sky blues in court today (1 Viewer)
- Thread starter covkid69
- Start date
Never said the citizens had been rewarded.
Just pointing out that people are being missled by this story.
We do not paid rent to the council.
The rent is up to date (ok the escrow isn't).
The council did not receive any money from last years £1.2m rent.
The coventry taxpayers have to date not been effected by the escrow account payments.
The taxpayers recieved £21m from ACL Ltd.
The taxpayers recieved all the money from the sale of land to tesco even when the deal was done by the club.
The arena has already been mortgaged - by ACL (council/higgs).
Diehard Si
New Member
Being an accountant myself and following the events for years, I'm afraid i've just got sick to death of this now and can't bring myself to worry about it.
I'm just going to focus on the football and hope this just blows over. Got enough stress myself to have to worry about the my footy team too.
I'm just going to focus on the football and hope this just blows over. Got enough stress myself to have to worry about the my footy team too.
fernandopartridge
Well-Known Member
Didn't the club own the land that Tesco was built on?
I remember from the time, the planning application for the Ricoh was actually put forward by Tesco. The council's 'contribution' to the Ricoh was to sell the land to Tesco in return for Tesco putting forward the planning app (probably commissioning the architects and paying the other legal fees).
The planning app is on the Council's website still.
CCFC weren't represented at Birmingham High Court.
Invoices totalling £607,000 are owed to ACL
The judge ordered CCFC to repay monies owed "when they can" and also ordered CCFC to top up the reserve account immediately.
skyblueinBaku
Well-Known Member
Strange that CCFC were not represented in court. What are these invoices (£607K) for? They can't be rent, because that's been paid from escrow, and the invoices can be paid 'when CCFC can', as opposed to the money owed to the escrow account which must be paid immediately. I'm confused.
fernandopartridge
Well-Known Member
No, technically the invoices have not been paid.
The escrow account is there to provide security against non paid invoices.
It was my understanding that it was adjorned today, so where is this coming from?
The soothsayer
New Member
skyblueinBaku
Well-Known Member
If ACL has taken the rent from escrow (thus making a top up necessary) and we pay the invoices, they will have had the rent twice.
fernandopartridge
Well-Known Member
CCFC must fulfil both of the following obligations, one cannot be substituted with the other:
- Make monthly rental payments
- Keep a contigency amount in the escrow account
No, part of the contract between CCFC and ACL states that CCFC places a deposit as security, same as someone renting a house would have to.
The Penguin
Well-Known Member
Part of his job is PR with the supporters. I would imagine silence greeting this sort of news would not be viewed too favourably by his paymasters.
skyblueinBaku
Well-Known Member
I still don't get it. CCFC must top up the escrow to an agreed figure (£500K). The escrow does not hold £500K because ACL have been taking money out to cover the rent each month. So ACL have had their rent. Why do we need to pay it? By the way, I'm not arguing the case for Sisu, I really don't understand why ACL should get the rent twice - once from escrow and then again when the invoices are paid.
ericagradus
Member
That's because the escrow account is a rent depsoit deed i.e. security for the duration of the lease for the landlord. The money going into the escrow account is available for the Landlord when the tenant breaches the lease. So there is no double payment of rent. But the account should be kept at the minimum amount to protect the landlord against any future breaches of the lease including non payment of rent.
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ericagradus
Member
It is very common for a party not to be represented at court for a case of this nature.
the lawyer representing the club could make a judgement call on the likely outcome and attendance would have made no difference.
oldskyblue58
CCFC Finance Director
To bring the case SBD they have to issue a writ based on the debt which is £607K the court would require specific amounts and proof. Yes part of that has been paid but from the Escrow account. The escrow account is not there for CCFC to use, and can only be used by ACL if CCFC defaults on the rent. The Escrow account is a contractual requirement to be held at £500k. It isnt a prepayment of rent just sitting there to be drawn it is a security against CCFC defaulting on the rent and must be at £500K.
The money from the escrow account runs alongside the debt owed from the rent. Legally you have to see it as two seperate items though. If the value of security is reduced (in this case the escrow acc) then ACL has the right under the contract to require the security to be rebuilt or even added to ........... this is a pretty standard clause in rent and loan agreements ..... if the security is not rebuilt then CCFC is in default of the agreement.
What it is not is paying rent twice ............ if the escrow is rebuilt to £500k then the monies already taken will be fully applied against the rent invoices. The whole idea is to protect the landlord from default by a major tenant ..... and topping up the escrow will restore status quo of deposit £500k and rent 100k pm
The money from the escrow account runs alongside the debt owed from the rent. Legally you have to see it as two seperate items though. If the value of security is reduced (in this case the escrow acc) then ACL has the right under the contract to require the security to be rebuilt or even added to ........... this is a pretty standard clause in rent and loan agreements ..... if the security is not rebuilt then CCFC is in default of the agreement.
What it is not is paying rent twice ............ if the escrow is rebuilt to £500k then the monies already taken will be fully applied against the rent invoices. The whole idea is to protect the landlord from default by a major tenant ..... and topping up the escrow will restore status quo of deposit £500k and rent 100k pm
ericagradus
Member
And to clarify the rent deposit deed will include provisions for the rent deposit to be released to the club when certain events happen, such as, assignment of the lease (although likely any ingoing tenant would have to offer a rent deposit), the end of the term, or the club could show gross profits for three consecutive exceeding three times the rental payments.
skyblueinBaku
Well-Known Member
So, OSB, if CCFC top up the escrow account, ACL will then apply the money they took from escrow against the rent invoices? Until that happens, the rent remains unpaid? Why then, have CCFC been ordered to pay the invoices 'when they can'? The escrow gets topped up, ACL then apply the money taken from escrow to the rent invoices, and then CCFC have to (at some time in the future) pay the invoices. Those invoices would be paid twice.
oldskyblue58
CCFC Finance Director
without seeing the judgement i cant be sure SBD but the sum owed is £607k which is much more than the escrow account. It could be that the "pay when you can" relates to the £107k left and ongoing rental payments, but that the escrow needs to be £500k at all times. No judge would order the invoices paid twice and you can rest assured TF & SISU wont be paying twice for certain ..... they hate paying most stuff once let alone twice
skyblueinBaku
Well-Known Member
Now it makes sense, OSB. The last sentence is certainly true!
fernandopartridge
Well-Known Member
The club are 5 months in arrears. I'd imagine the judgement would be made against the rent owed rather than the requirement to top up the escrow account (once the club repays the rental debt ACL can reinstate the cash into the escrow themselves).
Wrenstreetcarpark
New Member
The sequence is: Club take out lease, £500,000 is put into rent deposit account. Club pay rent. Escrow/rent deposit account stays the same. Club don't pay rent, ACL take that much from escrow. ACL says "top up escrow". Club don't top up escrow and don't pay rent. ACL say again "top up escrow". This goes on until there is nothing left in the escrow. ACL go to Court. Court tells Club "top up escrow or else".
So now we have to see what the "or else" is.
Statutory demand? Bailiffs?
Will Wisher stick two fingers up to the Court as well?
Does he dare do anything else? Seppala would have his balls if he agreed to pay. The Court will have them if he doesn't. Rather than lose his balls he might just cut and run.
oldskyblue58
CCFC Finance Director
Kind of depends on what the judgement says really
The case may well have been in two parts.
Firstly to establish the debt of £607k - the importance of that is not just the amount outstanding but that the rent is a valid debt as set out in the contract............. and it seems it went unchallenged
Second part is to get performance of the contract which is payment of the rent and the rebuild of the security in the escrow account. - again this also establishes (uncontested) the validity of the contract.
As to the mechanics I dont suppose the judge is that bothered how but it would be more straight forward for CCFC to top up the escrow rather than ACL. Once CCFC are in default then ACL have a legal right to draw the money in the escrow account so why complicate it . But either way it doesnt matter how it is done so long as it is. Non payment would put CCFC in a pretty sticky situation after being instructed to by the courts.
oldskyblue58
CCFC Finance Director
http://www.bbc.co.uk/news/uk-england-coventry-warwickshire-19241982
so TF reckons that it will be sorted out by end of this week ?
and ACL lawyers do not think the money will be paid
,........ obviously there are good constructive talks going on because the two sides are so close together in the appraisal of the situation :facepalm:
so TF reckons that it will be sorted out by end of this week ?
and ACL lawyers do not think the money will be paid
,........ obviously there are good constructive talks going on because the two sides are so close together in the appraisal of the situation :facepalm:
Wrenstreetcarpark
New Member
Fisher is rather like the builder we once had "by the end of next week" rather like "free beer tomorrow". He will say whatever he thinks will sound reasonable. If he says he is in talks it means he isn't but knows he should be.
oldskyblue58
CCFC Finance Director
was somewhat surprised that the club wasn't represented in court. Seems a bit dismissive to me. It also points to their being nothing going on behind the scenes from CCFC in terms of the rent other than "we are not paying it". I wouldn't be hopeful of a deal being done by Friday or that the money will be paid
skyblueman
New Member
Agreed it is somewhat surprising they were not represented in court.. don't like that one little bit.... something else behind this
coundonskyblue
New Member
What happens now then if the club doesn't top up the deposit account?
Paxman II
Well-Known Member
Sounds simple to me.
The outstanding debt on invoice is proven at 607k. This relates to rent obligations of 500k that should be in escrow at all times and for this they have been ordered to bring it up to date.
A further 107k must be paid 'when they can' suggesting it is not past due as of yet.
CCFC will neded to pay the 500k back into that escrow account forthwith or risk the weight of the court a second time.
And time is the name of the game here for SISU.
Brinksmanship comes to mind. It's trashy but will work short term as they get their house organised, buy a team and get their season underway.
The outstanding debt on invoice is proven at 607k. This relates to rent obligations of 500k that should be in escrow at all times and for this they have been ordered to bring it up to date.
A further 107k must be paid 'when they can' suggesting it is not past due as of yet.
CCFC will neded to pay the 500k back into that escrow account forthwith or risk the weight of the court a second time.
And time is the name of the game here for SISU.
Brinksmanship comes to mind. It's trashy but will work short term as they get their house organised, buy a team and get their season underway.
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