Are Otium Directors breaking the law? (1 Viewer)

[Noggin]

The Companies Act says that directors have to act in the best interests of the company.

No one in their right mind can consider that playing in Northampton rather than accepting a cheap rent deal at the Ricoh is in the best interests of the company, They have purposefully sabotaged their own company meaning it's revenues are a fraction of what they should be. How are they following their first statutory duty to promote the success of the company?

 

---

[Broken Hearted Sky Blue]

Standard business practice in the Cayman Islands I've heard somewhere:thinking about:

 

[The Gentleman]

Ask Sandra Garlick at the next pointless forum

 

[chiefdave]

The Companies Act says that directors have to act in the best interests of the company.

No one in their right mind can consider that playing in Northampton rather than accepting a cheap rent deal at the Ricoh is in the best interests of the company, They have purposefully sabotaged their own company meaning it's revenues are a fraction of what they should be. How are they following their first statutory duty to promote the success of the company?

Interesting point. Lets say there were breaking the law who would be the ones to take action, companies house? Wonder what their defence would be, they can't really come out and say we're trying to bankrupt another company causing taxpayers and a charity to lose money!

 

[Moff]

The law is an ass, and I am sure it would be difficult to prove

Sadly you usually find bastard Hedge Funds with a love for litigation are better versed at this than football fans who just want their club home

 

[bigfatronssba]

I await in anticipation to rfc's take on it.

 

[simple_simon]

A good point, but if anyone actually suggested this they would get a letter from the lawyers. We as supporters cannot take this sort of company on.
We need to get to them in other ways and let everyone know that we will not die without a fight.
Let's force them to sell up.

 

[Elvis Pressley]

Are Otium Evading Tax?

 

[The Gentleman]

Are Otium Evading Tax?

Are Otium actually paying for anything? Who's money are they using to prop us up? who do we have to pay it all back to? and at what rate?

 

[Skybluesquirrel]

I would imagine the directors could successfully argue that they are acting in the best interests of the company in the long term, so this is just part of plan for future sustainability. Fisher used this argument at the forum in the summer.

Otium are likely to incur losses for the next year or two - largely due to a reduction in income. Costs are likely to be a lot lower than the costs for CCFC ltd though. As such no tax will be due.

Arvo provide most (if not all) of the loans to the club now and the interest charged last year was in the region of the rent due on the Ricoh. Certainly over a million. Where arvo get the investment from nobody outside of Sisu seems to know.

 

[Samo]

I would imagine the directors could successfully argue that they are acting in the best interests of the company in the long term, so this is just part of plan for future sustainability. Fisher used this argument at the forum in the summer.

Otium are likely to incur losses for the next year or two - largely due to a reduction in income. Costs are likely to be a lot lower than the costs for CCFC ltd though. As such no tax will be due.

Arvo provide most (if not all) of the loans to the club now and the interest charged last year was in the region of the rent due on the Ricoh. Certainly over a million. Where arvo get the investment from nobody outside of Sisu seems to know.

Spot on. Close thread.

 

[italiahorse]

Are Otium Evading Tax?

More like offsetting profits against CCFC losses, so avoiding tax. Not illegal.
When I set up my business partnership, my losses I could use to get tax back I was paying in full time employment.
Once it became profitable I could then do it full time.
Helped out in them early days.

 

[Astute]

Spot on. Close thread.

Was it?

For starters the tax bill was part of the ongoing liquidation.

 

[Noggin]

I would imagine the directors could successfully argue that they are acting in the best interests of the company in the long term, so this is just part of plan for future sustainability. Fisher used this argument at the forum in the summer.

Otium are likely to incur losses for the next year or two - largely due to a reduction in income. Costs are likely to be a lot lower than the costs for CCFC ltd though. As such no tax will be due.

Arvo provide most (if not all) of the loans to the club now and the interest charged last year was in the region of the rent due on the Ricoh. Certainly over a million. Where arvo get the investment from nobody outside of Sisu seems to know.

I don't accept they can argue that successfully, they can only argue it when unchallenged, there is no way they can demonstrate that their actions are in the long term best interests of the club because they simply aren't. There is absolutely no legitimate argument against taking the free rent at the ricoh for this year and next.

 

[Samo]

Was it?

For starters the tax bill was part of the ongoing liquidation.

Fair enough, this part is spot on: ''I would imagine the directors could successfully argue that they are acting in the best interests of the company in the long term, so this is just part of plan for future sustainability''

 

[Samo]

I don't accept they can argue that successfully, they can only argue it when unchallenged, there is no way they can demonstrate that their actions are in the long term best interests of the club because they simply aren't. There is absolutely no legitimate argument against taking the free rent at the ricoh for this year and next.

There are a million business decisions made every day that may seem odd in the short term. I would not like to be the one paying to challenge them, would you?

 

[Grendel]

I'm actually embarrassed for the op. Does he really believe this pile of shit?

 

[Noggin]

I'm actually embarrassed for the op. Does he really believe this pile of shit?

I was asking a question, I don't see any short, medium or long term financial benefit for not moving back to Coventry with the free rent offer. You are welcome to attempt to justify it, but neither Fisher nor labovich have been able to make any sort of reasonable argument and so I doubt you can either.

 

[The Gentleman]

I'm actually embarrassed for the op. Does he really believe this pile of shit?

I don't quite understand your response, in general terms if the OP had said "do you think that any large business, corporation, private firm, or directors of such companies have ever broke the law". Anybody, anywhere at anytime can break the law.I don't know if the directors of Sisu or whatever else they like to call themselves have broke the law in terms of CCFC, but based on what the world has seen from past companies, directors or whatever breaking the law to suit their own ends, can you rule out 100% that they haven't broken any law?

 

[Noggin]

There are a million business decisions made every day that may seem odd in the short term. I would not like to be the one paying to challenge them, would you?

who was talking about paying to challenge anything and again id love to hear a sensible argument for the benefit of us being in northampton now rather than moving back in the short, medium or long term.

 

[limoncello]

I'm actually embarrassed for the op. Does he really believe this pile of shit?

Rather oddly he/she suggests on another thread that ACL would lower their asking price if the new buyers had the interests of the club at heart. Surely if ACL were to do this they would also be breaking the law?

 

[Noggin]

Rather oddly he/she suggests on another thread that ACL would lower their asking price if the new buyers had the interests of the club at heart. Surely if ACL were to do this they would also be breaking the law?

no he doesn't I suggest you read what I said again.

I said I think the owners of ACL are sick of the entire situation and would love to be shut of it, this means acl is likely to be available an attractive price. However this is only going to be the case if the people buying have the best interests of the club and city at heart.

 

[Grendel]

This is all just nonsense.

People who invest in hedge funds are high risk speculators who look for high returns but accept the associated risk. The chances of any return at the Ricoh are slim. The club has had one bankruptcy since going their and has lost money every season. Hedge fund investors have no interest in this type of strategy.

We know nothing about the investors on this project. We do know sisu have looked on investments previously as 5 or 10 year projects. The first strategy clearly was to gain promotion and sell as a premier club hence No interest in ground purchase.

Clearly this now becomes a 10 year project with a different emphasis. We no nothing about what the investors promise is. It certainly will not be a return as tenants to a ground and then attempt a promotion push - its vague and will have no interest.

It could be a promise if they attain the freehold of the Ricoh a link to reward or it could be reward off the back of a new stadium. Whatever it is its not illegal and its not against hedge fund ethos. Doing the opposite - what you suggest - would be.

 

[limoncello]

no he doesn't I suggest you read what I said again.

I said I think the owners of ACL are sick of the entire situation and would love to be shut of it, this means acl is likely to be available an attractive price. However this is only going to be the case if the people buying have the best interests of the club and city at heart.

But surely if the Companies Act says that directors have to act in the best interests of the company and ACL were to accept a lower bid than they could achieve elsewhere, they would not be acting in the best interests of the company? Maybe I'm missing something obvious but I can't see how you can suggest Otium's actions are illegal because the are not maximising income and then suggest ACL would do exactly that and not mention potential illegality.

 

[Grendel]

no he doesn't I suggest you read what I said again.

I said I think the owners of ACL are sick of the entire situation and would love to be shut of it, this means acl is likely to be available an attractive price. However this is only going to be the case if the people buying have the best interests of the club and city at heart.

More shit. Best interests at heart is by your own interpretation illegal as revenue is key. Attracting an alternative tenant would be the only thing they could do as they would have to maximise revenue. Free rent deals would, by your own assumption, be illegal. I assume you believe ACL were acting illegally by offering a free rent deal?

 

[chiefdave]

There are a million business decisions made every day that may seem odd in the short term. I would not like to be the one paying to challenge them, would you?

Let's just assume for a minute that SISU do intend to build a new stadium in the next 3 - 5 years. That leaves them with 2 options:

1) play at the Ricoh for free this season and £150K a year after that until new stadium is ready. Crowds would be a minimum of 10K, probably more with the way we are playing. Other associated revenues, merchandise etc, would increase.

2) play at Sixfields for £180K (?) a year until new stadium is ready. Crowds around 2K despite greatly reduced ticket prices. Other revenues low.

Would love to hear what argument SISU put forward that this is in the companies best interest.

 

[Jack Griffin]

Let's just assume for a minute that SISU do intend to build a new stadium in the next 3 - 5 years. That leaves them with 2 options:

1) play at the Ricoh for free this season and £150K a year after that until new stadium is ready. Crowds would be a minimum of 10K, probably more with the way we are playing. Other associated revenues, merchandise etc, would increase.

2) play at Sixfields for £180K (?) a year until new stadium is ready. Crowds around 2K despite greatly reduced ticket prices. Other revenues low.

Would love to hear what argument SISU put forward that this is in the companies best interest.

It will be more than 2 years at Sixfields, another 4 minimum.

 

[Bill Glazier]

Although they sail close to the wind I doubt anything sisu does is actually illegal. It ought to be, but that's another issue.
No I reckon the only pressure point we as fans have is to persuade the Football League to enforce their own rules. Sisu have absolutely no case for moving the club- financially or morally and the league needs to grow a pair and force Sisu to return. If Sisu say in that case we'll close the club then the league should take back the golden share, which is effectively the licence to operate a club called Coventry City in the football league, and award it or auction it to a fit a proper owner.
No idea if this is legally enforceable but it is what should happen and I hope the league are at least thinking about it.
In the meanwhile the more noise we make about our plight the more pressure the league will find themselves under.

 

[chiefdave]

It will be more than 2 years at Sixfields, another 4 minimum.

I know that, you know that. Labovich, Fisher and the FL all seem to think otherwise.

 

[shmmeee]

More shit. Best interests at heart is by your own interpretation illegal as revenue is key. Attracting an alternative tenant would be the only thing they could do as they would have to maximise revenue. Free rent deals would, by your own assumption, be illegal. I assume you believe ACL were acting illegally by offering a free rent deal?

What on earth are you on about?

How would gaining an anchor tenant be anything but beneficial to the business as a whole?

Also, the stated purpose of CNR (the holding company that owns the Council half) is I'd imagine to regenerate the North of Coventry, they are well within their rights to factor that into any business decision.

 

[Jack Griffin]

I know that, you know that. Labovich, Fisher and the FL all seem to think otherwise.

I doubt they are in any way naive about these things.

 

[chiefdave]

I doubt they are in any way naive about these things.

You're not suggesting that aren't being truthful with us are you?

 

[Jack Griffin]

You're not suggesting that aren't being truthful with us are you?

I would never say any such thing.

 

[Noggin]

This is all just nonsense.

People who invest in hedge funds are high risk speculators who look for high returns but accept the associated risk. The chances of any return at the Ricoh are slim. The club has had one bankruptcy since going their and has lost money every season. Hedge fund investors have no interest in this type of strategy.

We know nothing about the investors on this project. We do know sisu have looked on investments previously as 5 or 10 year projects. The first strategy clearly was to gain promotion and sell as a premier club hence No interest in ground purchase.

Clearly this now becomes a 10 year project with a different emphasis. We no nothing about what the investors promise is. It certainly will not be a return as tenants to a ground and then attempt a promotion push - its vague and will have no interest.

It could be a promise if they attain the freehold of the Ricoh a link to reward or it could be reward off the back of a new stadium. Whatever it is its not illegal and its not against hedge fund ethos. Doing the opposite - what you suggest - would be.

What I'm asking is nothing to do with a hedge fund, Otium is Coventry City Football club, the directors of Coventry City football club have to do what is in the best interests of Coventry City football club by Law, Their actions appear to everyone to be against the interests of Coventry city football club, so how are the directors fulfilling their most important obligation? Talk of investors and hedge funds is completely irrelevant to the question I asked.

 

[Grendel]

What I'm asking is nothing to do with a hedge fund, Otium is Coventry City Football club, the directors of Coventry City football club have to do what is in the best interests of Coventry City football club by Law, Their actions appear to everyone to be against the interests of Coventry city football club, so how are the directors fulfilling their most important obligation? Talk of investors and hedge funds is completely irrelevant to the question I asked.

Wrong. The owners have to satisfy their investors wishes and if that means playing on the isle of sky for 10 years its acceptable.