Court Case Thread! June 2018 (13 Viewers)

[chiefdave]

Which I guess is the stuff OSB has said before that's referred to?

The fact that Wasps purchased ACL and that some of the valuations we know of, particularly those used by Wasps for the bond are just for the lease is understood by pretty much everyone isn't it? Its just shorthand that people don't explicitly state it every time they are talking about valuations.

Doesn't change the fact the two are linked.

At the end of the day Wasps purchased 100% of ACL and the 250 year lease for a total of £6.5m. ACLs biggest debt was the £13.4m loan to the council and its biggest asset was the lease which was valued at £48.5m by S&P.

To me it seems that either the sale price for ACL was very low or the valuation of the lease is too high.

 

---

[Deleted member 5849]

It says committed to doesn't it, SISU might have know of the interest, not that it was a fait accompli like it really was which was contrary to the council's public statements.

What you heard within the council might be different though Jack

It could of course have been a fait accompli, SISU may have moved the club back trying to stop it (or at least hoping for public opinion to then be on their side) but for the purposes of this court argument, a certain description takes place.

Let's face it, there's probably a lot going on behind the scenes with all parties that won't fit the desired narrative.

 

[Grendel]

Live: Day two of Ricoh Arena row in Court of Appeal
12:41Katy Hallam-COV Witness statement
Mr Thompson is discussing Joy Seppala’s witness statement.
He says the statement reveals how unsuccessful negotiations had been made with the head of council at the end of 2013.
He said ultimately “the group returned to the ground apparently as the occupier of the ground” as a trust-building exercise between CCFC and the council.
He said CCFC were “not very happy” when it was found out that it had committed to the sale to Wasps.

Now I thought everybody knew that Wasps were moving in when City moved back, but Sepalla seems to be suggesting this was a surprise to her!

The council said they were not - are you saying they are liars?

 

[chiefdave]

That would be the logical thing, then if there is a valuation for what was purchased by Wasps that shows it was done by an independent company and then documents showing Wasps paying more then isn't that case solved?

That's my thinking. If the valuation backed up the sale price they would get it in front of the judge ASAP. Once you've got an independent valuation giving a price at or lower than the sale price SISUs case collapses. Which then makes you wonder why they don't want to provide that valuation.

Would make sense to me for the judge to order them to provide the valuation. They wouldn't be able to ignore that request the way they could the request from SISUs QC.

 

[Nick]

That's my thinking. If the valuation backed up the sale price they would get it in front of the judge ASAP. Once you've got an independent valuation giving a price at or lower than the sale price SISUs case collapses. Which then makes you wonder why they don't want to provide that valuation.

Would make sense to me for the judge to order them to provide the valuation. They wouldn't be able to ignore that request the way they could the request from SISUs QC.

Wasps and the Council referred to the valuation but not sure if it's been shared yet? I know they weren't keen on sharing one in the last hearing for some reason.

It would be an open and shut case, if it was below value then it wouldn't be the council's fault as they had been advised by specialists.

 

[wingy]

F**k me
Some of you guys started well before play today!

 

[Magwitch]

Hi

That's my thinking. If the valuation backed up the sale price they would get it in front of the judge ASAP. Once you've got an independent valuation giving a price at or lower than the sale price SISUs case collapses. Which then makes you wonder why they don't want to provide that valuation.

Would make sense to me for the judge to order them to provide the valuation. They wouldn't be able to ignore that request the way they could the request from SISUs QC.

Been reading your theories on this for months even years, don’t think you’ve been right yet, as we are again in a sisu appeal.

 

[Nick]

Hi

Been reading your theories on this for months even years, don’t think you’ve been right yet, as we are again in a sisu appeal.

Can't see how it's incorrect to suggest in a case about something being undersold for them to produce the independent valuation they had before they sold it?

If somebody tried to say I undersold my house, I'd just show them the valuation I had done and shut them up

 

[Magwitch]

But has a judge agreed re that yet ?

 

[Nick]

But has a judge agreed re that yet ?

Not sure why it would make somebody incorrect for suggesting it when it's common sense whether the judge has said it or not. If the Council are saying they sold it at a value based on the valuation, just hand them the valuation and let them compare that with the documents from the sale and job done.

 

[oldskyblue58]

Meanwhile in the real world what open market was there for a lease extension a third party could not earn from for 38 years? Whilst ACL is in the possession of the original lease then where is the market for the lease or the extension unless ACL agree to sell? Legally CCC might own the freehold but ACL (a separate legal entity in law) own the lease and it was not CCC's to sell. An extension legally requires ACL's agreement. Personally I wouldn't bid a penny for it let alone £1m, so I don't think it had a market value in reality

For there to be an open market you would have to remove ACL and compensate ACL for the disposal of its asset & business. That would not be the net assets it would be the asset value out of which ACL would settle its own liabilities. Last time I looked the lease in the ACL accounts 2014 was valued at £18m fixed assets at 5m and then you would need to add on the compensation for loss of trade/goodwill. That's before you buy the lease for 250 years, which it is argued is worth £47m ........ or force ACL into liquidation (now where have I seen that ?)

ACL did not have any long term clients other than the hotel and Casino but it was not unused as a site. The value pre sale would reflected that.

After the sale there was at least one new long term tenant, Wasps. If there was a long lease given to the rugby team for say 50 years by ACL (Two separate companies in same group) then that adds value to the lease owned by ACL. Say it was 500k for 50 years then net present value of that at a rate of 5% is something like 9.6m (that's value that did not exist pre sale). The thing is because of the way company law works there could be a rent but in effect never paid in the group as a whole so a full market rent could be charged (which in turn increases lease value in ACL)

Net present value is a calculation of an amount(s) payable in the future over a number of years/periods stated as if all received today. Example of calculator here Net Present Value Calculator

ACL group turnover pre sale 12.1m after sale to wasps in excess of 19m by 30/06/2016. The Strutt & Parker valuations were largely based on trading I believe, so you would expect the new valuations to be higher than the pre sale one

In the four years since 2014 we are told it cost CCFC £100k per year in rent ....... the NPV of that to Wasps was £372k

ACL/Wasps/CCC still have reversionary access to the original lease (see bond terms etc)

Question was the council agreement of the lease extension in the CCC meeting an agreement of the amount or the process/authority to dispose? There is an important difference

Final point in October 2014 Wasps were buying 50% from the council (not a controlling interest) of what was not of what they hoped to change it into

 

[Colin Steins Smile]

From my understanding, whilst the sale of 50% of the Ricoh is one transaction & the extension of the lease being a second [albeit within a similar timeframe] there is a third aspect to this from CCC's view point. That being the development of business around the Ricoh and an expectation that the owners of the stadium would be in a better position than CCC to develop new business, which would increase business rates payable to the council.

 

[Nick]

Meanwhile in the real world what open market was there for a lease extension a third party could not earn from for 38 years? Whilst ACL is in the possession of the original lease then where is the market for the lease or the extension unless ACL agree to sell? Personally I wouldn't bid a penny for it let alone £1m, so I don't think it had a market value in reality

For there to be an open market you would have to remove ACL and compensate ACL for the disposal of its asset & business. That would not be the net assets it would be the asset value out of which ACL would settle its own liabilities. Last time I looked the lease in the ACL accounts 2014 was valued at £18m fixed assets at 5m and then you would need to add on the compensation for loss of trade/goodwill. That's before you buy the lease for 250 years, which it is argued is worth £47m ........ or force ACL into liquidation (now where have I seen that ?)

ACL did not have any long term clients other than the hotel and Casino but it was not unused as a site. The value pre sale would reflected that.

After the sale there was at least one new long term tenant, Wasps. If there was a long lease given to the rugby team for say 50 years by ACL (Two separate companies in same group) then that adds value to the lease owned by ACL. Say it was 500k then net present value of that at a rate of 5% is something like 9.6m (that's value that did not exist pre sale). The thing is because of the way company law works there could be a rent but in effect never paid in the group as a whole

Net present value is a calculation of an amount(s) payable in the future over a number of years/periods stated as if all received today. Example of calculator here Net Present Value Calculator

ACL group turnover pre sale 12.1m after sale to wasps in excess of 19m by 30/06/2016. The Strutt & Parker valuations were largely based on trading I believe, so you would expect the new valuations to be higher than the pre sale one

In the four years since 2014 we are told it cost CCFC £100k per year in rent ....... the NPV of that was £372k

Surely they just market it with a 250 year lease which was approved before the sale anyway if the 38 year lease was a stumbling block?

That's before you buy the lease for 250 years, which it is argued is worth £47m

I might be wrong but are you now saying that it would put the open market off because of the lease being worth £47m as one of the factors? Surely it could go on the open market with the same terms and way that Wasps did it?

That way if it was marketed the same thing that Wasps got they could see if it could have got more? I may well just be reading what you have put wrong as it is a bit complicated

 

[Nick]

From my understanding, whilst the sale of 50% of the Ricoh is one transaction & the extension of the lease being a second [albeit within a similar timeframe] there is a third aspect to this from CCC's view point. That being the development of business around the Ricoh and an expectation that the owners of the stadium would be in a better position than CCC to develop new business, which would increase business rates payable to the council.

What development of business?

 

[chiefdave]

Meanwhile in the real world what open market was there for a lease extension a third party could not earn from for 38 years? Whilst ACL is in the possession of the original lease then where is the market for the lease or the extension unless ACL agree to sell?

But on the open market what has greater value, ACL with a 38 lease or ACL with a 250 year lease?

 

[Nick]

Better than expected
Mr Thompson said “Wasps is doing better than expected” and the arena has increased substantially in value.

He said it is now worth three times what Wasps paid for it.

He said the focus for the UK was the loss to the exchequer and the key issue in EU law is the benefit conferred to Wasps.

 

[chiefdave]

Been reading your theories on this for months even years, don’t think you’ve been right yet, as we are again in a sisu appeal.

How is it a theory?

The court case is over the amount Wasps paid, there exists an independent valuation for that. Surely if that valuation shows the price you paid was in line with the valuation you put that in front of the judge and its case closed.

If those that had the valuation carried out don't want any details know then that raises the question why?

 

[eastwoodsdustman]

What development of business?

There was a stipulation at the time that the surrounding area was to be developed wasn’t there? I do remember something about.

 

[Nick]

Better than expected
Mr Thompson said “Wasps is doing better than expected” and the arena has increased substantially in value.

He said it is now worth three times what Wasps paid for it.

He said the focus for the UK was the loss to the exchequer and the key issue in EU law is the benefit conferred to Wasps.

 

[wingy]

Surely they just market it with a 250 year lease which was approved before the sale anyway if the 38 year lease was a stumbling block?



I might be wrong but are you now saying that it would put the open market off because of the lease being worth £47m as one of the factors? Surely it could go on the open market with the same terms and way that Wasps did it?

That way if it was marketed the same thing that Wasps got they could see if it could have got more? I may well just be reading what you have put wrong as it is a bit complicated

What open market?

 

[chiefdave]

No judgement today but not back in court tomorrow? Does that mean the judges don't think its an open and shut case and want to dig deeper in to the documents provided?

 

[Nick]

No judgement today but not back in court tomorrow? Does that mean the judges don't think its an open and shut case and want to dig deeper in to the documents provided?

Just need to wait for the pr games to start again which will tell when one of them knows the outcome

 

[Otis]

Lost another pint
.

I've lost the will to live.

 

[Voice_of_Reason]

Do we want SISU to win so we can get a share of the Ricoh or lose because we despise them ?

 

[Nick]

Court rises
That seems to be it for the representations today.
A judgement will not be delivered this afternoon.

The judges will go away and consider the information.

But Justice Leveson said if a decision was made in the claimants favour they would sit again to deal with potential remedies.

The court is rising now.

Anti Climax.

 

[Otis]

Do we want SISU to win so we can get a share of the Ricoh or lose because we despise them ?

Want whatever is best for Coventry City.

Don't want the people of Coventry screwed over either though.

Best thing to my mind, considering we have no plans at all for a new stadium, is to get a share of the Ricoh.

 

[oldskyblue58]

Surely they just market it with a 250 year lease which was approved before the sale anyway if the 38 year lease was a stumbling block?



I might be wrong but are you now saying that it would put the open market off because of the lease being worth £47m as one of the factors? Surely it could go on the open market with the same terms and way that Wasps did it?

That way if it was marketed the same thing that Wasps got they could see if it could have got more? I may well just be reading what you have put wrong as it is a bit complicated

Only if ACL as a company agree to it. CCC were only 50% of it. ACL would still own the lease but this time with 250 years to go and a far greater value. It would be ACL putting the lease on the market either the original one or the long one it had acquired. Could actually have made it unsaleable to Wasps or SISU. The time for a longer lease was at the start in 2007, we might never have got in this mess

ACL in 2014 had been forced pretty close to the wall, it would not have been an easy finance of the lease extension because ACL were running out of cash. Could CCC have lent ACL the money?..... I think we might well have had JR3 if they had, especially if it increased the value to acquire the site (completely opposite of what SISU were trying to achieve allegedly). But according to SISU the lease for 250 years was worth 47m where was ACL going to get even half that ? Even the short lease had a market value of £18m . ACL would have had to be seen to pay for it because of state aid and the scrutiny it was already under

SISU admitted yesterday they were around but not really interested

 

[Grendel]

Meanwhile in the real world what open market was there for a lease extension a third party could not earn from for 38 years? Whilst ACL is in the possession of the original lease then where is the market for the lease or the extension unless ACL agree to sell? Legally CCC might own the freehold but ACL (a separate legal entity in law) own the lease and it was not CCC's to sell. An extension legally requires ACL's agreement. Personally I wouldn't bid a penny for it let alone £1m, so I don't think it had a market value in reality

For there to be an open market you would have to remove ACL and compensate ACL for the disposal of its asset & business. That would not be the net assets it would be the asset value out of which ACL would settle its own liabilities. Last time I looked the lease in the ACL accounts 2014 was valued at £18m fixed assets at 5m and then you would need to add on the compensation for loss of trade/goodwill. That's before you buy the lease for 250 years, which it is argued is worth £47m ........ or force ACL into liquidation (now where have I seen that ?)

ACL did not have any long term clients other than the hotel and Casino but it was not unused as a site. The value pre sale would reflected that.

After the sale there was at least one new long term tenant, Wasps. If there was a long lease given to the rugby team for say 50 years by ACL (Two separate companies in same group) then that adds value to the lease owned by ACL. Say it was 500k for 50 years then net present value of that at a rate of 5% is something like 9.6m (that's value that did not exist pre sale). The thing is because of the way company law works there could be a rent but in effect never paid in the group as a whole so a full market rent could be charged (which in turn increases lease value in ACL)

Net present value is a calculation of an amount(s) payable in the future over a number of years/periods stated as if all received today. Example of calculator here Net Present Value Calculator

ACL group turnover pre sale 12.1m after sale to wasps in excess of 19m by 30/06/2016. The Strutt & Parker valuations were largely based on trading I believe, so you would expect the new valuations to be higher than the pre sale one

In the four years since 2014 we are told it cost CCFC £100k per year in rent ....... the NPV of that to Wasps was £372k

ACL/Wasps/CCC still have reversionary access to the original lease (see bond terms etc)

Question was the council agreement of the lease extension in the CCC meeting an agreement of the amount or the process/authority to dispose? There is an important difference

Final point in October 2014 Wasps were buying 50% from the council (not a controlling interest) of what was not of what they hoped to change it into

Since the initial valuation has there ever been another one other than an internal assessment?

 

[oldskyblue58]

not surprised that we have seen this adjourned but still time for a decision today

 

[Nick]

Only if ACL as a company agree to it. CCC were only 50% of it. ACL would still own the lease but this time with 250 years to go and a far greater value. It would be ACL putting the lease on the market either the original one or the long one it had acquired. Could actually have made it unsaleable to Wasps or SISU. The time for a longer lease was at the start in 2007, we might never have got in this mess

ACL in 2014 had been forced pretty close to the wall, it would not have been an easy finance of the lease extension because ACL were running out of cash. Could CCC have lent ACL the money?..... I think we might well have had JR3 if they had, especially if it increased the value to acquire the site (completely opposite of what SISU were trying to achieve allegedly). But according to SISU the lease for 250 years was worth 47m where was ACL going to get even half that ? ACL would have had to be seen to pay for it because of state aid and the scrutiny it was already under

SISU admitted yesterday they were around but not really interested

Surely it wouldn't be ACL putting the lease on the market, it would be ACL being put on the market with the lease included?

Agree about the long lease year ago, surely if ACL could have got a longer lease they could have refinanced against the lease with much better terms to ease the pressure and just got a bit extra to pay for the lease extension, would that not have worked?

 

[tisza]

are Wasps doing better then expected? Is it worth 3 x more since Wasps took over? Thought they were doing okay at best.

 

[oldskyblue58]

my understanding was that the banks required regular valuations in support of their finance, they wouldn't rely on a directors estimate. Because it was the banks valuation then it wouldn't be included in the accounts without the banks say so

 

[HuckerbyDublinWhelan]

I’m in the understanding that the lease reverts back to the council in case ACL goes bust.

In that event, wouldn’t the council have made more by allowing that to happen and selling a brand new lease on the unecumbered Ricoh?

 

[sw88]

Ah man, so looks like it’s going to be sudden death after all! Can’t wait for this to all be over **rolls eyes**

 

[Colin Steins Smile]

What development of business?

Consistent government policy has been that the private sector is better position for the development of business. So whilst, we have not seen large scale developments it is still relatively early in the business cycle, but that's not to say that it won't happen and if it did.....is the private sector better placed for this role that CCC?