ACL Statement, Saturday 23 March (1 Viewer)

[Grendel]

"That statement seems clear to me. The important part is the reference to the annual return that clearly states the member of the Football League is CCFC Ltd not CCFC H Ltd dated 23/06/12"

If they shifted the golden share after June last year and the Football League allowed it, doesn't it make a nonsense of all the other administrations and points deductions etc? What is to stop any Club building up debts in company A, shift the golden share into company B and stick company A into admin and carry on as if nothing has happened. Have Sisu fooled the League or has the League just cocked up? Whichever it is there is going to be one hell of a noise from all the other clubs.

The scenario you refer to happens all the time. If say you own a small business you would normally run the business and the property as 2 separate entities. Walsall football club pays a whacking great rent to the person who owns Walsall football club - but to another holding company.

If anyone owned the Ricoh and the club the assets would a be split as separate companies to protect if one fell down.

 

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[lordsummerisle]

If you read the answers, they were also happy to cut down the escrow obligation by £300k, so I don't think so.

That would mean that only £200,000 would have to go back into the scrow account, but they would still have the original £500,000 for the rent arrears wouldn't it?

 

[Jack Griffin]

I don't usually post ACL statements, I make my own comments, but as it is a Saturday and the news media seem to be slow, I thought it might be a good idea if I put this up for people to read. I am sure that it will be used by the news media and they will add reactions and the like.

The ACL statement:

The Board of Arena Coventry Limited (ACL) is pleased by the decision by the High Court in London to adjourn ACL’s application for an administration order against Coventry City Football Club (CCFC) until Tuesday 26 March 2013. The application relates to the failure of CCFC to pay ACL £1.3 million in rent that ACL is lawfully owed for the use by CCFC of the Ricoh Arena.

It is clear to the Board that the High Court judge was as perplexed as the Board itself by the unclear and contradictory statement made last night by CCFC (Holdings) Ltd, the parent company of CCFC.

While publically available sources of information including the Football League Handbook and the annual return made by the Football League to Companies House (dated 23 June 2012) state that CCFC’s Football League share rests with Coventry City Football Club Ltd; the statement issued by CCFC suggests that all assets and liabilities relevant to this application have been moved to CCFC (Holdings) Ltd. ACL’s lawyers will now be writing to the Directors of CCFC, the Football League and the administrators appointed by CCFC to request more information about this matter.

The judge clearly agreed that there is a need to understand precisely where the business and the assets of CCFC actually lie and that additional time is now required for this to be investigated thoroughly. The Board shares this view and is surprised that CCFC did not choose to represent itself at such an important hearing at the High Court; the outcome of which was of critical importance to the supporters of CCFC and the people of Coventry, as well as CCFC’s creditors and suppliers.

The Board believes that CCFC supporters should feel reassured by the fact that this matter is now being dealt with by the High Court where the truth of the matter will now be uncovered. This is an unusual situation in which a creditor (ACL) is actually trying to save a debtor (CCFC).

The Board wishes also to reiterate that there is no truth whatsoever in suggestions reported by some media today that ACL will prevent CCFC from playing at the Ricoh Arena. The whole point of the course of legal action that the Board has taken is to ensure that a successful and sustainable Sky Blues team is able to play at the Ricoh Arena for many years to come.

Hindsight is a wonderful thing, but you should have named the whole CCFC group of companies in the application to the high court. They are inextricably linked & have no independant business apart from that directly associated with the football club.

 

[oldskyblue58]

Could the football league have allowed the transfer if asked by the club?

they could but i would guess they would want to know all the reasons why they need to before agreeing to it if indeed they ever did. If it formed some part of a scheme for insolvency i doubt league rules would permit it and would set aside such transfers. It is clearly part of such a scheme if the annual return is correct

Thing that bothers me about SISU saying that the share has been transferred is that I suspect they have simply done it internally then gone back to FL when it got questioned. They have done something similar previously, the Charity option was only ever held by CCFC but it was recorded and written down in value in SBS&L ..... I think you will find that PWKH would confirm it couldnt be transferred without the AEH Charity permission which has not been given.

Oh and btw that option dies with CCFC Limited

 

[Wrenstreetcarpark]

The scenario you refer to happens all the time. If say you own a small business you would normally run the business and the property as 2 separate entities. Walsall football club pays a whacking great rent to the person who owns Walsall football club - but to another holding company.

If anyone owned the Ricoh and the club the assets would a be split as separate companies to protect if one fell down.

Yes it happens all the time and the FL rules stop it happening in league clubs.

 

[Brighton Sky Blue]

That would mean that only £200,000 would have to go back into the scrow account, but they would still have the original £500,000 for the rent arrears wouldn't it?

It would mean that they're asking the club to repay something in the region of £700k rather than £1.3 million. Bear in mind that the escrow money (the original £520k) wasn't put there by the club.

 

[Nonleagueherewecome]

I understand your frustration and suspicion. I think most people would agree that the whole financial model of football in this country is broken. When the player wages exceed the total income of a club it is not sustainable. In 2005 when the Lease and Licence were agreed between ACL and CCFC the Club had two directors on the Board of ACL. The rent was set at the same level as at Highfield Road. That was the only comparable available and the only argument about it was from my late brother-in-law who suggested base rents at different levels in different leagues and with an escalator that would pay more if the gate was well over the average. This was rejected by the CCFC board who wanted to stick with the rental as we all now know it.

This is very important information that not many people were aware of!

 

[Jack Griffin]

"That statement seems clear to me. The important part is the reference to the annual return that clearly states the member of the Football League is CCFC Ltd not CCFC H Ltd dated 23/06/12"

If they shifted the golden share after June last year and the Football League allowed it, doesn't it make a nonsense of all the other administrations and points deductions etc? What is to stop any Club building up debts in company A, shift the golden share into company B and stick company A into admin and carry on as if nothing has happened. Have Sisu fooled the League or has the League just cocked up? Whichever it is there is going to be one hell of a noise from all the other clubs.

Expect a league rule change sometime soon. I reckon they got duped by weasel words & allowed it without understanding the implications.

 

[singers_pore]

This is very important information that not many people were aware of!

Agreed. However, it is important to bear in mind that the rent was paid to a company owned by the son of a director (McGinnity if I recall correctly). So the rental agreement was hardly on an arms length basis and was not an appropriate benchmark for setting the Ricoh Arena rent.

Anyway SISU are clearly a busted flush and the court will likely side with ACL. I just hope that any new owners sort all of this out correctly and unify the club and stadium before doing any deal with the administrators.

 

[Senior Vick from Alicante]

Thanks for your insight PWKH, postings from some one on the inside of the circle are greatly appreciated despite the negative comments that some feel they need to reply with. As you say if the board of the club back then decided against taking a linked package to league position and gates then that was their fault not the fault of the council nor ACL. As I see it, SISU are scrapping like a rabid dog and playing on fans emotions, only ACL have said that the reason for doing what they are doing is to try and stop the club from declining any further. The development oppertunity that can be afforded to any proposed buyer with the surrounding land and its potential to make the club self funding could make the package attractive, if the potential buyers are football people. I cant see any harm to the city for a shopping village or metro centre of some type the road links are their and theirs nothing of this ilk any where in the Midlands. My worry is that ACL and SISU will be locked in litigation for the next few years, the council have no intention of selling to SISU which means this will run and run as SISU have no intention of letting go. This ones for OSB, do you think that SISU bought CCFC to use as a vehicle to off set tax liabilities through its London office?

 

[Jack Griffin]

Oh and btw that option dies with CCFC Limited

That is interesting. But I suspect ACL will claim the group of companies can't simply walk away from their responsibillities & debts, it sets a bad precedent in law. In return I suspect ACL will not rescind the option.

 

[stupot07]

It would mean that they're asking the club to repay something in the region of £700k rather than £1.3 million. Bear in mind that the escrow money (the original £520k) wasn't put there by the club.

Yes it was.
Councillor Mutton revealed that ACL had been able to withdraw from a reserve of £500,000 deposited by Coventry City in one of the escrow accounts set up when the Ricoh was being built.


http://www.coventrytelegraph.net/co...ty-over-ricoh-arena-rent-deal-92746-31359530/

 

[luwalla]

Reading ACL's answers they already were happy to write off £800k.

However , reading SISUs stamens today, it seems ACL changed their position once they got to court and stated that they wants full settlement of the total debt.. Which it seems is one if the reasons SISU decided they had to vacant the premises

 

[Brighton Sky Blue]

Yes it was.
Councillor Mutton revealed that ACL had been able to withdraw from a reserve of £500,000 deposited by Coventry City in one of the escrow accounts set up when the Ricoh was being built.

Mutton has his facts wrong. The money was put there from a third party grant.

 

[Brighton Sky Blue]

However , reading SISUs stamens today, it seems ACL changed their position once they got to court and stated that they wants full settlement of the total debt.. Which it seems is one if the reasons SISU decided they had to vacant the premises

That isn't completely surprising though-the club had rejected every attempt at a compromise. If ACL had appointed their choice of administrator they would still likely have accepted the reduced figure-but with SISU now controlling it they want the arrears in full. The club has shown very little flexibility throughout this whole process.

 

[Godiva]

That is interesting. But I suspect ACL will claim the group of companies can't simply walk away from their responsibillities & debts, it sets a bad precedent in law. In return I suspect ACL will not rescind the option.

It is interesting as this may open the possibility of Higgs selling their shares to another party.
But will another party buy the shares at the calculated formel? Maybe the consortium of local businesses ... 'Down the Pipes' or whatever it's called.
Maybe ccc should buy the Higgs shares?

 

[katzenjammer]

PWKH, I put it to you that ACL only care about CCFC fans because of lost revenues on match day and it would be breaking the contract you signed with Compass. It's funny you didn't give a feck about fans when you said you could survive without a football club 2 months ago. Stinks of bullshit to me.

I've heard that your administrators plans were to close the academy to save costs? So much for caring about the future of the future of the football club.

 

[oldskyblue58]

That is interesting. But I suspect ACL will claim the group of companies can't simply walk away from their responsibillities & debts, it sets a bad precedent in law. In return I suspect ACL will not rescind the option.

option is not with ACL Jack its with the Charity

 

[luwalla]

That isn't completely surprising though-the club had rejected every attempt at a compromise. If ACL had appointed their choice of administrator they would still likely have accepted the reduced figure-but with SISU now controlling it they want the arrears in full. The club has shown very little flexibility throughout this whole process.

Yep not massively surprising.. But still a fact, so regardless of what ACL said back then, they changed position now

 

[oldskyblue58]

This ones for OSB, do you think that SISU bought CCFC to use as a vehicle to off set tax liabilities through its London office?

Think that is a secondary consideration Senior Vick ....... They cant use the losses until they crystallise (ie the investment sold or the club ceases to exist). They bought in on the potential to get hold of the site and the possibility of some success on the pitch (in that order) in my opinion

 

[Brighton Sky Blue]

Yep not massively surprising.. But still a fact, so regardless of what ACL said back then, they changed position now

I'm certain that the implications of rejecting the offer would've been made clear to the CCFC board-bear in mind also that the last talks were held after ACL issued their statutory order, which they didn't follow up.

 

[Brighton Sky Blue]

PWKH, I put it to you that ACL only care about CCFC fans because of lost revenues on match day and it would be breaking the contract you signed with Compass. It's funny you didn't give a feck about fans when you said you could survive without a football club 2 months ago. Stinks of bullshit to me.

I've heard that your administrators plans were to close the academy to save costs? So much for caring about the future of the future of the football club.

And I put it to you that SISU only care about CCFC fans because you can't run a football club with zero crowds. Moving the club to a groundshare at an unspecified location is a good way of achieving that.

 

[oldskyblue58]

Yep not massively surprising.. But still a fact, so regardless of what ACL said back then, they changed position now

If you go to court you have to be strong and clear as to what you want and expect as a starting position. So in reality their position hasnt changed much it is just how it has to be portrayed now its gone to court. To protect their legal position in a process they dont control they have to maximise their position. Judgement is different to settlement so that creates room for manoeuver thats all.

 

[lordsummerisle]

Mutton has his facts wrong. The money was put there from a third party grant.

ACL still have that money though, wherever it came from, ACL now have it as payment of rent arrears.

 

[Grendel]

ACL still have that money though, wherever it came from, ACL now have it as payment of rent arrears.

Correct so their generosity is in effect the balance of arrears already collected.

 

[Jack Griffin]

option is not with ACL Jack its with the Charity

OK, but I was looking at the other end of the option, I assumed that was with CCFC Ltd, or is it elsewhere?

 

[Brighton Sky Blue]

ACL still have that money though, wherever it came from, ACL now have it as payment of rent arrears.

It still means that the club has on obligation to top it back up given that it's a) A security deposit and b) was paid with money that wasn't theirs.

 

[lordsummerisle]

It still means that the club has on obligation to top it back up given that it's a) A security deposit and b) was paid with money that wasn't theirs.

It's also money that wasn't ACL's, which they now have.

 

[oldskyblue58]

OK, but I was looking at the other end of the option, I assumed that was with CCFC Ltd, or is it elsewhere?

Its held with CCFC Ltd

 

[Brighton Sky Blue]

It's also money that wasn't ACL's, which they now have.

It was put there as a safeguard for ACL in the event that a tenant defaulted-it's not the same.

 

[lordsummerisle]

It was put there as a safeguard for ACL in the event that a tenant defaulted-it's not the same.

They defaulted. ACL took the money. Served it's purpose.

 

[cashless]

Dear PWKH.
You are as much to blame as SISU, the Council and every other shitbag who has stuffed up this club. The bloody cheek of you coming on here as Mr nice guy is frankly galling. Piss off, have your day in court, get paid what you are "owed" and preside over the club being obliterated. Thanks.

 

[Brighton Sky Blue]

They defaulted. ACL took the money. Served it's purpose.

And it needs to be topped up again because we're contractually obliged to do so.

 

[luwalla]

I'm certain that the implications of rejecting the offer would've been made clear to the CCFC board-bear in mind also that the last talks were held after ACL issued their statutory order, which they didn't follow up.

you always seem "certain", and "sure".. and seem to surmise a lot of things... but truth is, neither you, me, or anyone on this board can confirm anything for 'Certain'.. you are purely guessing !

 

[Brighton Sky Blue]

you always seem "certain", and "sure".. and seem to surmise a lot of things... but truth is, neither you, me, or anyone on this board can confirm anything for 'Certain'.. you are purely guessing !

Perhaps it's me giving more credit to people than they're due-though if I as a mere scientist can derive what should happen then so should those at the top and with all the info to hand.