Some had previously approached the Griggs Group at the time of the original sale but had been put off by the huge operating losses at the time. Others were clearly only interested in the development potential of the site - as they saw it - and were therefore hardly likely to turn out to be ideal partners.

The need to identify an ‘ideal partner’ centred on the fact that had we at some point entered administration, we would then have lost control of the ownership of the lease to Nene Park. As a consequence of that, we would also have lost control of who could actually play at Nene Park. This could have led to the possibility of further team mergers in the future – a fact most certainly not lost on some of our local competitors who, in various guises or intermediaries, also quickly made contact with us.

As time progressed we held more in depth discussions with a smaller number of potential investors capable of meeting our criteria. Keith Cousins was clearly one of those and we were pleased to complete an agreement with him in November of last year that resulted in him, effectively, loaning the club over £500k.

We shared many of the same plans for the development of the site with Keith and firmly believe, from undertakings given to us, that he is the ideal candidate to take the club forward.

His ambitious plans for the club and for the site will both enhance our commercial facilities and support the football club into the future. Many people have now had the opportunity of meeting Keith and I’m sure you will all be keen to see him and Graham on Monday to see what the future holds for Rushden and Diamonds FC.

What does the deal entail?

As we have already made clear, Keith - through one of his companies - has loaned the club just over £500k under the terms of an agreement signed in November last year. Under the principal terms of the deal Keith, as the sole investor, has assumed control of the football club as Chairman. He has also appointed a new board of directors and appointed Helen Thompson as Chief Executive. All the Trust nominated football club directors resigned their positions when the deal was completed.

In the agreement Keith’s company assumes responsibility for all ongoing liabilities as of the date of the agreement. In addition it is explicitly stated that our agreement will “permit Rushden and Diamonds football club to continue to play football at Nene Park….” and to “….use the ancillary facilities at the property or to provide alternative premises therefore as may be approved by the Football Association”.

In addition the trust will have the right to appoint two non-voting members to the Club’s Executive Committee.

Currently the land remains under the ownership of the Trust.

The principle behind the Trust Board’s future proposals will be to aim to create a new trust into which all existing members will transfer but with the exception of those members nominated by Keith Cousins who will remain in the existing trust.
Also effectively remaining with the existing trust will be the land at Nene Park. This will mean that through the Trust, Keith will control the associated facilities and land with the existing covenants and claw back clauses still in place. It will then be up to Keith to negotiate with the Griggs Group over the effects and legality of the claw back clauses.

We believe this provides us with the best chance of doing what we set out to do when the Trust was formed – to secure the long-term interests of the football club. Therefore, the Trust Board has agreed to put this to a vote of all trust members.

Biggles wrote:I see Sadact as just a fool who was blinded by the Glittering chandeliers of Nene Park and signed up to a Lease that was all in Favour of KC such was his desperation to move in. I don't believe for a minute he was standing up for us as he wanted us gone so he could move in, i can see him on the day he got the keys having orgasms in the Boardroom thinking he was clever, the only clever person was KC getting the muppet to Sign a Lease that would kill KTFC.

You know what, I now think that Cousins is extremely clever if not even more evil. I might be giving him too much credit but here is what I am thinking.

I think there is a 25 year lease with no break clause. This is the genius thing. I think he insisted on that length! I think he probably even sold it to Ladak as a "great asset" or something to increase the desirability of the club. I'm just trying to understand if Rolls is in on it or the patsy set up to take the financial fall (like the Beasants who cleared the way for this whole thing).

Cousins' scenarios financially are:
1. KTFC continue to survive in Nene Park with no desire to agree to move out for 25 years (never going to happen IMO). Cousins gets £150k a year (if this figure is correct), for 25 years. Total payout of £3.75m. Not too shabby. Of course there is tax and a lot of other stuff such as maintainance which falls under the landlord's responsibility to take out. Probably a profit on the order of £1m+ though. He (or his family/buisness partners bearing in mind it's 25 years away!) then cash in on the land however it is planned to do it.

2. KTFC go under now. He has to pull whatever other card he has up his sleeve (letting some combination club use the pitch for free? Something like that) to keep the stadium under whatever the actual terms of the covenant are. (Bearing in mind a. he is a lawyer and knows what he can and can't do and b. very few people appear to have seen it and know if he is breaking it or not!). Here's the good part - because Ladak signed the lease agreement not only through the buisness but as guarantor he is liable for rent from the stadium. I am not in property (or any kind of) law so can't tell you if that would be 1 years rent, 5 years rent, or the full duration of the lease. He then cashes in on the land however he plans to do it.

3. KTFC struggle on for a bit. They continue to scrabble together money here and there through whatever means, and service payments, many of which are late. Cousins gives them all the required legal warnings and terminates the lease at a point that suits him and then cashes in on the land however he plans to do it, or agrees to let them move our when he's had enough of the rent payments and wants to develop.

bonus option 4 - a mixture of 2 and 3, KTFC go bust at a time convenient for Cousins (or he hangs on until they do go bust), he get the payout from the guarantor of the rent (presumably still Ladak) and gets to develop the land with no headaches.

double bonus option 5 - almost everybody wins. KTFC is forced into administration at some point. Benevolent fan/local buisnessman/familiar name pops up and buys them from and administrator, possibly with a CVA. Said person(s) don't buy the rental agreement as an asset. Ladak is left holding the pieces as Cousins takes his money. KTFC are allowed to leave Nene Park in their current guise (though what level of football they are playing at if they go through another CVA is a different matter), and set up shop somewhere else. With no problems from the lease.

All of them end the same way. I have no doubt he will keep hold of the site even if they go under. He'll find a way.

To be fair you've got to take your hat off to him. He's going to make a fortune.

Ladak has just missed his way out by stopping Jeune's breaking of the lease through apparently legally correct means. And you can bet anything that Cousins won't let that situation arise again (unless it is convenient). Even if that does happen all he has to do is pull out whatever card he is holding. And I'm sure he's got one. Though I'd love it if KTFC got out (battered and bruised as they are, but I'm happy enough for them not to go under) and somehow the complex reverted back to the Griggs group. It'll never happen though.

I find it very unlikely anyone with an ounce of sense will buy KTFC now from Ladak with the lease as it is (I'd guess most SLP clubs don't even have a net turnover of £150k let alone covering all their other costs).

The other confusion regarding covenants may relate to what Cousins referred to as a covenant at a Fans Forum, but which was subsequently invalidated when RDFC went bust - this was discussed in another Trust Statement a few days later, after the Griggs Group had rubbished a lot of what had previously been said :-

"8. The agreement we reached with Mr Cousins’ company contains some important clauses.
The first is:
“Conalgen (Mr Cousins’ company) agrees that it shall permit Rushden and Diamonds football club to continue to play football at the football ground and to use the ancillary facilities at the Property or to provide alternative facilities as may be approved by the Football Association”.
This is stronger than the covenant in favour of the Griggs Group that is discussed above because it provides for Rushden and Diamonds to play football at the ground. But taken with the Griggs covenant it provides very real security for the Club. However, it also recognises the wisdom of the saying “never say never”. There will always be circumstances in which it will be right to move the club to a different location. A good example is the problems being faced by Scarborough where the existence of a covenant on the land originally placed at the Club’s request is now threatening their existence by restricting their ability to sell the existing ground and move to a new one.
"