Administrators Report (7 Viewers)
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LJC_CCFC
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By Les Reid | 16 May 2013 15:29
An anxiously awaited report by Coventry City Football Club's administrator concludes he needs more time to investigate.
The full report by insolvency practitioner Paul Appleton, of David Rubin and Partners, has been seen by the Telegraph hours before he is due to brief other media.
It will come as a damp squib to many frustrated fans concerned about where their beloved club will be playing home matches next season, let alone whether it has any future at all.
Today's report to creditors - not expected to be publicly available via Companies House for at least five days - will be particularly disappointing to those fans who were hoping it could pave the way for a takeover of the football club - with widespread opposition to hedge fund owner Sisu and its proposal to take the club out of Coventry next season.
The report offers no conclusion on whether the 'golden shar'e in the Football League - which enables the club to play in the league - rested with Coventry City Football Club Limited before it was placed in administration by Sisu-related Cayman Islands hedge fund Arvo Master Fund.
The report claims Arvo is now owed more than £10million, up from the £8.5m heard in the High Court two months ago.
Former club directors Gary Hoffman and Joe Elliott, who are interested in buying out the club with backing from U.S property investor Preston Haskell IV, have insisted their bid depends on the golden share resting in the company in administration and being put up for sale.
Mr Appleton's report today states the administrator may have to go to court to help determine which assets lie in the company in administration - and in which company the share should rest.
But it adds, if no further information is not forthcoming, a decision over a sale could be made "very shortly".
Today's report may also deliver more frustration for the part council-owned Ricoh company Arena Coventry Limited, which wants a club takeover and is favourable to Mr Elliott's party also buying a half-stake in the stadium.
Mr Elliott earlier today stated his party had lodged with the adminstrator a formal bid to buy the club.
But the administrator's report only concludes there are two remaining parties which have "expressed an interest" - believed to be Mr Elliott's party and Coventry City Football Club (Holdings) Ltd, the Sisu-run company not in administration under which Coventry City have continued to play matches during the administration of its subsidiary company.
Today's report by the administrator may increase the urgency of Mr Elliott's party and ACL to put pressure on the Football League to make a statement regarding where the golden share should rest.
Mr Appleton's report also asserts Arena Coventry Limited - jointly owned by Coventry City Council and the Alan Edward Higgs Trust - was actually owed a "net liability" of £600,000 by January this year - half of what ACL says it was owed in rent arrears, after taking into account that ACL had removed £500,000 from a rent deposit account.
Mr Appleton's report states that ACL - which as a creditor sought to force the company in administration in the High Court in March - had contended the CCFC Ltd company in administration effectively constituted the football club - or at least was "responsible for the club's footballing operations". The report also states ACL believe CCFC Ltd is the holder of the share in the Football League and Football Association, giving it the right to compete in their professional competitions.
Mr Appleton's report continues: "This suggestion is a bone of contention.
"Sisu have maintained that the footballing activities have been conducted through Holdings and that the legal and beneficial interest in both the Football League and the Football Association shares is held by Holdings.
"There are a number of competing views in this regarding, not least, the Football League and the Football Association, both of whom believe that the club's footballing activities ought to have been run through the company (CCFC Ltd).
"Notwithstanding these competing views, the rules of both the Football League and the Football Association confer a wider discretion upon those organisations relating to the decision as to whether or not it should register any proposed transfer."
Mr Appleton's report goes on to state: "Significant investigatory work has been undertaken in an attempt to resolve the issue over the entity within which the Football League share is held, together with the ownership of certain assets which, it could be presumed, ought to be owned by the entity holding the share.
"There are competing views as to the ownership of the share and assets, not least because of information in historic documents including statutory accounts, share registers etc which suggest that the club's assets are held in the company's name (CCFC Ltd).
"Further information is currently being sought in this regard, with enquiries being made on the companies current and former auditors, the Football League and Football Association, among others."
Crucially, Mr Appleton's report continues: "We have yet to form a definitive view while further information and documentation is being sought.
"It ought to be clarified that, in the absence of specific, unchallengeable evidence, it may well be necessary for us to make an application to the court for the purpose of seeking its directions with a view to determining the position.
"Notwithstanding the above, we have been contacted by a number of parties expressing interest in whatever assets may be owned by the company.
"Preliminary discussions have been held with each party and, perhaps unsurprisingly, a number of them have withdrawn interest as a direct result of the ongoing argument over the ownership of assets.
"However, a number of parties remain interested, and notwithstanding the ongoing arguments over the ownership of the assets, we are continuing to engage with those parties to establish if it is possible to facilitate a sale process and whatever rights, title and interest the company may have in assets that will be acquired.
"In this regard, two parties have suggested that they may be interested in participating in a sale under those terms and a decision is this regard is likely to be made very shortly if further evidence is not forthcoming."
The report states fees incurred by the administrator so far are £163,294 plus VAT for 475 hours' work since his appointment up to May 14. The administrator's solicitors, Stephenson Harwood LLP, had incurred another £143,646 costs plus VAT, the report adds. That money would have to come out of the proceeds of any sale.
The administrator's report contends they company' s management accounts for the year ended May 31, 2012, discloses that the company's turnover was £9.4million, and a loss was recorded of £3.2million.
It claims the total liabilities are now £69million.
Mr Appleton's report also states he has six months to investigate the conduct of the club's directors and former directors over the last three years. They are listed as current CCFC Ltd director Tim Fisher, Walter Bosco, Leonard Brody, John Clarke, Paul Clouting, Ken Dulieu, Joe Elliot, Gary Hoffman, Onye Igwe and Ray Ranson.
Mr Appleton's report also states a meeting of creditors will be held on May 29 at the Hilton hotel in Coventry.
His report proposes that the administrator is likely to recommend that the company should move from either voluntary liquidation by creditors, or that the company should exit administration through a Creditors Voluntary Arrangement, in which a majority of creditors would have to agree to his proposals for a return of some of the monies they are owed.
Mr Appleton's proposals for creditors are accompanied in the report by a statement of the accounts for CCFC Ltd by Tim Fisher up to March 21 this year, which highlights what he claims are the assets resting in CCFC Ltd.
It states the assets in CCFC Ltd include the lease and licence to play at the Ricoh; players' registrations, with a nominal value of £466,762; a council rates refund worth £395,496, pre-payments of £176,725 and accrued income of £78,285.
But Mr Fisher's report appears to contend the players' registrations are worthless to the company in administration, with his contention the players' contracts are in Holdings, and that the total of what the real assets are worth is £395,496 - relating to the refund due for rates payments.
Of that, £313,381 would go to Arvo as a secured creditor, and £82,095 to unsecured creditors.
Mr Appleton said from his investigation so far no players or staff contracts rested in the company in administration.
The report claims Sisu's parent company of CCFC Holdings, Sky Blue Sports and Leisure, is owed £14m; Holdings £44m; ACL £636,381 (which deducts matchday costs paid to ACL over the last year); and Arvo is owed £10.2m.
It leaves estimated total liabilities of £69,727,625.
An anxiously awaited report by Coventry City Football Club's administrator concludes he needs more time to investigate.
The full report by insolvency practitioner Paul Appleton, of David Rubin and Partners, has been seen by the Telegraph hours before he is due to brief other media.
It will come as a damp squib to many frustrated fans concerned about where their beloved club will be playing home matches next season, let alone whether it has any future at all.
Today's report to creditors - not expected to be publicly available via Companies House for at least five days - will be particularly disappointing to those fans who were hoping it could pave the way for a takeover of the football club - with widespread opposition to hedge fund owner Sisu and its proposal to take the club out of Coventry next season.
The report offers no conclusion on whether the 'golden shar'e in the Football League - which enables the club to play in the league - rested with Coventry City Football Club Limited before it was placed in administration by Sisu-related Cayman Islands hedge fund Arvo Master Fund.
The report claims Arvo is now owed more than £10million, up from the £8.5m heard in the High Court two months ago.
Former club directors Gary Hoffman and Joe Elliott, who are interested in buying out the club with backing from U.S property investor Preston Haskell IV, have insisted their bid depends on the golden share resting in the company in administration and being put up for sale.
Mr Appleton's report today states the administrator may have to go to court to help determine which assets lie in the company in administration - and in which company the share should rest.
But it adds, if no further information is not forthcoming, a decision over a sale could be made "very shortly".
Today's report may also deliver more frustration for the part council-owned Ricoh company Arena Coventry Limited, which wants a club takeover and is favourable to Mr Elliott's party also buying a half-stake in the stadium.
Mr Elliott earlier today stated his party had lodged with the adminstrator a formal bid to buy the club.
But the administrator's report only concludes there are two remaining parties which have "expressed an interest" - believed to be Mr Elliott's party and Coventry City Football Club (Holdings) Ltd, the Sisu-run company not in administration under which Coventry City have continued to play matches during the administration of its subsidiary company.
Today's report by the administrator may increase the urgency of Mr Elliott's party and ACL to put pressure on the Football League to make a statement regarding where the golden share should rest.
Mr Appleton's report also asserts Arena Coventry Limited - jointly owned by Coventry City Council and the Alan Edward Higgs Trust - was actually owed a "net liability" of £600,000 by January this year - half of what ACL says it was owed in rent arrears, after taking into account that ACL had removed £500,000 from a rent deposit account.
Mr Appleton's report states that ACL - which as a creditor sought to force the company in administration in the High Court in March - had contended the CCFC Ltd company in administration effectively constituted the football club - or at least was "responsible for the club's footballing operations". The report also states ACL believe CCFC Ltd is the holder of the share in the Football League and Football Association, giving it the right to compete in their professional competitions.
Mr Appleton's report continues: "This suggestion is a bone of contention.
"Sisu have maintained that the footballing activities have been conducted through Holdings and that the legal and beneficial interest in both the Football League and the Football Association shares is held by Holdings.
"There are a number of competing views in this regarding, not least, the Football League and the Football Association, both of whom believe that the club's footballing activities ought to have been run through the company (CCFC Ltd).
"Notwithstanding these competing views, the rules of both the Football League and the Football Association confer a wider discretion upon those organisations relating to the decision as to whether or not it should register any proposed transfer."
Mr Appleton's report goes on to state: "Significant investigatory work has been undertaken in an attempt to resolve the issue over the entity within which the Football League share is held, together with the ownership of certain assets which, it could be presumed, ought to be owned by the entity holding the share.
"There are competing views as to the ownership of the share and assets, not least because of information in historic documents including statutory accounts, share registers etc which suggest that the club's assets are held in the company's name (CCFC Ltd).
"Further information is currently being sought in this regard, with enquiries being made on the companies current and former auditors, the Football League and Football Association, among others."
Crucially, Mr Appleton's report continues: "We have yet to form a definitive view while further information and documentation is being sought.
"It ought to be clarified that, in the absence of specific, unchallengeable evidence, it may well be necessary for us to make an application to the court for the purpose of seeking its directions with a view to determining the position.
"Notwithstanding the above, we have been contacted by a number of parties expressing interest in whatever assets may be owned by the company.
"Preliminary discussions have been held with each party and, perhaps unsurprisingly, a number of them have withdrawn interest as a direct result of the ongoing argument over the ownership of assets.
"However, a number of parties remain interested, and notwithstanding the ongoing arguments over the ownership of the assets, we are continuing to engage with those parties to establish if it is possible to facilitate a sale process and whatever rights, title and interest the company may have in assets that will be acquired.
"In this regard, two parties have suggested that they may be interested in participating in a sale under those terms and a decision is this regard is likely to be made very shortly if further evidence is not forthcoming."
The report states fees incurred by the administrator so far are £163,294 plus VAT for 475 hours' work since his appointment up to May 14. The administrator's solicitors, Stephenson Harwood LLP, had incurred another £143,646 costs plus VAT, the report adds. That money would have to come out of the proceeds of any sale.
The administrator's report contends they company' s management accounts for the year ended May 31, 2012, discloses that the company's turnover was £9.4million, and a loss was recorded of £3.2million.
It claims the total liabilities are now £69million.
Mr Appleton's report also states he has six months to investigate the conduct of the club's directors and former directors over the last three years. They are listed as current CCFC Ltd director Tim Fisher, Walter Bosco, Leonard Brody, John Clarke, Paul Clouting, Ken Dulieu, Joe Elliot, Gary Hoffman, Onye Igwe and Ray Ranson.
Mr Appleton's report also states a meeting of creditors will be held on May 29 at the Hilton hotel in Coventry.
His report proposes that the administrator is likely to recommend that the company should move from either voluntary liquidation by creditors, or that the company should exit administration through a Creditors Voluntary Arrangement, in which a majority of creditors would have to agree to his proposals for a return of some of the monies they are owed.
Mr Appleton's proposals for creditors are accompanied in the report by a statement of the accounts for CCFC Ltd by Tim Fisher up to March 21 this year, which highlights what he claims are the assets resting in CCFC Ltd.
It states the assets in CCFC Ltd include the lease and licence to play at the Ricoh; players' registrations, with a nominal value of £466,762; a council rates refund worth £395,496, pre-payments of £176,725 and accrued income of £78,285.
But Mr Fisher's report appears to contend the players' registrations are worthless to the company in administration, with his contention the players' contracts are in Holdings, and that the total of what the real assets are worth is £395,496 - relating to the refund due for rates payments.
Of that, £313,381 would go to Arvo as a secured creditor, and £82,095 to unsecured creditors.
Mr Appleton said from his investigation so far no players or staff contracts rested in the company in administration.
The report claims Sisu's parent company of CCFC Holdings, Sky Blue Sports and Leisure, is owed £14m; Holdings £44m; ACL £636,381 (which deducts matchday costs paid to ACL over the last year); and Arvo is owed £10.2m.
It leaves estimated total liabilities of £69,727,625.
ccfc92
Well-Known Member
As in Mr fisher etc?
N how have they ran up 300k costs already? As in the administrators ffs!
spwaverley4916
Active Member
so in laymans terms -- we are still in the crap !!!!!!!!!
Mary_Mungo_Midge
Well-Known Member
Ccfcisparks
Well-Known Member
He has had 6 weeks to make a decision and he still can't!
ccfc92
Well-Known Member
And made 150k
Mary_Mungo_Midge
Well-Known Member
No debt? I'd been wondering what old Aldridge had been up to.....
SkyblueBri
Well-Known Member
At this rate we will owe £90 m by the start of the new season
trondegilsoltvedt97
Active Member
Well its 69m- but owed pretty much just to Holdings or Sisu companies... Whilte the ACL figure is less than half what they has been previously reported.
D
Deleted member 2526
Guest
"Mr Appleton's report also states he has six months to investigate the conduct of the club's directors and former directors over the last three years. They are listed as current CCFC Ltd director Tim Fisher, Walter Bosco, Leonard Brody, John Clarke, Paul Clouting, Ken Dulieu, Joe Elliot, Gary Hoffman, Onye Igwe and Ray Ranson."
Who the f*** is Walter Bosco?
Who the f*** is Walter Bosco?
J
Jack Griffin
Guest
How can losses go up £10M/month when the previous year the company lost £3.2M.. this is a scandalous situation of fiscal manipulation..
inside track
New Member
No it doesn't! It says he "leaves City fans in limbo"!
Disorganised1
New Member
It's all a fraud - we can only pray a good investigative journalist comes in.
Goodbye Football Club
Goodbye Football Club
Mary_Mungo_Midge
Well-Known Member
We have debt inflation that would even make Robert Mugabe wince.....
chiefdave
Well-Known Member
He is / was part of SISU, didn't he repalce Onye when he got the boot before Joy decided to run things personally?
inside track
New Member
He is a former director of Sisu, now working for another investment company.
trondegilsoltvedt97
Active Member
Where does it say that?
D
Deleted member 5849
Guest
Some big stuff in there though.
Sisu have maintained that the footballing activities have been conducted through Holdings and that the legal and beneficial interest in both the Football League and the Football Association shares is held by Holdings... There are competing views as to the ownership of the share and assets, not least because of information in historic documents including statutory accounts, share registers etc which suggest that the club's assets are held in the company's name (CCFC Ltd)."
Says what assumed, but implicit acknowledgement the challenge comes from the creditors.
"Further information is currently being sought in this regard, with enquiries being made on the companies current and former auditors, the Football League and Football Association, among others."
So he's looking not just to SISU for guidance, and this is good too.
"It ought to be clarified that, in the absence of specific, unchallengeable evidence, it may well be necessary for us to make an application to the court for the purpose of seeking its directions with a view to determining the position."
Not cheap, but it's the ultimate impartial arbiter. May not be what we'd want ideally, but it'd remove any suggestion of prejudice from either side.
"Mr Appleton's report also states he has six months to investigate the conduct of the club's directors and former directors over the last three years. They are listed as current CCFC Ltd director Tim Fisher, Walter Bosco, Leonard Brody, John Clarke, Paul Clouting, Ken Dulieu, Joe Elliot, Gary Hoffman, Onye Igwe and Ray Ranson."
6 months seems quite a long time, but someone investigating the conduct of the club's directors is surely a good thing? And if there are things to investigate, it can't necessarily be done quickly.
Sisu have maintained that the footballing activities have been conducted through Holdings and that the legal and beneficial interest in both the Football League and the Football Association shares is held by Holdings... There are competing views as to the ownership of the share and assets, not least because of information in historic documents including statutory accounts, share registers etc which suggest that the club's assets are held in the company's name (CCFC Ltd)."
Says what assumed, but implicit acknowledgement the challenge comes from the creditors.
"Further information is currently being sought in this regard, with enquiries being made on the companies current and former auditors, the Football League and Football Association, among others."
So he's looking not just to SISU for guidance, and this is good too.
"It ought to be clarified that, in the absence of specific, unchallengeable evidence, it may well be necessary for us to make an application to the court for the purpose of seeking its directions with a view to determining the position."
Not cheap, but it's the ultimate impartial arbiter. May not be what we'd want ideally, but it'd remove any suggestion of prejudice from either side.
"Mr Appleton's report also states he has six months to investigate the conduct of the club's directors and former directors over the last three years. They are listed as current CCFC Ltd director Tim Fisher, Walter Bosco, Leonard Brody, John Clarke, Paul Clouting, Ken Dulieu, Joe Elliot, Gary Hoffman, Onye Igwe and Ray Ranson."
6 months seems quite a long time, but someone investigating the conduct of the club's directors is surely a good thing? And if there are things to investigate, it can't necessarily be done quickly.
TheParsonsHose
Member
very poor if you ask me. All I need to know is where the fecking golden share is......we have lost the points now so it doesen't matter from that point of view although my fear is this is dragging on as SISU may have fecked up here and somebody can come along and buy CCFC LTD and with it the share. 
J
Jack Griffin
Guest
The quoted liabilities rose from £60M to ££69,727,625, in between court hearings including £1.5M extra for Avro (how?).. the annual accounts to May 2012 state the company lost £3.2M, so clearly the way the thing was run has been radically altered, and clandestinly at that, keeping interested stakeholders in the dark.
It smells!
trondegilsoltvedt97
Active Member
Where do you get the 60m from- the previous court hearing? Wasn't that if you like an guess-timate before he did anything, and this is the conclusion of the investigation- a very specific figure
I suppose the difference between now and last year would be the reduction in revenue due to relegation- TV payments, Premier League solidarity and ticket sales.
I suppose the difference between now and last year would be the reduction in revenue due to relegation- TV payments, Premier League solidarity and ticket sales.
dongonzalos
Well-Known Member
£350 an hour.
trondegilsoltvedt97
Active Member
RegTheDonk
Well-Known Member
very poor if you ask me. All I need to know is where the fecking golden share is......we have lost the points now so it doesen't matter from that point of view although my fear is this is dragging on as SISU may have fecked up here and somebody can come along and buy CCFC LTD and with it the share.
Agreed, VERY poor re. the share. 475 hours work, with a bill (including the admin's solicitors) of a third of a million - AND THEY STILL DON'T FRIGGIN KNOW????
Oh, but hes found out that there's nearly £70 million owned to the multi limbed beast that is SISU/AVRO/PERSIL or just whatever names they decide to shift money around. Jesus H Christ, with all the double dealing they've done, creating companies, hiding money in the Clayman Isles or whatever - he can find out what they're supposed to be owed. BUT NO CLUE ON THE GOLDEN SHARE!!
This blokes a friggin joke to be honest.
D
Deleted member 5849
Guest
They never explained that to me when I was choosing my A levels and degree.