SECRET COUNCIL REPORT REVEALS ROBINSON TO BE A PERSONAL GUARANTOR FOR SKY BLUES' RENT ... AND HE COULD BE LIABLE FOR £¼m BILL " I wrote off £20million in the football club, so I would hope ACL would kindly overlook £250,000 now...
COVENTRY MP and former Sky Blues chairman Geoffrey Robinson could stand to lose £250,000 if the club does not pay its Ricoh stadium rent debts.
The Telegraph has learned city councillors were informed in private that ACL could call on Mr Robinson and one other person to pay £250,000 each.
They were told before a meeting in which they approved a £14million deal to buy out the mortgage of stadium company Arena Coventry Limited with Yorkshire Bank, Councillors were informed that the multi-millionaire MP had previously agreed to personally guarantee rent being paid from the football club to ACL.
The Labour party grandee previously wrote off £20million of his own money when he left the club to allow Sisu to take over in 2007.
But Mr Robinson said the possible £250,000 bill had nothing to do with his call for Ricoh owners Coventry City Council and the Alan Edward Higgs Charity to write off some of the debt, and give at least half the stadium back to the football club.
We first reported his criticisms in November, which he renewed after the council agreed the bail-out on Tuesday. The council paid £14million from its coffers to Yorkshire Bank on Tuesday, which will be replaced later with £14million of borrowing by the authority.
Mr Robinson said taxpayers were being forced to invest in an `unprofitable business separation' be tween the stadium and club.
A leaked council officers' report proposing the deal to councillors on Tuesday states: “No action has been taken yet by ACL to enforce these guarantees and the extent to which these could be realised to alleviate some of the arrears is uncertain.“ It adds: “The CCFC rent is currently criticial to ACL's viability. However, if ACL enforce payment of arrears and rent in full now, this is likely to result in the liquidation of CCFC.“
The deal means ACL will now pay back a restructured mortgage to the council in lower payments over a longer period at lower interest rates * alleviating ACL's dependency on rent from Sky Blues.
Sky Blues owner Sisu has refused to pay rent since last April. Both sides have said they are now willing to negotiate again, after an earlier ACL offer to cut rent to £400,000 a year.
But Coventry North West MP Mr Robinson said ACL's last returned accounts showed a £470,000 profit in 2010/11, when the £1.2million rent was paid.
He said ACL could potentially make a small profit after the council deal, but the loss-making football club would continue to struggle without the benefit of stadium revenues.
He said: “A council and a charity are not people to be running a stadium.
“They should get out of the way for a commercial operator to take over to develop its commercial activities and the land around it.
“I wrote off £20million in the football club, so I would hope ACL would kindly overlook £250,000 now.
“My lawyers told me I had severed all obligations.
“They want to concentrate on sorting ACL out. “They've not met any of their targets. They would be making a loss without the football club.
“Taxpayers are investing in an unviable business unless they can get the club back on its feet. Sisu made terrible mistakes too but they have written off £40million and have brought in new management. Without the club, ACL doesn't have a future.
There should be a new start.“
Jacky Isaac, interim chief executive of ACL, said: “It is our current understanding, based on legal advice, that Geoffrey Robinson is still liable for his personal guarantee on the rent.
“The ACL Board has not yet decided whether it will call in this personal guarantee, although it is important to make clear that the board is required to act in a way that is in the best interests of the company.''
COVENTRY MP and former Sky Blues chairman Geoffrey Robinson could stand to lose £250,000 if the club does not pay its Ricoh stadium rent debts.
The Telegraph has learned city councillors were informed in private that ACL could call on Mr Robinson and one other person to pay £250,000 each.
They were told before a meeting in which they approved a £14million deal to buy out the mortgage of stadium company Arena Coventry Limited with Yorkshire Bank, Councillors were informed that the multi-millionaire MP had previously agreed to personally guarantee rent being paid from the football club to ACL.
The Labour party grandee previously wrote off £20million of his own money when he left the club to allow Sisu to take over in 2007.
But Mr Robinson said the possible £250,000 bill had nothing to do with his call for Ricoh owners Coventry City Council and the Alan Edward Higgs Charity to write off some of the debt, and give at least half the stadium back to the football club.
We first reported his criticisms in November, which he renewed after the council agreed the bail-out on Tuesday. The council paid £14million from its coffers to Yorkshire Bank on Tuesday, which will be replaced later with £14million of borrowing by the authority.
Mr Robinson said taxpayers were being forced to invest in an `unprofitable business separation' be tween the stadium and club.
A leaked council officers' report proposing the deal to councillors on Tuesday states: “No action has been taken yet by ACL to enforce these guarantees and the extent to which these could be realised to alleviate some of the arrears is uncertain.“ It adds: “The CCFC rent is currently criticial to ACL's viability. However, if ACL enforce payment of arrears and rent in full now, this is likely to result in the liquidation of CCFC.“
The deal means ACL will now pay back a restructured mortgage to the council in lower payments over a longer period at lower interest rates * alleviating ACL's dependency on rent from Sky Blues.
Sky Blues owner Sisu has refused to pay rent since last April. Both sides have said they are now willing to negotiate again, after an earlier ACL offer to cut rent to £400,000 a year.
But Coventry North West MP Mr Robinson said ACL's last returned accounts showed a £470,000 profit in 2010/11, when the £1.2million rent was paid.
He said ACL could potentially make a small profit after the council deal, but the loss-making football club would continue to struggle without the benefit of stadium revenues.
He said: “A council and a charity are not people to be running a stadium.
“They should get out of the way for a commercial operator to take over to develop its commercial activities and the land around it.
“I wrote off £20million in the football club, so I would hope ACL would kindly overlook £250,000 now.
“My lawyers told me I had severed all obligations.
“They want to concentrate on sorting ACL out. “They've not met any of their targets. They would be making a loss without the football club.
“Taxpayers are investing in an unviable business unless they can get the club back on its feet. Sisu made terrible mistakes too but they have written off £40million and have brought in new management. Without the club, ACL doesn't have a future.
There should be a new start.“
Jacky Isaac, interim chief executive of ACL, said: “It is our current understanding, based on legal advice, that Geoffrey Robinson is still liable for his personal guarantee on the rent.
“The ACL Board has not yet decided whether it will call in this personal guarantee, although it is important to make clear that the board is required to act in a way that is in the best interests of the company.''
:guitar2: