Mean while back in court (2 Viewers)

[dongonzalos]

It wasn't written in a headline so you'd have missed it.

Not even by Les I was reading the coverage by both CET and Les.

 

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[Godiva]

All of the justification is based on the Rent Strike so far, so surely if or if it wasn't a strike or it was agreed is relevant?

Like Shmmeee I try my best to stay out of this, but ...

The rent strike was part of the infamous road map. It was called Rent Holiday and was agreed by ACL in the first meeting. They then had a change of heart (probably spoke to a solicitor) and said they couldn't support that - it had to be removed from the road map. The club said it couldn't pay anyway, so from there it became a rent strike.

In the first court run some minutes of meetings were presented to show this.

It was never the intention that ACL should go bust, but it should appear so if the club - ACL's biggest income - would go under. This was the pressure they would apply to Yorkshire Bank. The combined income of ACL and the club was never going to be enough to repay the loan - somebody had to take a hit ... YB. The only legal way to rob a bank at bright daylight.
Immoral? Unethical? Sure!
But legal.

 

[Nick]

It is an article that had just mentioned Premiership Rugby in the previous update and is about a building owned by Wasps.

You're a little sensitive dude.

Not really, this is pre wasps isn't it they are hearing? Must have missed the pictures of our 5th going in against Crewe when they mentioned Coventry City FC...

 

[dongonzalos]

This is probably why people get pissed off with the Telegraph. Just in case anybody had forgotten about Wasps today....

That doesnt appear when I read the article?

 

[jimmyhillsfanclub]

Handball !!!

 

[dongonzalos]

All of the justification is based on the Rent Strike so far, so surely if or if it wasn't a strike or it was agreed is relevant?

What the judge said wasn't relevant to SISU's QC he is now allowing the Council's QC to talk about uninterrupted. Unless he is listening to all but thinking this makes no difference to my final decision.

 

[fernandopartridge]

Even if it's an agreement with Sisu and they are the most likely benefactors?

Isn't that a bit like saying "I'm not bribing you, I'm just leaving this pile of cash unattended for a few minutes in your presence."?

There wasn't an agreement to push ACL into insolvency, it was an agreement to distress the value of the loan.

 

[fernandopartridge]

Handball !!!

Indeed, he's also gone over without a player near him, diving bastard!!!!!!!!!!!!!!!!!!!!!!

 

[Nick]

What the judge said wasn't relevant to SISU's QC he is now allowing the Council's QC to talk about uninterrupted. Unless he is listening to all but thinking this makes no difference to my final decision.

You would think he would say the reasons weren't relevant? No idea.

As Godiva has said though, if ultimately they flapped it before the rent strike went ahead the deal was off.

 

[dongonzalos]

Like Shmmeee I try my best to stay out of this, but ...

The rent strike was part of the infamous road map. It was called Rent Holiday and was agreed by ACL in the first meeting. They then had a change of heart (probably spoke to a solicitor) and said they couldn't support that - it had to be removed from the road map. The club said it couldn't pay anyway, so from there it became a rent strike.

In the first court run some minutes of meetings were presented to show this.

It was never the intention that ACL should go bust, but it should appear so if the club - ACL's biggest income - would go under. This was the pressure they would apply to Yorkshire Bank. The combined income of ACL and the club was never going to be enough to repay the loan - somebody had to take a hit ... YB. The only legal way to rob a bank at bright daylight.
Immoral? Unethical? Sure!
But legal.

Right so the council said no to a rent holiday after initially agreeing it.
SISU then said well it's going to be a rent strike then because we are not paying.
So the council never encouraged SISU to go on a rent strike or agreed to a rent strike.
I can see why it's irrelevant now.
Still not sure why he interrupts one QC and not the other though

 

[chiefdave]

All of the justification is based on the Rent Strike so far, so surely if or if it wasn't a strike or it was agreed is relevant?

Been out of the office all morning, just catching up and was about to say the same. If it was irrelevant yesterday if it was a holiday or strike why are CCC now basing their whole arguement around it being a rent strike which put ACL in danger of going under.

Intersting that of course at the time of the loan they were claiming ACL was doing fantastically and even when they made the loan they denied it was a bailout. If a commercial lender would have lent them money on the same terms would it not have been better to go down that route and remove any chance of problems?

 

[Nick]

“You weren’t trying to cover up for Jordan Williams were you?” asks Mr Borelli QC.
“No,” says Ethan.

Say whattttttttttttttttt?

 

[usskyblue]

Been out of the office all morning, just catching up and was about to say the same. If it was irrelevant yesterday if it was a holiday or strike why are CCC now basing their whole arguement around it being a rent strike which put ACL in danger of going under.

Intersting that of course at the time of the loan they were claiming ACL was doing fantastically and even when they made the loan they denied it was a bailout. If a commercial lender would have lent them money on the same terms would it not have been better to go down that route and remove any chance of problems?

If I remember rightly, they were making statements that ACL were doing so well they didn't need the club ....

 

[Captain Dart]

Right so the council said no to a rent holiday after initially agreeing it.
SISU then said well it's going to be a rent strike then because we are not paying.
So the council never encouraged SISU to go on a rent strike or agreed to a rent strike.
I can see why it's irrelevant now.
Still not sure why he interrupts one QC and not the other though

It was pretty much the same in the previous hearings, SISU arguments were often interjected with the Judges saying "thats not relevant" or "this is of no consequence" etc. etc.. so far there is no smoking gun, just a rehash, looks like it is going the same way.. roll on the sequel, that is JR2 in a court room Spring 2017.

Been out of the office all morning, just catching up and was about to say the same. If it was irrelevant yesterday if it was a holiday or strike why are CCC now basing their whole arguement around it being a rent strike which put ACL in danger of going under.

Intersting that of course at the time of the loan they were claiming ACL was doing fantastically and even when they made the loan they denied it was a bailout. If a commercial lender would have lent them money on the same terms would it not have been better to go down that route and remove any chance of problems?

Simples, the the judge said the reasons for the rent being withheld are irrelevant, but the CC QC is arguing about the rent being illegally withheld, which is a breach of contract.

 

[Nick]

Council QC now looks at option of forfeiting ACL’s lease and re-letting the Ricoh Arena. He says that was a “non-runner”.
He claims if ACL had been allowed to become insolvent, the lease would not have reverted to the council as freeholder because the head lease was to ACL (2006), rather than its parent company ACL Ltd.
ACL’s “insolvency forfeiture provision” is now being read out which emphasises ACL (2006) held the head lease, rather than it’s parent company ACL Ltd.
Council QC says it was not an option because its lease was to ACL (2006) and “it could not forfeit the sublease to ACL on account of ACL’s insolvency.”

 

[chiefdave]

Isn't that the council's own fault for not having the lease terms set out in a manner that would allow them to reclaim the lease?

Found the question from the judge about the amount CCC had put into ACL interesting. If CCC put nothing in why did it matter if ACL went bust and they got nothing out?

 

[dongonzalos]

Say whattttttttttttttttt?

I knew someone else was behind this

 

[Captain Dart]

Isn't that the council's own fault for not having the lease terms set out in a manner that would allow them to reclaim the lease?

Found the question from the judge about the amount CCC had put into ACL interesting. If CCC put nothing in why did it matter if ACL went bust and they got nothing out?

Presumably they've fixed that issue with Wasps? :thinking about:

 

[SkyBlue_Bear83]

I don't know, but can they agree that and is it binding?

I mean if I sign a contract saying I'll pay £10 a month, then some guy on the customer service line says "nah, fuck it, pay £5" I'm still legally obliged to pay the £10 aren't I? Wouldn't you have to sign a new contract at the new rate to not fall foul of the old one?

I'm not sure, if you could prove it happened through either recorded call or admission from the person who said pay £5 then I don't think you would legally have to pay £10 still.

I don't think a contract/agreement has to be in writing to be binding.

 

[Nick]

Council QC says the question of ACL’s value should be “kept in proper perspective”.He adds: “It’s relevant but only as one of several things for any private investor in the council’s position.
“It was not the most important or a determinative consideration in the circumstances that faced the council.
“It was enough to justify the loan and that there was no viable alternative.”
He now quotes the High Court judgment from July 2014 which says a private investor would not focus solely on loan to value and that the council, as a private investor, was permitted to consider the longer term.
He says: “That’s impeccable reasoning.”

Surely the value of a company is relevant when investing money?

 

[chiefdave]

Presumably they've fixed that issue with Wasps? :thinking about:

Don't think they have, doesn't it pass to the bondholders now?

 

[jas365]

Isn't that the council's own fault for not having the lease terms set out in a manner that would allow them to reclaim the lease?

Found the question from the judge about the amount CCC had put into ACL interesting. If CCC put nothing in why did it matter if ACL went bust and they got nothing out?

Wouldn't CCC owning the freehold be a factor in the importance of ACL going bust?

 

[Nick]

We’re now hearing about the “likely” rent levels CCFC were going to pay at the time of the loan.
A figure of £400,000 annual was considered the most likely, says the council QC - which according to a report by CBRE would have put the value of ACL’s lease at just over £10m.
Sisu QC disputes that £400,000 figure, but council QC suggests that even it had been £200,000 the lease’s value would have been around £8million.
He contends that it certainly wasn’t as low as the £6.4m CBRE valued it at with no rent.
He also adds that the CBRE report only took into account the rent of the football club and not other revenues.

Was this I take it pre rent strike?

If it wasn't as low as £6.4 with no rent and no other revenues, then when it was sold to Wasps would the no rent value be taken into consideration? (If we are taking the no rent into consideration).

(I know it is lease value, so surely a minimum?)

 

[chiefdave]

If it wasn't as low as £6.4 with no rent and no other revenues, then when it was sold to Wasps would the no rent value be taken into consideration? (If we are taking the no rent into consideration).

I don't see how they can say they had the lease valued at £6.4m with no rent and over £10m with £400K rent and then say the sale price to Wasps was correct. That's even before you consider the huge lease extension given to Wasps.

And that valuation is only the value of the football club being there not everything else! Appreciate the value of the lease is not the same as the value of ACL but looks a little suspect to me.

 

[Nick]

I don't see how they can say they had the lease valued at £6.4m with no rent and over £10m with £400K rent and then say the sale price to Wasps was correct. That's even before you consider the huge lease extension given to Wasps.

And that valuation is only the value of the football club being there not everything else! Appreciate the value of the lease is not the same as the value of ACL but looks a little suspect to me.

Didn't Wasps pay £1m for the extension? Or something like that?

In one argument they are arguing it was worth lots, but then they sold it for a lot less and justified that? If they are talking about no rent from the club then the rent strike and Northampton makes no difference does it?

 

[Nick]

Council QC now presents a profit and loss account for ACL without income from the football club.
Justice Tomlinson asks what the document is and where it’s come from.
QC clarifies it’s an internal management account prepared to demonstrate the position as of January 2013. He says it provides added confirmation of the High Court decision.
Justice Treacy asks if they should be considering this document as it’s “seeking to justify the position after the event.”
Council QC says it’s useful when looking at the financial projections for ACL.
Now we’re breaking for lunch! Back at 2pm!

I guess the argument is how they were doing well and could cope without CCFC?

I'm confused Weren't they trying to say it was CCFC's fault because of the rent strike for the bail out? Didn't they say it was doing well without CCFC? Then that they had to sell to Wasps because it wasn't doing well for the tax payer?

Happy for somebody to correct me on it!

 

[Captain Dart]

Didn't Wasps pay £1m for the extension? Or something like that?

In one argument they are arguing it was worth lots, but then they sold it for a lot less and justified that? If they are talking about no rent from the club then the rent strike and Northampton makes no difference does it?

They also divested the loan debt in its entirety which was about £14M.. even if that is not strictly part of the price paid it is another big chunk of money that was rolled into the deal.

You can't focus on one part of the equation as it suits you.

 

[chiefdave]

They also divested the loan debt in its entirety which was about £14M.. even if that is not strictly part of the price paid it is another big chunk of money that was rolled into the deal.

You can't focus on one part of the equation as it suits you.

Well you can, CCC are saying in court the value of the lease, without CCFC as tennants, was £6.4m. How then can a 200 year extension, a deal done with CCFC as tennants, be worth £1m?

 

[Nick]

They also divested the loan debt in its entirety which was about £14M.. even if that is not strictly part of the price paid it is another big chunk of money that was rolled into the deal.

You can't focus on one part of the equation as it suits you.

What happens if Wasps didn't come in? Unless they had an idea about it?

It still doesn't explain the sale figure of ACL compared to what they are saying in court? Some thing don't seem to match up with past comments.

 

[dadgad]

This post has caused widespread hilarity, thx.

The perfect summing up I agree - from a council whore who has zero interest in the football club.

We have to see that other parasite GPE soon.

 

[Hobo]

I guess the argument is how they were doing well and could cope without CCFC?:

I'm confused Weren't they trying to say it was CCFC's fault because of the rent strike for the bail out? Didn't they say it was doing well without CCFC? Then that they had to sell to Wasps because it wasn't doing well for the tax payer?

Happy for somebody to correct me on it!

Could be doing well under the circumstances. The bail out could help restructure and reduce some of the pressure. Then long term the Ricoh needed a proper pennant so sold to Wasps.

I don't know Nick, I am just trying to think round your confusion.

 

[oldskyblue58]

I don't see how they can say they had the lease valued at £6.4m with no rent and over £10m with £400K rent and then say the sale price to Wasps was correct. That's even before you consider the huge lease extension given to Wasps.

And that valuation is only the value of the football club being there not everything else! Appreciate the value of the lease is not the same as the value of ACL but looks a little suspect to me.

Wasps didn't purchase the existing lease though did they. They purchased the shares of ACL which had a net value including the existing lease all the other assets AND all the liabilities including the loan. It was never ever going to be a similar value to the value of the lease taken in isolation. I know you acknowledge that cd. But why do people keep comparing totally different things and saying but it doesn't read the same, it wont.

What the council QC appears to be saying is that the rent roll multiple is around 10 or 11 times the annual rent.

The lease extension I suspect came in just after the share purchase. That way there is a sitting leaseholder for the next 40years and a lease extension has zero value to any one else and little value to CCC for 40 years either

 

[Astute]

I'm not sure, if you could prove it happened through either recorded call or admission from the person who said pay £5 then I don't think you would legally have to pay £10 still.

I don't think a contract/agreement has to be in writing to be binding.

Correct.

I run a little business with a good mate of mine. We have no written contract. We trust each other. Everything is in his name. But if for some unknown reason something went wrong between us I wouldn't have the written proof. But what I do have is the financial trail.

 

[Captain Dart]

Well you can, CCC are saying in court the value of the lease, without CCFC as tennants, was £6.4m. How then can a 200 year extension, a deal done with CCFC as tennants, be worth £1m?

I agree the extension looks rather undervalued. I suppose the logic is that Wasps become bound to the City in perpetuity and because of the deal are enabled to raise (borrow) the capital they need to run the Arena for the foreseeable future. I guess that will be the next claim about 'state aid'

 

[Nick]

Wasps didn't purchase the existing lease though did they. They purchased the shares of ACL which had a net value including the existing lease all the other assets AND all the liabilities including the loan. It was never ever going to be a similar value to the value of the lease taken in isolation. I know you acknowledge that cd. But why do people keep comparing totally different things and saying but it doesn't read the same, it wont.

What the council QC appears to be saying is that the rent roll multiple is around 10 or 11 times the annual rent.

The lease extension I suspect came in just after the share purchase. That way there is a sitting leaseholder for the next 40years and a lease extension has zero value to any one else and little value to CCC for 40 years either

OK that makes a bit more sense now.

BUT shouldn't they be then including that when they talk about the investment etc? Like you say if it isn't just about the lease and is the other assets and liabilities, would they not be taken into consideration before giving a big loan?

Or does it not work like that?

The way I understand that is if you were valuing CCFC because you had let's say Wayne Rooney and was valued at £50m, but we had £65 million debt. Could we then justify things based on Wayne Rooney but ignore the rest? Is it like that?