italiahorse
Well-Known Member
Although they effectively put zero in, the asset they have is probably worth £50M.
That's the value they are protecting.
As the judge said its the value of the asset not the amount put in or how they got there.
I think also the point of how much money was invested in ACL comes into it. If the council had 50 million of tax payers money tied up in ACL then it would be different, as they had put £0 into ACL.
And yes if they knew Wasps were buying when they took that step it gives them a bit more security. Surely that would mean they were selling to Wasps while we were still tenants, before Northampton etc. Would be a major contradiction to a lot of things said and justifications given. Especially as it is around the same time of the £2million charity offer for Higgs share, which was classed as disgusting. It would certainly explain why it was never going to happen with SISU or CCFC if it had already been agreed with Wasps. (and maybe why SISU suddenly got interested in the stadium after a couple of years of being here).
That situation would make CCC and Wasps look quite bad.
Would they make a risky loan to that business in order to keep it afloat.
[h=2]But accounts show company made overall loss of £8.5m during time at Sixfields, compared to £7.1m the previous year and still owes £9.3million to parent company owned by Sisu[/h]
Otium’s accounts also show that debt to the owners now sits at £9.3million - but there is a note in the accounts which states the owners intended to continue to support the company and would not call in the debt for at least 12 months.
Although they effectively put zero in, the asset they have is probably worth £50M.
That's the value they are protecting.
As the judge said its the value of the asset not the amount put in or how they got there.
I think also the point of how much money was invested in ACL comes into it. If the council had 50 million of tax payers money tied up in ACL then it would be different, as they had put £0 into ACL.
Justice Tomlinson asks what investment the council had in ACL.
Council QC says he thinks that, other than development of the land to build the Ricoh Arena, there was no other investment in ACL prior to the loan.
Justice Tomlinson says: “At the moment it seems the council didn’t pay anything for their shareholding in ACL.”
Council QC says that’s irrelevant as once they have the shareholding it is of value. He adds giving away the shares would have been an “uncommercial and philanthropic act”.
Sisu QC intervenes to say that the shares would have represented a 50 per cent holding of a “negative equity” if they had been given away.
Council QC adds he will check if the council paid anything more for their ACL shares.
If they make that arguement they totally play into SISU's hands for JR2.
It was the judge who asked how much CCC had invested into ACL so he must think it relevant. If you've invested zero does making a risky loan of £14m make sense?
They still own the freehold although Wasps have the lease.
Sisu stated at one stage they were after the freehold.
So if I inherit a house worth £200K from my Mum and then seek a loan for £15K to build a conservatory it's a risky loan ?
Don't think so
Except that wasn't the situation. It would be like inheriting a house worth £200K and then getting a loan for £500K. On top of that when the bank who are thinking of loaning you the money look at your finances you're already struggling to meet your current commitments.
It's nothing like either of those analogies
What would it be like?
It's nothing like either of those analogies
Grendel yesterday said that Wasps got the Ricoh for 10% of its value. Anyone want to agree with him as it is going against what is being said now.
What would it be like?
Except that wasn't the situation. It would be like inheriting a house worth £200K and then getting a loan for £500K. On top of that when the bank who are thinking of loaning you the money look at your finances you're already struggling to meet your current commitments.
As NW said, it would be difficult to find an analogy that fits this situation, but neither of those 2 are anything close are they?
It comes down to this the application of the 'market investor test', which looks at whether a private investor would have acted in the same way
The defence say you can't just apply that because Councils have other responsibilities. However I get the feeling these judges will still take that as the overriding factor in their decision.
Would a private firm try and stop their tenant devaluing a business they have an interest in. When they same tenant is trying to buy that business.
Would they make a risky loan to that business in order to keep it afloat.
Then sell it off to someone else before it gets anymore devalued?
Or would a private firm just try and sell it to the company causing it's value to drop. Without having to do any loan deal.
Or would a private firm do a deal with the company devaluing their business to try and drive a deal out of the bank. Which means working with this company when the relationship isn't great
Very tough really. I am thinking 60-40 in SISU's favour.
The first hearing s lot if people actions and Behavioyr came into it. It seemed to be based more in common sense. I was 70-30 thinking the council would win for the reasons the judge explained.
However this is more technical it seems to be cutting out all the surrounding curcumstances. It just looks at was that loan state aid yes or no. Without looking at all the surrounding curcumstances it looks more like it is.
In a strange way if the council did know Wasos were going to bud when they took this step. That would be better for them. A private company may do that. If they saw SUSU as hostile and knew by making the loan they could negate their influence them pave the way for a smoother sake to Wasps whilst having minimal risk in the loan because it actually would only be temporary.
I imagine a private company may have taken that option.
A private company might well make such efforts, unfortunately that is not the question being asked. The question being asked is what terms would be offered on the open market... and clearly if you don't already have a vested interest in the company then nobody else would offer the terms that CCC did to ACL.
Whether or not SISU manufactured this situation is not really relevant here - I think nobody disagrees that SISU were trying to distress ACL - the question here is simply about state aid. To me it now seems pretty clear cut that it was state aid.
I am sure the Telegraph will still spin the story that it was all Sisu's fault...
I think the logic is, that it is irrelevant what you got it for, but it's the value now that is important.
At the risk of throwing an analogy into the mix, but given you used a flawed one too I'll add itif you bought your old nan's house for £20k when she went into a home and its value was £250k, then if anyone brought this to the attention of the relevant authorities you'd have to pay the difference.
Therefore, having had it brought to the attention of the relevant authorities, we wait and see...
The Ricoh is like watching Bill and Ted's Excellent Adventure whilst eating a pizza covered in anchovies.
Isn't there are few contradictions in it? If it is worth loads, Wasps didn't pay enough (and for the massive extension), if it isn't worth anything, the loan wasn't viable?
Exactly.
The same people that say that the loan wasn't viable have said in the past that Wasps got it cheaply. I am all for people to share their views. But not when they decipher what has happened depending upon what point they want to make.
Yes, but the council are using both aren't they to suit?
Grendel yesterday said that Wasps got the Ricoh for 10% of its value. Anyone want to agree with him as it is going against what is being said now.
The loan was reduced from £1.6M to £800K per annum for ACL. More than enough to cover the deficit on accounts.
Next you'll be saying the banks are in it for the customers.
Er no the valuation is based on no club being there. So without a club the arena was not worth as much as the loan.
That is my point. The council were prepared to sell the asset to wasps on that basis but not the football club.
This issue of did the shares cost anything.
The ACL accounts for 31 May 2003 indicate that the Council subscribed 6 times between October 2002 and May 2003 for its 2,000,000 shares totalling £1,758,256 at nominal value . The cashflow shows this money was used to pay expenses for that year. CCFC had at that time 200 shares fully paid for at the nominal value via Football Investors ltd
The following year Football Investors Limited bought shares in ACL on 23 December 2003. to match the council totals. On 19th December 2003 CCFC had disposed of its interest in Football investors to Alan Edward Higgs Charity
That left ACL with an issued share capital of £3,516,112 split equally between Council & Charity. It seems that the shares were indeed purchased for cash
In which case the Council made the following gain on the shares
Disposal 2.77m
cost 1.76m
capital gain 1.01m
What is being pointed to I think by the lawyers is that in the Coventry North Regeneration Ltd Accounts the Council have said that for accounts purposes they will show a value of nil............. that is not the same as its sale value or indeed its purchase value
I was trying to find an answer to a question - the answer to which clearly lies in here - somewhere.
Are you saying Higgs share purchase from the club was £2.7 million?
You know that isn't true. They loaned our club money and put a total of 6m in. The lease was put up as collateral.
I was trying to find an answer to a question - the answer to which clearly lies in here - somewhere.
Are you saying Higgs share purchase from the club was £2.7 million?
2003 Accounts for CCFC Group show a net investment of £6,808,425 in the Arena Project which was then sold to the AEH Charity for £6,500,000. The balance of £308,425 was written off Companies House
CCFC Group Accounts 2003 & 200419[SUP]th[/SUP] December Alan Edward Higgs Charity acquires 50% of ACL from CCFC ltd. Shares owned by Football Investors Limited, which becomes a wholly owned subsidiary of the Charity. Cost to Charity £6,523,184 inc. fees. Payment made £2m cash £2.5m waiver of loan and £2m to two directors who had outstanding loans to FIL who then re loaned the money to CCFC ltd. CCFC Ltd acquires option to purchase shares back from the Charity. CCFC H accounts, Judicial Review docs 19[SUP]th[/SUP] December Development agreement between ACL and CCFC signed
The worm has turned again I see.
I was trying to find an answer to a question - the answer to which clearly lies in here - somewhere.
Are you saying Higgs share purchase from the club was £2.7 million?
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