Court Case Thread! June 2018 (13 Viewers)

[fernandopartridge]

Sisu didn’t argue that the Ricoh was worthless and no commercial lender would have lent to them because of that then?

You're comparing apples with pears. SISU's argument was that ACL on a 40 odd year lease was worthless and would have struggled to raise the finance on the open market. It's a different proposition to ACL with Wasps and a 250 year lease.

 

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[Astute]

Oh dear. Sounds like the judge is telling SISU that they’re pissing in the wind. Sounds like the mediation suggestion in the last round was trying to do SISU a favour, or the club at least.

But we knew that the value was taken from when the arena was empty and unused. And a big loan was also outstanding that had to be serviced.

 

[thekidfromstrettoncamp]

What no Tim Fisher in attendance ?

 

[Astute]

You're comparing apples with pears. SISU's argument was that ACL on a 40 odd year lease was worthless and would have struggled to raise the finance on the open market. It's a different proposition to ACL with Wasps and a 250 year lease.

But the lease couldn't be extended until it was taken over by someone. If SISU had taken the lease on they would have had the same rights as Wasps. How could SISU ever negotiate extending the lease when they were not willing to pay or take on the loan that was outstanding?

 

[Nick]

But the lease couldn't be extended until it was taken over by someone. If SISU had taken the lease on they would have had the same rights as Wasps. How could SISU ever negotiate extending the lease when they were not willing to pay or take on the loan that was outstanding?

Wasn't the lease extension done before the takeover was completed?

 

[Astute]

Wasn't the lease extension done before the takeover was completed?

No. Sure it was straight after but arranged before they took over. It all moved too quickly.

But that is where negotiating gets you.

 

[fernandopartridge]

But the lease couldn't be extended until it was taken over by someone. If SISU had taken the lease on they would have had the same rights as Wasps. How could SISU ever negotiate extending the lease when they were not willing to pay or take on the loan that was outstanding?

I don't think they're saying otherwise are they? They are saying that the whole deal was contingent on the lease extension, the council arguing otherwise is disingenuous in the extreme though on the face of it what they have done isn't illegal.

 

[skybluetony176]

You're comparing apples with pears. SISU's argument was that ACL on a 40 odd year lease was worthless and would have struggled to raise the finance on the open market. It's a different proposition to ACL with Wasps and a 250 year lease.

Not really. The judge disagreed with them. SISU’s argument also didn’t consider the fact that ACL was the only entity that had the legal right to extend the lease, which is where the value is. JR2 seems to acknowledge that as they’re arguing that by ACL doing what it was always entitled to do Wasps underpaid for ACL. ACL’s situation never changed from day one. JR1 dismisses the right to extend the lease as a value, in fact I don’t even recall it being mentioned in JR1. JR2 is based on it. So SISU have changed position, completely.

 

[Nick]

No. Sure it was straight after but arranged before they took over. It all moved too quickly.

But that is where negotiating gets you.

So that begs the question if it was arranged before they took over, why didn't they charge for it with a 250 year lease. The other question is why didn't they give a 250 year lease years ago which meant ACL wouldn't struggle so much and therefore CCFC wouldn't be paying millions in rent as ACL wouldn't be as reliant.

 

[fernandopartridge]

No. Sure it was straight after but arranged before they took over. It all moved too quickly.

But that is where negotiating gets you.

Helps when you've been negotiating or courting Derek Richardson for a number of years, even when you were in faux negotiations with CCFC in 2012

 

[Captain Dart]

You're comparing apples with pears. SISU's argument was that ACL on a 40 odd year lease was worthless and would have struggled to raise the finance on the open market. It's a different proposition to ACL with Wasps and a 250 year lease.

I think the SISU argument hinges on whether the lease extension is included in the valuation on sale of the Arena.
But I'm pretty sure the extension was done later. I suppose then it boils down to whether it was already agreed in principle at the time of sale.

 

[skybluetony176]

Wasn't the lease extension done before the takeover was completed?

Couldn’t have been. Wasps didn’t own ACL before the takeover so therefore didn’t have any legal rights to extend it. They had to purchase ACL first to do it.

 

[chiefdave]

Shouldn't the first thing to be dealt with have been what happened with the mediation that was ordered?

But the lease couldn't be extended until it was taken over by someone.

Why couldn't it be extended when ACL was owned by Higgs and CCC?

Wasn't the lease extension done before the takeover was completed?

Both were agreed at the same council meeting which is why the judge who sent this to full trial said it had to be considered as one transaction. Something this judge seems to have ignored.

Only a few minutes in and we've already got the grounds for SISU's next appeal.

 

[Nick]

Couldn’t have been. Wasps didn’t own ACL before the takeover so therefore didn’t have any legal rights to extend it. They had to purchase ACL first to do it.

It was done at the same time wasn't it? It wasn't as if they sold it to Wasps and then a few months later it was extended.

So it begs the question why didn't ACL do it and then get more from Wasps for the Tax Payer?

 

[Astute]

I don't think they're saying otherwise are they? They are saying that the whole deal was contingent on the lease extension, the council arguing otherwise is disingenuous in the extreme though on the face of it what they have done isn't illegal.

Which is how CCC have been in court before. Keep it to what the case is about and not change it as they go along. IIRC they have to keep to what it is about in a JR.

 

[Astute]

So that begs the question if it was arranged before they took over, why didn't they charge for it with a 250 year lease. The other question is why didn't they give a 250 year lease years ago which meant ACL wouldn't struggle so much and therefore CCFC wouldn't be paying millions in rent as ACL wouldn't be as reliant.

Because by law you can't extend a lease that isn't yours. And the freeholder can only charge a certain % of the value to extend a lease.

Yes we should have had a lot longer lease from the start. But as the rent was the amount to cover the outstanding loan the rent payable would have been about the same.

 

[Nick]

"Material impact on competition"
Mr Thompson says the new 250 year lease was granted by the council without prior market valuation of the stadium. He says the effect of the transaction had a material impact on the rest of the competition.

He said the stadium was independently judged to be worth between £46.9m and £48.5m.

 

[Nick]

Because by law you can't extend a lease that isn't yours. And the freeholder can only charge a certain % of the value to extend a lease.

Yes we should have had a lot longer lease from the start. But as the rent was the amount to cover the outstanding loan the rent payable would have been about the same.

The lease was ACLs though?

 

[Astute]

Shouldn't the first thing to be dealt with have been what happened with the mediation that was ordered?

Why couldn't it be extended when ACL was owned by Higgs and CCC?

Both were agreed at the same council meeting which is why the judge who sent this to full trial said it had to be considered as one transaction. Something this judge seems to have ignored.

Only a few minutes in and we've already got the grounds for SISU's next appeal.

Why would Higgs put more money into something they wanted their money back from when nobody at the time wanted it?

 

[Nick]

 

[Astute]

But that was a valuation after the event. When two clubs were playing there and not unused.

 

[Nick]

Why would Higgs put more money into something they wanted their money back from when nobody at the time wanted it?

Didn't the lease get extended / approved while Higgs still owned it though?

 

[Astute]

Didn't the lease get extended / approved while Higgs still owned it though?

When taken over by Wasps.

 

[Astute]

The lease was ACLs though?

And ACL was owned by who?

 

[skybluetony176]

Because by law you can't extend a lease that isn't yours. And the freeholder can only charge a certain % of the value to extend a lease.

Yes we should have had a lot longer lease from the start. But as the rent was the amount to cover the outstanding loan the rent payable would have been about the same.

I did it on the first place I bought. A flat with 80 years lease on it. Extended it by 90 years and cost me £2.5K plus expenses, I had to pay the landlords expenses to IIRC although it was about 20years and 3 properties ago so don’t remember exactly on the expenses. Anyway it didn’t add much value to the property if any at all, just made it easier to sell as it became easier to mortgage. Did this as soon as I moved in pretty much, couldn’t do it before as I didn’t own the lease and the previous owner was under no obligation to extend before selling.

 

[Nick]

When taken over by Wasps.

It was done in the same council meeting wasn't it, before Higgs had even accepted a bid?

 

[Colin Steins Smile]

From my understanding of the law is valuations are made at the exact time of sale. The fact the lease was extended, even 1 minute after the sale is immaterial.....assuming that had a positive impact on valuation of an asset. What is written in the contract of sale is the key element, if the extension of the lease is not in there, then it cannot be considered.

 

[Nick]

At this one, the judge is saying they didn't have a 250 year lease.

Isn't that incorrect? It isn't as if a few months down the line the council extended the lease, it was discussed / put through at the same time as whether to accept an offer for the Council share so it was known full well about the 250 year lease.

 

[Astute]

It was done in the same council meeting wasn't it, before Higgs had even accepted a bid?

As I said arranged but not finalised until afterwards.

 

[Nick]

From my understanding of the law is valuations are made at the exact time of sale. The fact the lease was extended, even 1 minute after the sale is immaterial.....assuming that had a positive impact on valuation of an asset. What is written in the contract of sale is the key element, if the extension of the lease is not in there, then it cannot be considered.

Isn't that the thing that the lease was agreed to be extended before the sale?

I can understand if they called a council meeting 5 minutes after the wasps takeover went through but it wasn't like that.

Surely it's no different to them agreeing off the record to build 1,000 houses on Coombe abbey with a buyer before they had agreed the sale and then just charging them for the land?

 

[Nick]

As I said arranged but not finalised until afterwards.

So why didn't they finalise it just before and charge Wasps millions more?

Is that not the argument that's being made?

Difference
Mr Thompson wants all elements of the sale considered together.

He said: “It was a single transaction and was envisaged as such, it just happened to take three months for some reason.”

But Justice McCombe says the council did not have a 250 year lease to sell at the time and that is why the valuations before and after the lease extension could not be compared.

 

[Astute]

At this one, the judge is saying they didn't have a 250 year lease.

Isn't that incorrect? It isn't as if a few months down the line the council extended the lease, it was discussed / put through at the same time as whether to accept an offer for the Council share so it was known full well about the 250 year lease.

But there still wasn't a 250 year lease until after the sale. So the sale was on the original lease. And the extension was on the original price. The price SISU said that was too high.

 

[Captain Dart]

From my understanding of the law is valuations are made at the exact time of sale. The fact the lease was extended, even 1 minute after the sale is immaterial.....assuming that had a positive impact on valuation of an asset. What is written in the contract of sale is the key element, if the extension of the lease is not in there, then it cannot be considered.

Sounds right. After all if SISU had purchased at that time the option of extending the lease would have become open to them.

 

[Astute]

So why didn't they finalise it just before and charge Wasps millions more?

Is that not the argument that's being made?

That is the argument that SISU are trying to put over. But has no legal standing. The judge has certainly confirmed this.

 

[chiefdave]

Why would Higgs put more money into something they wanted their money back from when nobody at the time wanted it?

Why would Higgs have put any more money in? It would have been ACL buying the lease extension not Higgs.