We will go into administration

All things unofficial about AFC Rushden & Diamonds and general football talk.
Biggles
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Re: We will go into administration

Post by Biggles »

Considering if what has been said prior about KC still owning the land etc then a normal Administration would not be in the Beasents interest as they would lose everything and a appointed Administrator would have no assets to sell the club to any other person so it would be straight into liquidation as the courts would see no purpose to keep the Club Going without assets.

On the other hand a prepacked Administration would be perfect for the Beasents, this of course maybe what the talks mentioned in the Club statements have been about, talks with a Insolvancy company to clear debts and the Beasents to keep control.

Now this has to be arranged and has to go to the courts but the spector of HMRC hangs arround who may try to block any arrangement and any CVA, being a cynic and i'm not saying this is happening but to make sure you control the CVA you must have a majority of debtors willing to agree a small settlement in the pound so hey presto massive Debt appears making our biggest debtors not the HMRC.
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Formic
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Re: We will go into administration

Post by Formic »

There's a useful discussion here - http://footballmanagement.wordpress.com ... bury-city/

With Appendix E appearing to have been replaced by Rule 14 (specifically Rule 14b), the situation may now be different to the one Salisbury faced. The rules were quoted on another forum, and I've pasted this below, but haven't been able to validate they are correct.

14 INSOLVENCY PROVISIONS

14.A SPORTING SANCTIONS
14.1.A If an Insolvency Event shall occur in relation to any Club that Club shall be deducted 10 points. The deduction shall be made forthwith on the happening of the first Insolvency Event.
14.A.2 Where a Club takes or suffers an Insolvency Event:
14.A.2.1 during the Normal Playing Season but prior to 5:00 p.m. on the fourth Thursday in March, the point’s deduction shall apply immediately;
14.A.2.2 during the Normal Playing Season but after 5:00 p.m. on the fourth Thursday In March then Rule 14.A.3 shall apply; and
14.A.2.3 outside the Normal Playing Season, the point’s deduction shall apply in respect of the following Season such that the Club starts that Season on minus 10 points (including a Club or Clubs Relegated from the Football League, where such Club shall be subject to Regulation 12.3 of the Football League Rules & Regulations).
14.A.3 Where the circumstances set out in Rule 14.A.2.2 apply and at the end of that Playing Season, having regard to the number of Competition points awarded (ignoring any potential deduction):
a. the Club would be relegated in accordance with The Football Conference
Rules & Regulations, the points deduction will apply in the next following
Season; or
b. the Club would not be relegated as aforesaid, the points deduction will apply in that Playing Season and Football Conference Rules & Regulations will then apply (if appropriate) following the imposition of the points deduction.
c. If any club relegated to the Competition from The Football League (in accordance with the regulations of The Football League) whilst it was a member of The Football League, took or suffered any such action as set out in Regulation 12.3.1 of the Regulations of The Football League whilst it was a member of The League and the circumstances set out in Regulations 12.3.2© or 12.3.3(a) apply, then that club, upon being accepted as a member of the Competition shall suffer a deduction of 10 points, such points deduction to apply in respect of the following Playing Season such that the Club starts that Season in the Competition on minus 10 points.
14.A.4 For the purposes of this Rule 14A.
a. where any Insolvency Event is taken or suffered other than on a Business Day (as defined by the Insolvency Rules 1986 as amended from time to time) then for the purposes of determining the timing of any points deduction only the action taken or suffered will be deemed to have been taken or suffered on the immediately preceding Business Day; and
b. if a Company Voluntary Arrangement is approved, then approval of that Company Voluntary Arrangement shall be deemed to have been given at the date of the first meeting of creditors called to consider that Company Voluntary Arrangement, and not the date of any adjourned meeting of the creditors or the meeting of shareholders.
14.A.5 For the avoidance of doubt, where a Club is subject to more than one Insolvency Event (for example Administration followed by a Company Voluntary Arrangement), the Club shall only be deducted one set of 10 points, such deduction to apply with effect from the first Insolvency Event.
14.A.6 The Competition shall serve the Club with written notice of the point’s deduction (the ‘Notice’).
14.A.7 A Club may only appeal against an automatic deduction of points on the ground that the insolvency proceedings arose solely as a result of a Force Majeure event (the ‘Appeal’). For the purposes of this Rule 14, a ‘Force Majeure’ event shall be an event that, having regard to all of the circumstances, is reasonably considered to have been unforeseeable and unavoidable.
14.A.8 Any Appeal must be in writing and be received by the Competition at its registered office no later than 7 days after the Competition serves the Notice. The Appeal must contain a statement setting out the grounds of appeal and provide copies of any documentation upon which the Club intends to rely in support of the Appeal.
14.A.9 The Club must also lodge with the Competition, at the same time as the Appeal, a deposit fee in respect of the costs of the Appeal.
14.A.10 Upon receipt of the Appeal the General Manager shall refer the matter to an SSAP by delivering to the Chartered Institute of Arbitrators (or such other body as the Board may from time to time determine) five copies of the appeal documents together with a request for the appointment of Arbitrators as set out in 14.9 hereof.
14.A.11 The SSAP shall consist of three Arbitrators, one of whom must be a barrister (or solicitor) of at least 5 years call who will act as Chairman of the SSAP, each to be appointed by the Chartered Institute of Arbitrators (or such other body as the Board may from time to time determine) as provided above.
14.A.12 The Competition shall, immediately upon receipt of the Appeal, instruct a firm of independent accountants to carry out a review of the Club’s activities for the purposes of preparing an independent report into the circumstances surrounding and leading up to the entering into insolvency proceedings. The Club shall meet the costs of preparation of that report in any event. The report shall be provided to the Club, the SSAP and the Competition. The SSAP shall take into account the contents of that report when determining whether the insolvency proceedings arose solely as a result of a Force Majeure event.
14.A.13 Both the Club and the Competition shall be entitled to make representations to the SSAP. The SSAP shall use all reasonable endeavours to hear any appeal within 21 days of the lodgement of the Appeal.
14.A.14 The SSAP shall have the power to:
14.A.14.1 Confirm the deduction of ten points; or
14.A.14.2 Set aside the deduction of ten points and substitute a deduction of such lower number of points as it shall deem appropriate; or
14.A.14.3 Order that there shall be no sanction at all.
14.A.15 The decision of the SSAP shall be final and binding. Any costs incurred by any party in appeal proceedings brought before the SSAP shall be met by the Club in any event and shall be considered as a sum due to the Company.
14.A.16 Any sanctions imposed pursuant to these provisions shall not be taken into account in respect of any other sanctions, penalties or fines that may be imposed by the Competition in respect of any breaches of its Rules, Regulations or Articles of Association by the Club.

14.B. GENERAL INSOLVENCY
14.B.1 In the event of a Club entering an Insolvency Event between the end of the AGM and start of the AGM immediately following thereafter (‘the next AGM’) then it shall automatically be relegated by one Step at the next AGM, unless one of the following requirements has been met, namely
(i) Prior to the next AGM it has Paid in Full all its creditors (including but not limited to Football Creditors); or
(ii) Prior to the next AGM it has Paid in Full its Football Creditors and entered a CVA to have Paid in Full its other creditors over an agreed period not extending more than three years following the date of the approval of the CVA.
This sanction shall apply in addition to any Club being relegated pursuant to its playing record in the same period namely that in the event of the Club having already been relegated by one Step it shall be relegated two Steps.
This provision is subject to Rule 2.7 in respect of Clubs which have transferred their membership pursuant to an Insolvency Event and in that case where there is any conflict between any provision of Clause 14 and 2.7 then this Clause 14 shall prevail.
14.B.2 The sanctions contained herein shall be in addition to and not in substitution for any other sanctions contained within the Rules and, in particular, the sanctions set out in rule 14.A.
Clubs Relegated from the Football League
14.B.3 In the event of any Club entering the Competition from the Football League whilst subject to any Insolvency Event, then that Club shall be eligible for membership of the Competition and the provisions of Clause 14.B.1 will not apply to it until the date of the second AGM following its entry into the Competition.

Compliance With/Extension of CVA’s
14.B.4 Any Club must inform the Competition in writing within seven(7) days of it becoming aware of it failing to comply with the terms of any CVA entered into by it or making an application to extend the terms of the CVA entered into by it.
In the event of any Club
-failing to comply with the terms of any CVA entered into by it (whether securing Payment in Full of all of its creditors or not); and/or
-making a successful application to extend the period of any CVA for a period extending more than three years following the date of the approval of the CVA; and/or
-failing to inform the Competition of one or both of the above events in writing within seven (7) days as required under this Rule 14.B.4
then the Board shall have the power to impose such sanction as it deems appropriate, including, but without limitation, the expulsion of that Club, the relegation of that Club, the deduction of points and the embargo of player registrations.
Formic
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Re: We will go into administration

Post by Formic »

There's also an interesting debate on this on the Forest Green Rovers forum from a year ago when they had seen the possibility of their reprieve from relegation if Salisbury were kicked out. The poster called "Smiths Way" is revealed to be Colin Peake mid way through the thread, despite his referall to "Mr Peake" in some of his postings.

http://forum.fgrfc.net/viewtopic.php?f= ... 8&start=20
rushdenman
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Re: We will go into administration

Post by rushdenman »

Quite a bit to digest there Tony.

It appears that maybe Conference North/South could be our destination, but the Conference Board have a habit of throwing a spanner in the works at the AGM so who knows.

Clearing the current debt is obviously a major issue but we need to be concerned about the ongoing running costs should we manage to survive. As I said earlier we need external investment of a sizeable amount on an ongoing basis to have any long term future at the level we are at, or even lower.
Chammie
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Re: We will go into administration

Post by Chammie »

As the author of the original posting on this thread, perhaps Rushdenjim should forward a copy of that posting directly to the Beasants and ask them to confirm or deny the truth behind the information he has received?
Might be an idea though to edit out the personal comments though if he wants to get a reply.
My second fear concerns the Dale Roberts Trust.
A Trust will / should have Trustees to provide security over donations made and to ensure that funds are used only for the purposes intended. Adam Johnson has been stated to be a 'Trust Abbassador' but not a Trustee, so who are the Trustees in this case? (I'm hoping that the Trustees do not include anyone currently directly involved in the management of the Club!!).
What is the Supporters Trust doing whilst all this is going on? - have they disbanded?
Formic
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Re: We will go into administration

Post by Formic »

I agree about the running costs issue. I've often wondered about the possibility of leasing out much of the office / conference space at Nene Park to a third party on a (semi-)permanent basis, but I guess this must have been considered - and only resulted in the situation we had with FootballCV where they occupied a few rooms in the North Stand. I'm thinking more of an outfit like Regus who could modify rooms to meet their needs, and then sell them on as office or meeting space.
Welsh
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Re: We will go into administration

Post by Welsh »

There are a number of contributors to this forum with "sources" who hear things. Has anyone else heard mumblings about imminent Administration?

In fairness, I can see Rushdenjim's source being accurate in terms of the conclusion. In my view some kind of insolvency process is inevitable. I just cannot see how the club can survive the short term without season ticket revenue or funding from the owners. The former is frustrated by a breakdown in trust and the latter simply doesn't seem to exist.

The only element of the original rumour that surprises me is the level of liability. I can only assume this must include Gill Wignall's money, but even then it's a massive sum. There was certainly a statement made at takeover that the club was debt free as KC had written off his loans. Of course, the income has been very minimal in the last few months with the crowd made up largely of season ticket holders. Even the Luton gate was largely pre-paid before Christmas. If the salary bill is c£50k per month then the PAYE/NIC per month can only be c15k-20k per month depending whether the £50k is gross or net. With the low level of pay on the gate fans, even the VAT cannot realisitically run to six figures for 4/5 months. I'm not sure money has been diverted elsewhere, as I doubt there was much to divert!

I was heartened to see KC at the game on Saturday and hope he may rescue us. However, I can only assume he would buy the club through a pre-pack Administration to lose the liabilities. Why wouldn't he? Well, I guess there is the risk of relegation/demotion as a reason not too, but if it is £750k then I can't see KC paying that off. I wonder if JE would stay if KC resumed control, even in a lower league?

Just on KC, I can only assume that he funded the club to a level where he was comfortable with his investment verses the value of his security. Of course he has commercial ambitions for the land, but I think he did/does have ambition for the club too. Why would he have recruited high profile managers like Westley & Hill and invested heavily in the doomed season of 2008/2009 to sign Clare, Phillips, Knight, etc. On that basis I'm hopeful he might come back in, but where we'll play and at what level who knows.

Finally, of course the cost of running the facilities has been a major a problem for us. Have we been radical enough? Successive regimes have tried to "sweat" the facilities, but without success. Is it time to protect the club as best we can and simply shut it down? Close the North Stand and Airwair, close the Diamond centre except for the bar on matchday and run the club from the ticket office. Essentially, run it like a Conference North/South club without any money - that's what we are now. No more lofty ambitions. At least we might still have a club.
Three of Diamonds
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Re: We will go into administration

Post by Three of Diamonds »

Just on KC, I can only assume that he funded the club to a level where he was comfortable with his investment verses the value of his security. Of course he has commercial ambitions for the land, but I think he did/does have ambition for the club too. Why would he have recruited high profile managers like Westley & Hill and invested heavily in the doomed season of 2008/2009 to sign Clare, Phillips, Knight, etc. On that basis I'm hopeful he might come back in, but where we'll play and at what level who knows.
Finally, of course the cost of running the facilities has been a major a problem for us. Have we been radical enough? Successive regimes have tried to "sweat" the facilities, but without success. Is it time to protect the club as best we can and simply shut it down? Close the North Stand and Airwair, close the Diamond centre except for the bar on matchday and run the club from the ticket office. Essentially, run it like a Conference North/South club without any money - that's what we are now. No more lofty ambitions. At least we might still have a club.


You make some excellent points in there. The main problem IMO of KC (and HT) was their poor handling of the club on a PR level. We were still getting gates of 2 - 2500 with Westley in charge, mysteriously sacked him and dismantled a team that looked well capable of winning the Conference. This took several hundred off our attendances alone! Look where he is now. I also know of a company that used NP as a meeting place until all of a sudden the prices were doubled without warning nor justification. That business left, and has not returned (yet). So shutting those stands down (particularly the North), might be worse for our club as it may impact on attendances again.
IMO there hasn't been enough of a push on sweating the facilities under KC, hire prices were just too damned high there (I think they're better now). As I said to Liam & Steve at the forum, we must get people down there first - THEN take their money, but it must be at a price that's affordable. KC never got involved in the "community", and that needs changing.
AFC R & D member number 34
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