FA and the escrow account? (1 Viewer)

[skybluetony176]

Does anyone understand how this worked?

Is this why the FL said sisu had to pay ACL loads of money in return for the golden share?

 

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[SimonGilbert]

My understanding is FA paid in 500k when Ricoh project was in early stages. It was an FA contribution to new stadium.

After that, the club was legally responsible for keeping it topped up.


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[skybluetony176]

My understanding is FA paid in 500k when Ricoh project was in early stages. It was an FA contribution to new stadium.

After that, the club was legally responsible for keeping it topped up.


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Thanks Simon. This is the escrow account that ACL emptied when the rent wasn't being paid or is it another escrow account?

 

[tisza]

But doesn't it appear in old ccfc accounts as cash albeit restricted cash? Plus any stadium contribution should have gone to CNR?

 

[Grendel]

I assume it kept getting mentioned because the club wanted to show that during the rent strike ACL receivedpdt of the rent which makes the claim the rent strike was making ACL financially unstable invalid.

 

[oldskyblue58]

I think the Club were due money from the FA football foundation to help with the Ricoh project.

Because of the state of the clubs finances it was agreed there would be a rental deposit that would be held in the Escrow. This account would show as restricted funds on the CCFC annual accounts and could not be used for other purposes. The agreement with CCFC was that should the rent or expenses not be paid then ACL could draw down money from the Escrow account. The club was supposed legally to then top the account back up to £500k. As an added safeguard there were personal guarantees from Robinson & McGinnity to top it up if the club failed to.

The amount finally agreed was £500k and the deposit sourced from the FA football foundation grant

The account earnt interest and by 2012 stood at over £530k. It was drawn down April through to July 2012 so its effects are in two years ends as far as accounts for CCFC and ACL go (31/05/12 and 31/05/13).

It was never topped back up by the club in 2012 and the guarantees kicked in.

But I think I am right in saying the account had been drawn against before in a previous year and topped back up by the club but that may have been pre SISU

There has only been one escrow account as far as I know

 

[stupot07]

My understanding is FA paid in 500k when Ricoh project was in early stages. It was an FA contribution to new stadium.

After that, the club was legally responsible for keeping it topped up.


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Yeah that's how I understood it. So in affect it's the clubs money not the FA's.


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[Mary_Mungo_Midge]

I assume it kept getting mentioned because the club wanted to show that during the rent strike ACL receivedpdt of the rent which makes the claim the rent strike was making ACL financially unstable invalid.

No, it doesn't. ACLs accounts still showed a reasonable position there. However, taking from the escrow account would have made the Yorkshire Bank nervous, is it wouldn't even have covered off 6 months funds at contracted value. Yorkshire get jittery, call in the loan, thus ACL become unstable overnight. Voila

 

[bigfatronssba]

Yeah that's how I understood it. So in affect it's the clubs money not the FA's.


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And was another legally binding contract that the club broke.

 

[stupot07]

And was another legally binding contract that the club broke.

We couldn't afford the rent, that was the purpose of the account.


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[Mary_Mungo_Midge]

We couldn't afford the rent, that was the purpose of the account.


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Stop it. We could afford the rent with better cost control on player contracts. Why do you keep doing this?

 

[bigfatronssba]

We couldn't afford the rent, that was the purpose of the account.


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Luckily we can afford to pay our masters £1.8m a year interest fees though.

After all, who needs a stadium in Coventry?

Its all about priorities.

 

[lordsummerisle]

Luckily we can afford to pay our masters £1.8m a year interest fees though.

After all, who needs a stadium in Coventry?

Its all about priorities.

The thing is, we haven't actually paid any of this interest, added to the "bill" sure enough, but not actually paid.

Besides if the Council can apparently make around £19million in interest, half of it from a local charity, then why shouldn't other loans incur fees?

 

[Mary_Mungo_Midge]

The thing is, we haven't actually paid any of this interest, added to the "bill" sure enough, but not actually paid.

Besides if the Council can apparently make around £19million in interest, half of it from a local charity, then why shouldn't other loans incur fees?

Why apply these interest fees then? They're atop of a sum of debt that's already preposterous. If they're innocent and irrelevant, why not just stop applying them and giving rise to accusations such as those made on here?

 

[robbiethemole]

The thing is, we haven't actually paid any of this interest, added to the "bill" sure enough, but not actually paid.

Besides if the Council can apparently make around £19million in interest, half of it from a local charity, then why shouldn't other loans incur fees?

Surely that £19m is spread over the 40 year term of the loan, which equates to £47.5k per year interest. Not much really in the grand scheme of things

 

[bigfatronssba]

The thing is, we haven't actually paid any of this interest, added to the "bill" sure enough, but not actually paid.

Besides if the Council can apparently make around £19million in interest, half of it from a local charity, then why shouldn't other loans incur fees?

No issue with interest on loans. However to suggest that £!.8m a year is sustainable and affordable, but £1.3m is killing the club, looks a little absurd.

 

[Moff]

No issue with interest on loans. However to suggest that £!.8m a year is sustainable and affordable, but £1.3m is killing the club, looks a little absurd.

Even the finest QC would struggle to make that look a valid point for the SISU case...its laughable really

 

[Jack Griffin]

Surely that £19m is spread over the 40 year term of the loan, which equates to £47.5k per year interest. Not much really in the grand scheme of things

Try doing the sum again bud..

PS I make the interest rate about 5.15%.

 

[lordsummerisle]

No issue with interest on loans. However to suggest that £!.8m a year is sustainable and affordable, but £1.3m is killing the club, looks a little absurd.

Think it's only been the last couple of years that interest has been applied to these loans anyway isn't it? Apart from the Ranson "not really a loan just a good way to get a great rate of return" loan that is.

Was always surprised when accounts were published on time(ish) in those distant days that Sisu weren't charging loads.

 

[shmmeee]

We can't afford to pay the gas bill or player wages technically, we're losing £4-7m/year FFS. It's up to Sisu how much they put in and what debts they let fall due.

 

[stupot07]

Stop it. We could afford the rent with better cost control on player contracts. Why do you keep doing this?

Because we couldn't afford the rent. We couldn't afford the players contracts either. If you're looking for efficiency savings, you look to make the savings from every possible cost centres. Why are you in denial?


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[stupot07]

Luckily we can afford to pay our masters £1.8m a year interest fees though.

After all, who needs a stadium in Coventry?

Its all about priorities.

I don't disagree, but then again if we weren't spending more than we could afford we wouldn't need to cover losses, we wouldn't have to borrow money, we wouldn't be paying interest.

All costs are too high, never said they weren't, but we couldn't afford to pay 20% of our league one turnover on rent.


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[shmmeee]

Because we couldn't afford the rent. We couldn't afford the players contracts either. If you're looking for efficiency savings, you look to make the savings from every possible cost centres. Why are you in denial?


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There's a significant difference between "I can't afford that" and "I'd like to spend less on that if possible". Sisu can afford whatever they choose. We're still spending on players, we can't be that skint.

Long term it harms the club maybe, was it about to send us into liquidation? I seriously doubt it. If so, it's one hell of a coincidence that this happened just as Joy fancied owning the stadium

 

[stupot07]

There's a significant difference between "I can't afford that" and "I'd like to spend less on that if possible".

Not really? Did we not lose £7.2m last season without paying rent? We've been a going concern and on the edge of insolvency for years. I don't get why you and others are in denial that the rent wasn't a affordable (or players wages, etc)


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[shmmeee]

Not really? Did we not lose £7.2m last season without paying rent? We've been a going concern and on the edge of insolvency for years. I don't get why you and others are in denial that the rent wasn't a affordable (or players wages, etc)


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Stop putting words into other people's mouths Stu. No-one's said the rent was a good deal, what we've said is the timing of stopping paying was entirely a calculated decision by Sisu and not a case of the club suddenly running out of money to pay. Hence no pressing need for a rent strike, despite the pressing need for rent negotiations.

 

[shmmeee]

To put it another way: our losses in the penultimate year of the Ricoh (before we started the strike) were not our biggest ever. So why did we need to stop paying then and not any time in the previous 5-6 years?

 

[stupot07]

Stop putting words into other people's mouths Stu. No-one's said the rent was a good deal, what we've said is the timing of stopping paying was entirely a calculated decision by Sisu and not a case of the club suddenly running out of money to pay. Hence no pressing need for a rent strike, despite the pressing need for rent negotiations.

Sorry Shhmeee but you said there's a difference between "we'd like to pay less" and "we can't afford it". It was a poor deal and one that wasn't affordable, regardless of sisu's strategy.

I don't know why people can't admit it wasn't affordable. That is neither pro sisu nor and anti ACL stance.


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[stupot07]

To put it another way: our losses in the penultimate year of the Ricoh (before we started the strike) were not our biggest ever. So why did we need to stop paying then and not any time in the previous 5-6 years?

They didn't stop paying until relegation was pretty much a certainty, I can only guess that that was the straw that broke the camels back, knowing that they were going to lose £4-5m turnover.

Again saying the rent was unaffordable is different from agreeing with sisu's tactics. And as it came out the pre-admin offer wasn't as good as it first looked on paper.


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[ccfcway]

Because we couldn't afford the rent. We couldn't afford the players contracts either. If you're looking for efficiency savings, you look to make the savings from every possible cost centres.

id suggest one cost centre we could save money on was paying lawyers !

 

[skybluetony176]

They didn't stop paying until relegation was pretty much a certainty, I can only guess that that was the straw that broke the camels back, knowing that they were going to lose £4-5m turnover.

Again saying the rent was unaffordable is different from agreeing with sisu's tactics. And as it came out the pre-admin offer wasn't as good as it first looked on paper.


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It was a shitty deal, no doubting that. But what the club did get in return was the opportunity to sell 10000+ tickets for most if not every home game. So in that sense it was paying for itself.

You can't say the same about suxfields. In terms of un affordability suxfields is the worse rent deal this club has ever had by far. Hence a huge chunk of cash had to be injected as share issues to comply with FFP.

Yet you don't seem concerned about this and this is a current danger to the clubs future.

 

[Grendel]

Try doing the sum again bud..

PS I make the interest rate about 5.15%.

I think bud you are missing something here.

 

[Grendel]

The thing is, we haven't actually paid any of this interest, added to the "bill" sure enough, but not actually paid.

Besides if the Council can apparently make around £19million in interest, half of it from a local charity, then why shouldn't other loans incur fees?

Is it really "making" that much interest or is that what its making from ACL?

 

[lordsummerisle]

Is it really "making" that much interest or is that what its making from ACL?

It's what was claimed in court yesterday, of course not mentioning that half the "profit" is from the CCC owned bit, and not taking into consideration whatever interest fees they are paying themselves for the loan they took out to give the loan to ACL.

Belongs in the "Spin" thread with the other stuff.

 

[Grendel]

It's what was claimed in court yesterday, of course not mentioning that half the "profit" is from the CCC owned bit, and not taking into consideration whatever interest fees they are paying themselves for the loan they took out to give the loan to ACL.

Belongs in the "Spin" thread with the other stuff.

Spot on.

 

[stupot07]

It was a shitty deal, no doubting that. But what the club did get in return was the opportunity to sell 10000+ tickets for most if not every home game. So in that sense it was paying for itself.

You can't say the same about suxfields. In terms of un affordability suxfields is the worse rent deal this club has ever had by far. Hence a huge chunk of cash had to be injected as share issues to comply with FFP.

Yet you don't seem concerned about this and this is a current danger to the clubs future.

Who has ever said that Sixfields is affordable or makes any kind of financial sense?? Not me, and I can't remember ever seeing anyone on here say it is.

Ffs, yes of course I'm concerned about it and the current danger to the club.



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