Administration

[morty 0]

[quote user="MoCamara"]I am not simply ''making up'' a source, I am merely sharing information to you, as I thought you would be interested. I don''t know what will happen, and the future is not concrete. Why would I make it up?[/quote]For attention.Now move along.

[Felixfan 53]

Going into administration will only have the same result as selling the ground because the administrators will realise the club assets to pay the creditors. Better therefore to sell it on our own terms and secure the medium term future.

The annual accounts show that the auditors only consider the club a going concern because loan repayments and interest have been suspended until 31 May 2010.(presumably because our future will be known by then) Even then the arrears will have to be paid unless other restructuring can be negotiated.

[nutty nigel 7,536]

Surely not Felixfan. Surely administration is just like the reset button on a computer game. Tear it up and start again, wipe your debts, and choose when it''s best to take a ten point penalty.

 

[Excited Canary 19]

Nutty look on PUP''s thread.

[Felixfan 53]

Don''tadministrators have a duty to satisfy creditors from realisable assets. We are not like Ipswich or Southampton who had no assets.

Best then to make a pre-emptive sale on our own terms rather than a forced one. Maybe a leaseback arrangement with the major creditor + cash up to the market value of the ground.

[CambridgeCanary 0]

[quote user="canary cherub "][quote user="sgncfc"]

I know it is unpalatable but selling the ground and leasing it back is the obvious solution and I have no doubt that is what a sensible business would do - especially if we can build in a "buy back" option at a guaranteed return, so that if we do manage to get to the Prem and stay there, we can get it back again. Not owning the ground is not really a problem as long as the lease is held by a "friendly" - the problem would come if the lease is moved on to a "not so friendly". But this is the way the vast majority of businesses operate - most don''t own their premises; do have bank overdraft facilities etc. The difference is that we would then HAVE to make an annual profit, and that may well impact on the way the football team itself is managed.

[/quote]

But football isn''t an ordinary business whose aim is the maximisation of profit.  A football club aims to maximise success on the field of play and break even.  If it can make a profit as well, it''s all to the good provided it is reinvested in maximising success.

Selling the ground and leasing it back isn''t a sensible way of clearing our debts as it simply replaces debt repayments with spiralling leasing costs.  Buying it back, if that were ever possible (which I doubt) could only be done at the expense of investment in footballing success, and before we knew it we''d be back to square one. 

We''re between a rock and a hard place.  Administration is a horrible alternative, but if it''s a choice between short term acute pain (administration) and a long term dull ache (selling the ground) I know which I''d choose.  Timing is important of course, as is promotion (or not) to the Championship, but according to Mr Bowkett no decision needs to be made yet as the lenders are willing to hold off until the end of the season. 

And there''s a Factor X associated with admin: if there''s a potential investor out there, they will be well aware of our current financial plight - so why would they buy the club now instead of waiting to see how things pan out?  They could get the club for a song if administration was on the cards, and be able to invest more in the football side. 

And don''t worry about the poor shareholders.  I don''t see why we should bail out the very people who have presided over this mess at the expense of losing Carrow Road.  That, in my opinion, is what the proposal to sell the ground is really designed to do. 

 

[/quote]

Sorry but whilst not having a go at you personally, you post sums up the misconceptions at the heart of this post.

As a solicitor dealing with corporate issuesI have dealt with a number of companies in or facing administration.   It is hell for the business and there is everything to lose.

It is not a case of sell the ground or go into administration.  You might just as easily and ridiculously say "Shall I go bankrupt or sell my house?".

If you are bankrupt you lose your house.  If we go into administration then we lose the ownership of the ground.  Also, secured creditors are not affected by an administration and can rely on their security.

Also, an administration simply will not work as you and many posters assume.   Almost all the club''s debts are secured and would not be written off.

In an administration, the administrator realises all the assets of the business and divides them pro rata amongst the creditors.   The secured creditors can opt out and simply rely on the security that they hold.  So those bnaks which have the securitised loans against the ground and the gate receipts can decide not to play in the administration.  The only debts affected by administration would be the printers, burger suppliers and other minor trading debts.

The only realistic option of preserving the club in that extreme situation is a ground sale.

But there are other options before we get there.

A bond issue would be worth considering and though the timinig is bad, further share issues could be a way of reaisng capital.

Administration is not going to happen simply because any kind of half sensible board would sell the ground first.  If things are so bad then I know what advice I and any competent advisor would give and the result will be  that the ground will go.  End of story

[CambridgeCanary 0]

[quote user="nutty nigel"]

Surely not Felixfan. Surely administration is just like the reset button on a computer game. Tear it up and start again, wipe your debts, and choose when it''s best to take a ten point penalty.

 

[/quote]

You are far too knowledgeable and intelligent to really think that so I suppose that is sarcasm at the "take the ten point hit and everything will be rosy again" brigade.

Please confirm my faith in human nature and say I am right.

[nutty nigel 7,536]

[quote user="CambridgeCanary"][quote user="nutty nigel"]

Surely not Felixfan. Surely administration is just like the reset button on a computer game. Tear it up and start again, wipe your debts, and choose when it''s best to take a ten point penalty.

 

[/quote]

You are far too knowledgeable and intelligent to really think that so I suppose that is sarcasm at the "take the ten point hit and everything will be rosy again" brigade.

Please confirm my faith in human nature and say I am right.

[/quote]

I don''t recognise myself in your post but you so know I was. It''s amazing how many people think that way though. But then it''s not when you realise administration is reported that way on the sports pages. Try starting a thread asking "If we get 10 points clear of 3rd shoud we go into administration?"

 

[BlyBlyBabes 0]

[quote user="Shyster"][quote user="MoCamara"]I have been well informed by a source very close to the club that if the club are well within the play offs, but not looking like getting automatic promotion, we will have to go into administration. We can''t afford not to seems to be the line coming from him as the financials of the club truly are terrible.[/quote]


I''m trying to remain polite today, but it''s getting extremely difficult to remain so in light of some the many crass posts being made on this subject.

Any additional revenue from getting promoted will be eaten up by the additional costs of operating in a higher league, so the Club’s annual operating loss will be unaffected by any potential promotion to the Championship.

Regardless of what Division we''re in, Capital will have to be injected by Summer to avoid administration, and the Board will sell the ground to provide said Capital rather than go into administration.

So please get use to the notion that we will no longer own Carrow Road.
[/quote]

Who will they sell it to? And on what terms?

OTBC

[canary cherub 1]

[quote user="CambridgeCanary"]

Sorry but whilst not having a go at you personally, you post sums up the misconceptions at the heart of this post.

As a solicitor dealing with corporate issuesI have dealt with a number of companies in or facing administration.   It is hell for the business and there is everything to lose.

It is not a case of sell the ground or go into administration.  You might just as easily and ridiculously say "Shall I go bankrupt or sell my house?".

If you are bankrupt you lose your house.  If we go into administration then we lose the ownership of the ground.  Also, secured creditors are not affected by an administration and can rely on their security.

Also, an administration simply will not work as you and many posters assume.   Almost all the club''s debts are secured and would not be written off.

In an administration, the administrator realises all the assets of the business and divides them pro rata amongst the creditors.   The secured creditors can opt out and simply rely on the security that they hold.  So those bnaks which have the securitised loans against the ground and the gate receipts can decide not to play in the administration.  The only debts affected by administration would be the printers, burger suppliers and other minor trading debts.

A bond issue would be worth considering and though the timinig is bad, further share issues could be a way of reaisng capital.

[/quote]

You''ve dealt with companies facing administration, but have you ever dealt with a football club?  There are many ways in which a football club doesn''t work like an ordinary business.  When a business goes bust it''s often because it wouldn''t be profitable enough, even if its debts were cleared, to attract a buyer.  That doesn''t apply to most football clubs.  Buyers are attracted for reasons other than the prospect of financial gain, and buying a club for a nominal sum in return for clearing or reducing the debt is a far more likely outcome than with an ordinary business.

I don''t mean to present administration as anything other than a horrible option - let''s hope we can avoid administration and a ground sale - but it''s better than losing control of the ground and being saddled with spiralling rental costs for evermore.  The only people who stand to gain are the shareholders.  Enough said.

 

[CambridgeCanary 0]

[quote user="canary cherub "]

[quote user="CambridgeCanary"]

Sorry but whilst not having a go at you personally, you post sums up the misconceptions at the heart of this post.

As a solicitor dealing with corporate issuesI have dealt with a number of companies in or facing administration.   It is hell for the business and there is everything to lose.

It is not a case of sell the ground or go into administration.  You might just as easily and ridiculously say "Shall I go bankrupt or sell my house?".

If you are bankrupt you lose your house.  If we go into administration then we lose the ownership of the ground.  Also, secured creditors are not affected by an administration and can rely on their security.

Also, an administration simply will not work as you and many posters assume.   Almost all the club''s debts are secured and would not be written off.

In an administration, the administrator realises all the assets of the business and divides them pro rata amongst the creditors.   The secured creditors can opt out and simply rely on the security that they hold.  So those bnaks which have the securitised loans against the ground and the gate receipts can decide not to play in the administration.  The only debts affected by administration would be the printers, burger suppliers and other minor trading debts.

A bond issue would be worth considering and though the timinig is bad, further share issues could be a way of reaisng capital.

[/quote]

You''ve dealt with companies facing administration, but have you ever dealt with a football club?  There are many ways in which a football club doesn''t work like an ordinary business.  When a business goes bust it''s often because it wouldn''t be profitable enough, even if its debts were cleared, to attract a buyer.  That doesn''t apply to most football clubs.  Buyers are attracted for reasons other than the prospect of financial gain, and buying a club for a nominal sum in return for clearing or reducing the debt is a far more likely outcome than with an ordinary business.

I don''t mean to present administration as anything other than a horrible option - let''s hope we can avoid administration and a ground sale - but it''s better than losing control of the ground and being saddled with spiralling rental costs for evermore.  The only people who stand to gain are the shareholders.  Enough said.

 

[/quote]

Sorry but I cannot imagine a scenario where we would go into administration and keep ownership of the ground.  That is total fantasy.

Buyers buy clubs for all sorts of reasons of course.   However, the present owners would be mad to allow the Club into administration if they could save it by selling the ground.  Whatever else they are, they are not mad.

[TheGoogler 324]

Thank god for Myth-Buster Cambridge Canary bringing a dose of realism to this thread. Administration has far, far reaching consequences. Ipswich, for example, were in such debt with lenders so reluctant to finance further borrowing that it left them ripe for the picking by Marcus Evans - a character I am sure the likes of which Norwich fans would unite against owning our club. It is not (as Nutty Nigel gives the great example of) a reset switch which lets you wipe everything out and start over. You do not choose to go into administration. You go into it because there is no other option.

[Beauseant 0]

[quote user="TheGoogler"]Thank god for Myth-Buster Cambridge Canary bringing a dose of realism to this thread. Administration has far, far reaching consequences. Ipswich, for example, were in such debt with lenders so reluctant to finance further borrowing that it left them ripe for the picking by Marcus Evans - a character I am sure the likes of which Norwich fans would unite against owning our club. It is not (as Nutty Nigel gives the great example of) a reset switch which lets you wipe everything out and start over. You do not choose to go into administration. You go into it because there is no other option.




[/quote]

 

I couldn''t agree more. Administration has become something of a panacea on this forum, aided by the constant repetition of urban myths.

As CC points out, administration would result in a fire sale of the ground from which the secured creditors would be the beneficiaries. I don''t like the idea of selling the ground but it''s infinitely preferable to administration.

[canary cherub 1]

[quote user="Beauseant"]

[quote user="TheGoogler"]Thank god for Myth-Buster Cambridge Canary bringing a dose of realism to this thread. Administration has far, far reaching consequences. Ipswich, for example, were in such debt with lenders so reluctant to finance further borrowing that it left them ripe for the picking by Marcus Evans - a character I am sure the likes of which Norwich fans would unite against owning our club. It is not (as Nutty Nigel gives the great example of) a reset switch which lets you wipe everything out and start over. You do not choose to go into administration. You go into it because there is no other option.




[/quote]

 

I couldn''t agree more. Administration has become something of a panacea on this forum, aided by the constant repetition of urban myths.

As CC points out, administration would result in a fire sale of the ground from which the secured creditors would be the beneficiaries. I don''t like the idea of selling the ground but it''s infinitely preferable to administration.

[/quote]

Administration is anything but a panacea.  We''re in such a mess that there are no good outcomes.

But advocates of selling the ground are being extremely short sighted, and wildly over optimistic as to the possible benefits.  The assumption seems to be that because it has an asset value of £34.5m that''s what we would get if we sold it.  I don''t think so.  It''s worth whatever someone is willing to pay, and given our dire financial situation we are in no position to dictate terms. 

Even if we got enough to clear the debt, we''d simply be swapping loan repayments for spiralling leasing costs.  Get into a financial mess again, default on the rental payments and we all know what would happen then.  Eviction, leaving the owners free to sell the ground for development, which is probably what they would like to do anyway - you can be pretty sure that the new owners would only be interested in the bottom line, not the welfare of the football club.

It simply is not the case that football clubs going into administration automatically lose ownership of the ground.  There may not be buyers "queueing up to donate their savings" as Doncaster used to put it, but wait until admin is the only option left and watch them appear.  Selling the ground would not only bail out the very people who got us into this mess, but discourage serious new investment for evermore. 

The owners of this club have being pulling the wool over our eyes for years and now they''re trying to do it again.  Thick peasants, that''s what they think we are.  Please don''t fall for it folks. 

 

[. 0]

[quote user="chicken"][quote user="Cluck the Purist...."]

[quote user="chicken"]Now, some people may hate me for this but . . . . . .

There is a lot of discussion going on about the clubs debts and the possibility of Carrow Road being sold etc. Now I am not an accountant but is there another option?

Administration? I only ask because Leeds were much more in debt than we are and Ken Bates managed a nice little trick of getting rid of the debts whilst in administration. Could Delia and Mike and possibly Foulger do something similar.

I know we take a ten point hit but there are two ways to look at it - in a couple of games time we may be able to take a ten point hit and still be in 2nd or there abouts. Alternatively wait until the summer or when we are mathmatecally promoted and take a hit for next season. It may sound stupid but we will need to rebuild the team a bit in the Championship anyway and if we could use that season to wipe some of the debts out and get the team going it may do us some good.

I realise that some players are getting on and will want a shot at the premiership so maybe that would also be a factor but is it an actual viable option?
[/quote]

Don''t you just hate pretentious individuals who feel using first name terms gives them some form of gravitas?

Deary deary me.........

[/quote]

Don''t you just hate:
- trolls
- people who slag off Delia and blame her for the clubs missfortune although she is only half of the joint majority shareholding partnership
- people who make sweeping unfounded statments and then try to attack other people''s posts with insults

But from now on I shall make sure that I post Mrs. Smith and Mr. Wyn-Jones - just like you do in all of your posts.
[/quote]

Oh come on... You must admit you''re pretty boring Chicken..... and resorting to "first name" terms does make you look rather desperate to be important.

I''ll go easy on you from now on if you''re so ultra sensitive to honest observations......

 

 

 

 

 

 

 

 

Boohoo.....