Receivership!

Yellow Rider · February 23, 2009

[quote user="jbghost"]

There is no chance of us going into administration. We have no debt we cannot service comfortably. All debt apart from money rcently loaned by Delia is long term debt being paid back to financial institutions over several years. We could service the next 12 months paymnets comfortably by selling Marshall.

The only person who could cause a ripple or two in the boardrom is Delia herself if she suddenly decides she wants her short term loan money back.

[/quote]

I''d be careful with such blind optimism if I were you! If we can service our liabilities so ''comfortbaly'' then how come we are losing several thousands of £''s per week? It''s not just paying the intertest on those loans which, I agree, are not a major part of our day to day expenditure but rather it''s the perilous stateof our balance sheet overall with ''staff costs'' being the most significant factor. Sure we can keep paying the interest to RBS and AXA etc. but ONLY if savage cuts are made to staff costs and other overheads. If that does''nt happen then we WILL go into administration. Not necessarily tomorrow, next week or next month. You CAN''T keep spending more than you earn, surely we have all learned that by now with the Credit Crunch!

Camuldonum · February 23, 2009

[quote user="singing canary"]

i cant see them throwing in the towel when the club is still worth a few million .

a couple of wins would pull us away from that .

if anything they would just sell the club on the cheap .

why after a couple of games , when we have 12 games left thats 36 points to play for .

[/quote]

The top creditors get preference - in your case that would be the bank loans, one assumes, and other trading creditors. They take complete preference over all the shareholders. Company law requires the directors of any company even *fearing* administration to make the creditors their priority. Shareholders count for nothing in these circumstances - it is quite common for the creditors to get a share of whatever proceeds there are while the shareholders do not get a penny. The directors are required by law to do this and face civil penalties or even criminal prosecution (in extreme cases) if they do not. Mr Doncaster, being legally qualified, will be quite clear as to what the Company responsibilities are in this matter.

The first duty of any administrator is to prepare a report saying whether or not the directors have taken proper steps under Company Law to protect the creditors. He is required by law to prepare this report.

Personally I cannot imagine Delia and Co walking away from the club just to spite someone. Whatever her failings as a football director I do not believe for one moment that she would do such a thing.

Mr Doncaster tells us that you are up to date with your payments to HMRC which is more than many clubs are in your Division and elsewhere - a number owe millions and quite where this is coming from. It is somewhat ironic I think that you possibly have less money for players than other clubs who have ignored their tax payments and spent the money on the field.

I don''t have access to any Norwich City secrets but I don''t believe you are anywhere near Administration and even if you were unfortunate enough to be relegated I still don''t believe that it would result in that.

Southampton are in far more desperate straits, Watford aren''t too healthy and Charlton look as if they might have to visit League One - and their debt is around £40m. A consortium did make a formal offer but after examing the Charlton books they have not been seen since.

On another thread someone suggested that Mr Cullum had pulled out because he was not allowed to examine the Norwich City "books". The boring rules, as I understand, are quite clear. Once he has acquired 30 per cent of the current shares he has to convert that into a formal offer and he can then legally inspect the books and call in his own experts to do so. Until that stage is reached he cannot - otherwise companies would look at rival company accounts all the time which is clearly nonsense. The rule of put up or shut up as I call it. Try looking at the Towergate books without making an offer for his Company!

A company making a so called "hostile bid" (acquiring shares on the stealth to keep it simple) is NOT entitled to see the company books at any time. That''s why hostile bids are fairly rare - if there is anything nasty in the cupboards you won''t find out until you have bought it.[+o(]

If Mr Cullum had been serious about taking over Norwich City PLC he could have made a formal offer (however derisory) for the shares of Delia and Michael and it would then have become a matter of public debate in which the fans might or might not have played a part. He did not make any formal offer. He could have done so. You cannot acquire a controlling interest in a PLC company under the City Code without doing so and signing a formal agreement, and providing Guarantees, that you are able to repay any existing loan agreements that you have or any payments that become immediately repayable (not just a promise - the money actually has to change hands) - the Turners are in for a couple of million I believe - on a change of Ownership.

I have a Business Overdraft Agreement with the Nat West. If I were to sell the business the loan becomes immediately repayable - it would NOT be an agreement I could transfer to anyone else. The purchaser might take out exactly the same Agreement with exactly the same bank after he had purchased it but the Nat West would want the original money back first and then (or not) strike the same agreement on the same terms with a different name.

This isn''t John or Abdul at the corner shop in Costessey doing a private cash deal and you turning up on Monday morning wondering who John or Abdul is with "Under New Management" (hopefully printed by one of Smudger''s printers) on the window.

It is a PLC. If he had really wanted it he could have battled for it.

For whatever reason he chose not to do so but I would be quite surprised if he was taken aback by the Corporate Might of Delia, Michael and Neil Doncaster. And at least some members of your Board met him face to face but he will not disclose who.

It must be said that neither Mr C or Delia will be interviewed on this by a national newspaper where, I believe, they might have been the subject of more searching questions than currently directed at either locally. I believe he confined his "exclusive" (if not sensational) revelations to the EDP for a reason but that''s just me being cynical. He could have taken on Delia nationally if he had wanted to do so. We gave both the opportunity: both declined. Why we cannot say!

Personally, I am deeply suspicious of anyone (not aimed specifically at Cullum) conducting negotiations for a PLC through a newspaper. Hints can be dropped yes but not gloves thrown down.

Anyway, that''s just me. We''ve got a LONG list of questions we''d like to ask both but neither are in the mood, apparently. In fairness, both may be distracted.

That''s it I think. I have word limit 2750 to write about The Tsar''s Bride by the great Nikolay Andreyovich Rimsky-Korsakov (1844-1908) for the programme notes in Osnabruck in June of this year.

"We are most interested in the origins of Russian culture and if your notes can reflect the Russian influences in this score it would be particularly appropriate and most welcome."

Game on! Which, at the moment, does not appear to be the case between Towergate and Norwich City PLC.

Blue · February 24, 2009

I doubt you are on the verge of administration, although with the current credit ''crunch'' it is quite difficult to foresee what pressure the financial institutions are putting on the credit currently with NCFC. I suspect there is alot more pressure for the debt to be reduced or terms to be renegotiated, than there was a year ago, which has nothing to do with the situation of the club, but all to do with the banking industry right now. Another point to make is that administration is as much, if not more, to do with cash flow than losses - you have to have enough cash - i.e. in the overdraft facility - to meet any debts due. If you cannot service the debt and have enough cash to operate then you are trading insolvently which is illegal and you have to call in administrators. By the way, this is what happened with ITFC - nothing to do with pressure from local traders as mentioned previously. And should NCFC go into administration - which I''m sure Delia will try to prevent if at all possible (so I suspect it won''t happen), then for sure you will take local companies for money as all businesses operate on credit which for cash flow reasons is stretched to maximumise interest free credit at the best of times, and as everything gets frozen at the point of administration, then these suppliers will not get paid their monies due even in a normal credit period of something like 60-70 days from invoice.

The only reason I can see that Delia would take you into administration is if she cannot (or does not want to) inject more cash to allow trading to continue - if that is even necessary - or that there is a real possibility in the near future that there is no alternative (by which I mean hugely reduced funds through relgation which in turn could could result in the cash crisis or even an activation of break clauses in the financial agreements), in which case the last possible day before March deadline is better than after as otherwise you limit the chances of success in the next couple of seasons and the medium / long term potential.

No doubt all the scenarios are being played out right now - as I''m sure they are at many other clubs!

I hope you find this post a constructive view. Even being a ''scummer'' I don''t want to see you religated, in fact I''d like to see both clubs in the premiership - providing we are doing better than you of course!! - as the region needs it.

Beauseant · February 24, 2009

[quote user="Camuldonum"][quote user="singing canary"]