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First Wizard

Administration!

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[quote user="IncH_HigH"]Here you go.

Wiz said "Err? don''t go toe to toe with me over military history 7rew, as a

retired military historian, it was a major disaster for the British

Army, Lord Raglan, and the light brigade, after going down the wrong

vally after the wrong guns, they failed to spike them when they did get

there. Nor, did they keep any ground they did cover.

Only the Heavy Brigade achieved that distinction in the Crimea war".

[/quote]Perhaps he was chief accountant the "Military Historian" magazine?

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I saw the title of the post and I thought "Excellent !  A Musical about Leicester City in the style of Oliver !".  Turns out its just old sad sack being melodramatic again.  And despite being a retired accountant, he hasn''t backed his assertions with any facts or figures from the most recent accounts - at least Mr. Spine Road and the other chief bores make the effort to explain why we''re knackered...

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[quote user="IncH_HigH"]I''m confused now Wiz, this week you are retired from accounts but last week you were a retired military historian?
[/quote]

That was unpaid, and a pleasure, the accounts lark paid my wages and I hated it!

PS. I''m not an accountant, I only worked in a Utilities accounts office..............okay?

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[quote user="Chunky Norwich"]

Does anyone know why different teams get different point deductions? Is it simply in relation to the amount of money wiped off by the administration?

I''m pretty sure Leeds started a season on -15 while Rotherham were -9, Bournemouth -10 and Luton a whopping -30

[/quote]

Wiki is your friend;

Luton were docked 10 points for the 2008-09 season - and then 20 points by the Football League for exiting administration without a Company Voluntary Arrangement.

 

 

Leeds entered a Company Voluntary Arrangement (administration) on 4 May 2007, thus incurring a league imposed 10 point deduction which officially relegated the club to the third tier of English football.[20][21]

The CVA was due to end on 3 July 2007 which would have allowed Bates to regain full control of the club. However HM Revenue & Customs challenged the CVA, a decision which could ultimately have resulted in the liquidation of the club.[22] Under league rules, if the club were still in administration at the start of the next season, Leeds would have been prevented from starting their campaign by the Football League.[23][24] Following the challenge by HMRC, the club was put up for sale by KPMG,[25] and once again Ken Bates'' bid was accepted.[26] The league eventually sanctioned this under the "exceptional circumstances rule" but imposed a 15 point deduction due to the club not following football league rules on clubs entering administration.

On 6 August, just three days before the start of the season, the Football League threatened to block Rotherham (as well as Bournemouth) from participating in League Two for the 2008-09 season, because the club had not yet exited administration or completed the process of transferring ownership. The Football League ruled that accepting the 17-point deduction would be a condition the team must obey to be eligible to play, which was accepted.[4]

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[quote user="1st Wizard"]

[quote user="IncH_HigH"]I''m confused now Wiz, this week you are retired from accounts but last week you were a retired military historian?[/quote]

That was unpaid, and a pleasure, the accounts lark paid my wages and I hated it!

PS. I''m not an accountant, I only worked in a Utilities accounts office..............okay?

[/quote]Ah indeed, so you''re ''retired from accounts'' in the same way that I am, in that I used to work in an accounts department and now do not... nice one.Title of thread: Administration!Meaning of thread: "Look at me, look at me! Won''t someone please look at me?!"

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[quote user="Evil Monkey"][quote user="1st Wizard"]

[quote user="IncH_HigH"]I''m confused now Wiz, this week you are retired from accounts but last week you were a retired military historian?
[/quote]

That was unpaid, and a pleasure, the accounts lark paid my wages and I hated it!

PS. I''m not an accountant, I only worked in a Utilities accounts office..............okay?

[/quote]
Ah indeed, so you''re ''retired from accounts'' in the same way that I am, in that I used to work in an accounts department and now do not... nice one.

Title of thread: Administration!
Meaning of thread: "Look at me, look at me! Won''t someone please look at me?!"
[/quote]

So what do you want me to do?...............lie?

Err? so why did you reply?  [:|]

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As a shareholder can I just say we are not anywhere near Administration and due to the structure of our finances, it is very unlikely that would happen.The debts are a combination of interest free loans by the Directors.  The rest of the debt is a 20-year securitisation deal with AXA, on low interest and fixed monthly payments.  The monthly payments are manageable and the arrangement is much like a mortgage.Clubs that go into Administration have short-term debts upon which the banks can make an immediate demand for repayment.  This is what happened to use in the 90''s when we were forced to sell Jon Newsome and Ashley Ward.The difference with our debt compared to say Luton Town is that ours is like a mortgage, where as theirs was like a whopping credit card bill.Bell wanted to move for family reasons, he''s hardly featured for us and we got more for him than we actually paid out.  100% of that money goes straight back into the transfer kitty.End of.

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[quote user="Delia S. Tickers"][quote user="Chunky Norwich"]

Does anyone know why different teams get different point deductions? Is it simply in relation to the amount of money wiped off by the administration?

I''m pretty sure Leeds started a season on -15 while Rotherham were -9, Bournemouth -10 and Luton a whopping -30

[/quote]

Wiki is your friend;

Luton were docked 10 points for the 2008-09 season - and then 20 points by the Football League for exiting administration without a Company Voluntary Arrangement.

 

 

Leeds entered a Company Voluntary Arrangement (administration) on 4 May 2007, thus incurring a league imposed 10 point deduction which officially relegated the club to the third tier of English football.[20][21]

The CVA was due to end on 3 July 2007 which would have allowed Bates to regain full control of the club. However HM Revenue & Customs challenged the CVA, a decision which could ultimately have resulted in the liquidation of the club.[22] Under league rules, if the club were still in administration at the start of the next season, Leeds would have been prevented from starting their campaign by the Football League.[23][24] Following the challenge by HMRC, the club was put up for sale by KPMG,[25] and once again Ken Bates'' bid was accepted.[26] The league eventually sanctioned this under the "exceptional circumstances rule" but imposed a 15 point deduction due to the club not following football league rules on clubs entering administration.

On 6 August, just three days before the start of the season, the Football League threatened to block Rotherham (as well as Bournemouth) from participating in League Two for the 2008-09 season, because the club had not yet exited administration or completed the process of transferring ownership. The Football League ruled that accepting the 17-point deduction would be a condition the team must obey to be eligible to play, which was accepted.[4]

[/quote]

The way this was explained to me is that it''s perfectly legal for a company to exit Adminstration without a Company Voluntary Arrangement, it''s just that such a practise is against Football League rules.

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A lie Waz? Is that the same as you do each day?

As your guessing, surely that''s the same as lying in my book. Just wheel off the edge of the cliff in that shathole you live in..........

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[quote user="Shifty Sid"]As a shareholder can I just say we are not anywhere near Administration and due to the structure of our finances, it is very unlikely that would happen.

The debts are a combination of interest free loans by the Directors.  The rest of the debt is a 20-year securitisation deal with AXA, on low interest and fixed monthly payments.  The monthly payments are manageable and the arrangement is much like a mortgage.

Clubs that go into Administration have short-term debts upon which the banks can make an immediate demand for repayment.  This is what happened to use in the 90''s when we were forced to sell Jon Newsome and Ashley Ward.

End of.
[/quote]

Sid, I hate to disagree, but low interest and monthly payments are only half the story. The loan will have clauses defining what an ''event of  default'' is. In secur(itis)ed loans, there are commonly clauses concerning the net assets position of the borrowing company, or other ''default'' clauses, whereby defaulting on any other loan in any way is considered an event of default. These are inserted to protect the lender from situations whereby it becomes clear that the risk of the borrower failing to pay the entire loan has gone up significantly from when the loan the was taken out, but the borrower is still keeping its head above water.

If an event of default clause is triggered, the loan is repayable in full on demand. That is what will take us under, if anything.

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[quote user="Shifty Sid"]As a shareholder can I just say we are not anywhere near Administration and due to the structure of our finances, it is very unlikely that would happen.

The debts are a combination of interest free loans by the Directors.  The rest of the debt is a 20-year securitisation deal with AXA, on low interest and fixed monthly payments.  The monthly payments are manageable and the arrangement is much like a mortgage.

Clubs that go into Administration have short-term debts upon which the banks can make an immediate demand for repayment.  This is what happened to use in the 90''s when we were forced to sell Jon Newsome and Ashley Ward.

The difference with our debt compared to say Luton Town is that ours is like a mortgage, where as theirs was like a whopping credit card bill.

Bell wanted to move for family reasons, he''s hardly featured for us and we got more for him than we actually paid out.  100% of that money goes straight back into the transfer kitty.

End of.
[/quote]

Shifty, I''m not sure where you got the fact that Administration is highly unlikely given the structure of our finances as it clearly isn''t.

A number of factors can come into play and you are right that it is short term demands on a company''s cash that come into play, however do not ignore:

1. Creditors repayment - eg staged transfer payments (we have some)

2. Tax bills - unfortunately if ignored taxes on capital gains (which we have) can come up and hit you

3. Loan repayments - one hit us in December I believe

4. Personal bankruptcy of those that have lent you money - more books Delia please.

 

Now no one wishes to be a doom monger (well maybe Wiz) but if you seriously think the Club has not got money problems then you are ignoring some obvious signs.

 

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I reckon we''re about 4 seasons of not gettimg promoted away from having to really downscale. Then we''re about 4 more from real financial doo doo if we stayed in the Championship and probably 2 if we went down a league at that point.In short, we stay in this league we''re 8 years away from adminIf we go down to league 1 this season, we''re about 2 awayif we get promoted, we''re ages away from it again

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Is this the reason of all the Loan players and temp Manager ? also is it worth renewing season tickets if there''s so much not happening.

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I hear what you''re saying - I am not implying we don''t have money problems; being £20Mn in debt we clearly do.  I am merely saying we are not on the verge of Administration as soom doom mongers on here would have everyone believe.Annual Turnover is what?  £8Mn?  The debt is about £20M.My annual salary is £30k.  My outstanding mortgage is £75k - does that mean I am about to go bankrupt?  No.The same applies with the club.

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[quote user="Shifty Sid"]As a shareholder can I just say we are not anywhere near Administration and due to the structure of our finances, it is very unlikely that would happen.

The debts are a combination of interest free loans by the Directors.  The rest of the debt is a 20-year securitisation deal with AXA, on low interest and fixed monthly payments.  The monthly payments are manageable and the arrangement is much like a mortgage.

Clubs that go into Administration have short-term debts upon which the banks can make an immediate demand for repayment.  This is what happened to use in the 90''s when we were forced to sell Jon Newsome and Ashley Ward.

The difference with our debt compared to say Luton Town is that ours is like a mortgage, where as theirs was like a whopping credit card bill.

Bell wanted to move for family reasons, he''s hardly featured for us and we got more for him than we actually paid out.  100% of that money goes straight back into the transfer kitty.

End of.
[/quote]

I was a shareholder too until last summer, and I don''t see how that means you know what the current financial situation is.  You''ve got last year''s accounts which go up to 31st May 2008 but that was nine months ago. 

We do have a short term debt, the £2.5m loan to purchase the LSE land which was due for repayment in full on 31st December 2008.  There''s been no news whatever regarding whether it''s been paid off, rolled over or what.  If we''ve had to pay it off it would be a surprise if we weren''t completely skint.

The long term loan (15 years not 20 btw) is not as straightforward as it seems, since it is secured against revenues including season ticket and other matchday income.  The interest rate is fixed as you say, at roughly 7.4%.  After five years paying interest only, we are now at the stage of paying interest + capital which will set us back approximately £2m this season and which is set to continue for another nine years.  The loan has first call on the club''s income (yes that means your ticket money) and a drop in income could leave us with very little left after debt obligations have been met.  We may not be about to go bust but we''re in a tight spot which looks set to get tighter.

100% of the money for Bell going straight back into the transfer kitty?  I suppose there''s a first time for everything . . . [:S]

 

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Once the rot starts in a company then as Bobzilla says above every bank loan will be subject to a whole range of financial covenants (rules), if you break any of them then the loan is immediately repayable.

These are usually both financial (are you earning enough to cover your repayments etc) and management (key staff leaving, shareholders leaving etc).   If the bank calls it is goodnight folks.

So no club is further than two years away and it is a cloud over them all.

It doesn''t help when rumours are going round Coventry that the Bell transfer was in part that we couldn''t afford the payment of his fee to Luton that we couldn''t afford.

 

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