Derby County

[chinapig]

1 hour ago, Derby_Ram said:

Finally some movement and more hope of a club next season although frustrating that any progress took until this late in the date. I'm angry that it's taken DCC seemingly coming up with a solution to get Kirchner back to the table as to me that can only mean MM not taking a hit + HMRC/taxpayers being shafted.

Maybe it's a fan-view, and a non football council tax payer would look at it differently, but I believe long-term the council would be better off dipping into coffers now and having the benefit of the club and what that brings to the local economy but that'll only be able to be truly understood years down the line if it happens. Totally understand someone with a wholly opposite view though.

I'm nowhere convinced Kirchner will end up our owner and he's not someone I'd choose based on character; but the EFL seemed not to have an issue when he completed the F+PP test last year according to local radio. Let's see.

I think it'll fall down if a condition of his bid is on -15 this season however more encouraging is a further few twitter conversations today on the post Mr P posted from Kieran Maguire last night. Kieran has seemingly confirmed -15 wouldn't be applied next year if 25p/£ isn't met as we' then have 3 years to pay 35%. Murky, not convinced its fair, but I'll take it although come 25/26 season when we start on -15 I may change my tune.

Finally looking forward to - shock horror - talking some actual football with you ahead of next week.

I don't do Twitter but on today's Price of Football pod today he was clear that 15 points would be deducted if creditors did not get at least 25p in the £. Possibly recorded before what he said on Twitter?

Interestingly, he also said Ashley may still be hovering but is being blocked because Morris doesn't like him. It comes as no surprise to me if Morris is still pulling the strings.

[Silvio Dante]

4 minutes ago, Bristol Rob said:

Given that property prices have exploded in the last couple of years, and Mel had PP 'independently' valued at 80mil (or whatever it was), wouldn't HMRC be all over a sale at a figure far below that from a CGT* perspective?

*Or whatever the tax is on commercial properties.

Nope, because of how Commercial Property is valued the property price increase won’t have applied…and in actuality, it is totally plausible for it to have reduced.

Commercial Property tends to have two values - Vacant Possession Value (VPV) - exactly what it says on the tin, nobody in occupation - and a Yield Based Valuation (YBV). Pride Park, although having a relatively unique sector, will have a YBV the same as your local Tescos.

The YBV is a function of the rent, the lease term and the tenant quality (and how “good” the property is both in building and location quality but that more underpins VPV). So, if the same property is let to Tesco at £10k or John Smith at £20k, the value may be higher for Tesco even if the rents lower based on the surety of income.

Translating this to PP, since that £80m valuation the tenant quality (surety of income) has markedly reduced, meaning even if lease terms etc were unchanged, absent market yield moves (won’t really have happened for Stadia), then the value of the asset has gone down as it’s only income stream is less secure, so the yield increases and value goes down.

Generally, commercial valuations are harder to argue (unless outlandish) as they’re subjective. Will be even more difficult with PP as there won’t be local comparable assets.

Sorry, boring answer from someone who’s worked in commercial finance!

[Mr Popodopolous]

27 minutes ago, chinapig said:

We'll have to see how it pans out but Quantuma's first duty is supposed to be to the creditors.

We could end up with a situation where the taxpayer gets shafted and the local council tax payer pays for the stadium. 

All in effect to benefit Mel Morris OBE, erstwhile hero to Derby fans, a business ambassador who screwed local businesses.

To them that hath it shall be given etc.

Agreed for the most part although there are a range of ways to make such a transaction profitable to Derby City Council or whoever buys it, albeit these gains would be medium to long term.

A bigger issue is of course a) HMRC and b) Unsecured creditors- a lot of whom will be Derby fans and reasonably local I expect, think the amount Derby would like lopped off point a is 75%.

As an aside, did we know that Mel Morris may well have donated to the Tories in 2017? Or at least to Patrick McLoughlin. That said the size or regularity of donation isn't exactly one that would be associated with influence, not large enough or regular enough IMO.

[Derby_Ram]

21 minutes ago, chinapig said:

I don't do Twitter but on today's Price of Football pod today he was clear that 15 points would be deducted if creditors did not get at least 25p in the £. Possibly recorded before what he said on Twitter?

Interestingly, he also said Ashley may still be hovering but is being blocked because Morris doesn't like him. It comes as no surprise to me if Morris is still pulling the strings.

If creditors don't get at least 25% back then there will be another deduction (personal view is it should be 1pt per percentage point shy of 100% you are) but it doesn't automatically kick in next season.

We could turn around and say that we'll pay back more but over a longer period in which case the deduction won't be applied immediately, and only then if we then don't pay back 35%. We'd be under a strict business plan which you'd assume would make being competitive harder but we could start next year on zero. 

[Derby_Ram]

7 minutes ago, Mr Popodopolous said:

As an aside, did we know that Mel Morris may well have donated to the Tories in 2017? Or at least to Patrick McLoughlin. That said the size or regularity of donation isn't exactly one that would be associated with influence, not large enough or regular enough IMO.

Well known locally if not on a wider basis. Caused quite a rumpus a couple of months ago when it emerged one of the fans largely responsible for mobilising the fans and engaging MPs was Patrick's son and questions over whether he was doing that to deflect attention from MM.

He did call out MM - could have made for an interesting Sunday lunch with dad - but being an ex-advisor to10 Downing Street was useful in the campaign by knowing how to successfully engage the MPs and get a parliamentary question asked.

[Mr Popodopolous]

1 hour ago, Derby_Ram said:

Well known locally if not on a wider basis. Caused quite a rumpus a couple of months ago when it emerged one of the fans largely responsible for mobilising the fans and engaging MPs was Patrick's son and questions over whether he was doing that to deflect attention from MM.

He did call out MM - could have made for an interesting Sunday lunch with dad - but being an ex-advisor to10 Downing Street was useful in the campaign by knowing how to successfully engage the MPs and get a parliamentary question asked.

Yeah saw something about that on Twitter the bit about the son of Patrick McLoughlin although didn't really pay a lot of attention. The donation is interesting as although it's obvious Mel Morris is a Tory, it seems neither big enough or long lasting enough/recurring enough for a long term influence. All the same it seems raiseable in Parliament IMO, donation by Mel, stadium of Mel POTENTIALLY sold to the Council given the HMRC issue- why he made the donation is unclear as the seat has been a pretty safe Tory one since inception and before that was West Derbyshire (as per Wiki) and Tory since 1950 so it's hardly likely McLoughlin loses in 2017.

Definitely could have and yes that side of it would have helped agreed- networking and knowhow all that.

[Davefevs]

1 hour ago, Derby_Ram said:

If creditors don't get at least 25% back then there will be another deduction (personal view is it should be 1pt per percentage point shy of 100% you are) but it doesn't automatically kick in next season.

We could turn around and say that we'll pay back more but over a longer period in which case the deduction won't be applied immediately, and only then if we then don't pay back 35%. We'd be under a strict business plan which you'd assume would make being competitive harder but we could start next year on zero. 

From a points deduction point of view, if you agree to that the settlement is  25% immediately or 35% over 3 years, you are deemed to have met the EFL insolvency policy, I.e. no points deduction at all, nor in the future, it’s not deferred.  Of course in the 3 year example, I don’t know what the penalty is for failing to meet the obligation, that’s a different kettle of fish.

What KM is saying, whatever agreement is made to come out of administration if it doesn’t meet the EFL 25% / 35% over 3 years, you will be hit with a 15 point penalty and under “sporting sanction” it will be applied next season.

So in summary:

- pass the EFL insolvency rules - 0 points deduction

- fail to meet it - 15 points applied next season (assumes you don’t get enough points this season to beat relegation).

Happy to be challenged.

[phantom]

17 hours ago, Davefevs said:

Out of interest, what did I do / post to turn you from being all “pally” with me to becoming all passive aggressive and trolling my posts?

 

15 hours ago, REDOXO said:

 Thats why the ignore button exists fella. It works great providing people don’t quote him! 

and why we have a PM system, my guess is someone gets rattled for claiming to be ITK when blatantly they know F all

10 hours ago, billywedlock said:

But he keeps changing his username . It’s a moving “ ignore “  target . A real saddo . 

But you are ignoring the user not the username

[phantom]

4 hours ago, Derby_Ram said:

Finally looking forward to - shock horror - talking some actual football with you ahead of next week.

We're all looking forward to mathematically relegating you that afternoon   assuming that you survive that long 

[phantom]

17 hours ago, Waconda said:

What are you going to do when this is sorted in the next few days ?

Big hole in your life.

An odd post, as there are two other people who this would apply to but @Davefevs is not one of those that has invested a lot of time and knowledge into this thread

[REDOXO]

16 minutes ago, phantom said:

 

and why we have a PM system, my guess is someone gets rattled for claiming to be ITK when blatantly they know F all

But you are ignoring the user not the username

Agh that is something most didn't realize I reckon. So a name change makes no difference.
 

 But I guess you can rejoin as a new user from a different device and just be a brand new knob? 
 

The PM system is great, but would never use it with a troll or a half wit!
 

Since I have made really good use of the ignore button this place raises my blood pressure so much less, as I choose the people I interact with carefully!

I note your response to the poster in question and his needless comment! 

 

 

Edited April 7, 2022 by REDOXO

[Derby_Ram]

21 minutes ago, phantom said:

We're all looking forward to mathematically relegating you that afternoon   assuming that you survive that long 

I think your confidence is misplaced. QPR on Easter Monday is the holder of the lucky ticket for that one. 

In reality though if it does reach the 23rd we both know it'll be Reading getting the required points as opposed to you winning that'll see us go relegated that day. Chrissy Martin just wouldn't allow it

[REDOXO]

38 minutes ago, Derby_Ram said:

I think your confidence is misplaced. QPR on Easter Monday is the holder of the lucky ticket for that one. 

In reality though if it does reach the 23rd we both know it'll be Reading getting the required points as opposed to you winning that'll see us go relegated that day. Chrissy Martin just wouldn't allow it

Andi Weimann would be ok with it I reckon!

[Mr Popodopolous]

58 minutes ago, Derby_Ram said:

I think your confidence is misplaced. QPR on Easter Monday is the holder of the lucky ticket for that one. 

In reality though if it does reach the 23rd we both know it'll be Reading getting the required points as opposed to you winning that'll see us go relegated that day. Chrissy Martin just wouldn't allow it

There is also another element which I have alluded to...NP, well one report suggested his time at Derby was so bad it nearly turned him off football.

Wonder if he would send them out fired up big if we could mathematically relegate Derby on that day.

Extract from an article by Matt Lawton last year.

Quote

Pearson blames experiences with Derby and Morris for almost making him quit football for good

I think he'd have no issue?

Edited April 7, 2022 by Mr Popodopolous

[Derby_Ram]

I don't think Pearson would have an issue at all. My issue on that would be from your perspective as fans .

If he can turn around and get the players all fired up to come flying out the traps in a pretty much meaningless game to them, against a better team(!!), with a cracking home record, why hasn't he been doing it all year? Excluding points penalties I make it you'd be 3 points clear of the relegation zone and it would be a huge game.

Obviously an element of tongue-in-cheek in that comment, and I'm intrigued to see how our players cope with the last month as its been a draining year all round the club, but I do think there'd be valid question marks if you're suddenly on fire come the 23rd.

[REDOXO]

1 hour ago, Derby_Ram said:

I don't think Pearson would have an issue at all. My issue on that would be from your perspective as fans .

If he can turn around and get the players all fired up to come flying out the traps in a pretty much meaningless game to them, against a better team(!!), with a cracking home record, why hasn't he been doing it all year? Excluding points penalties I make it you'd be 3 points clear of the relegation zone and it would be a huge game.

Obviously an element of tongue-in-cheek in that comment, and I'm intrigued to see how our players cope with the last month as its been a draining year all round the club, but I do think there'd be valid question marks if you're suddenly on fire come the 23rd.

City have had two horror years with injuries, but it has had upside under Pearson. He’s played various kids from the academy a couple of youngster he brought in and now seems to have made a first teamer out of a late to the Game Center back. Couple that with Weimann who has had a phenomenal season, there is a lot more upside than some of the numpties here will have you believe. 

[ExiledAjax]

1 hour ago, Derby_Ram said:

I don't think Pearson would have an issue at all. My issue on that would be from your perspective as fans .

If he can turn around and get the players all fired up to come flying out the traps in a pretty much meaningless game to them, against a better team(!!), with a cracking home record, why hasn't he been doing it all year? Excluding points penalties I make it you'd be 3 points clear of the relegation zone and it would be a huge game.

Obviously an element of tongue-in-cheek in that comment, and I'm intrigued to see how our players cope with the last month as its been a draining year all round the club, but I do think there'd be valid question marks if you're suddenly on fire come the 23rd.

Oh come now, no one is going to be "all fired up" or "on fire". It's going to be a middling end of season run out between two teams that just want the season to end. We'll be safe in 17th, with nothing to play for, and you'll already be planning  your trips to Cheltenham, Cambridge, and Portsmouth.

Let's all just plan for a few ciders in the sun, get the St Georges flags out, and have a lovely old celebration of average football being played out in the dog days of the season.

It's going to be my first visit to PP and it may well be many years until the opportunity comes again, so I plan on enjoying it.

[Hxj]

5 hours ago, Derby_Ram said:

If creditors don't get at least 25% back then there will be another deduction (personal view is it should be 1pt per percentage point shy of 100% you are) but it doesn't automatically kick in next season.

We could turn around and say that we'll pay back more but over a longer period in which case the deduction won't be applied immediately, and only then if we then don't pay back 35%. We'd be under a strict business plan which you'd assume would make being competitive harder but we could start next year on zero. 

Trouble is Administrations generally don't work like that.

Exits from Administration are usually Dissolution/Liquidation or a CVA.  A CVA is a contractual arrangement so it will be obvious from the outset whether or not the 25% or 35% rules are to be met.  Three year CVAs are unusual as to be blunt creditors generally want whatever they can get up front.

The usual transactions are that a NewCo acquires all the assets of OldCo in exchange for sufficient funds to meet the immediate CVA.   OldCo pays out the CVA and then Liquidates.  The EFL are happy to transfer the Golden Share in such an arrangement provided their conditions regarding Football Creditors and Unsecured Creditors are met.

[Davefevs]

The plot thicketh 

Conspiracy theory: working with Ashley, pull out at last minute, leaving Ashley (who Morris won’t want to own DC) as the only option.

[Davefevs]

And in flipside:

 

[Major Isewater]

7 minutes ago, Davefevs said:

The plot thicketh 

Conspiracy theory: working with Ashley, pull out at last minute, leaving Ashley (who Morris won’t want to own DC) as the only option.

It would be funny for me as my youngest son is a Newcastle fan ( glory hunter since the Keegan days! ) and couldn’t wait to see the back of Ashley. 
My eldest son was born in Derby , guess who he supports? 
 

[Silvio Dante]

20 minutes ago, Major Isewater said:

It would be funny for me as my youngest son is a Newcastle fan ( glory hunter since the Keegan days! ) and couldn’t wait to see the back of Ashley. 
My eldest son was born in Derby , guess who he supports? 
 

Is it Stevenage?

[chinapig]

30 minutes ago, Davefevs said:

The plot thicketh 

Conspiracy theory: working with Ashley, pull out at last minute, leaving Ashley (who Morris won’t want to own DC) as the only option.

Didn't somebody buy Palace then sell to Simon Jordan the next day?

But presumably Craig Hope is just another member of the global conspiracy against the plucky underdogs so can be disregarded.

[Waconda]

On 06/04/2022 at 22:57, Davefevs said:

Out of interest, what did I do / post to turn you from being all “pally” with me to becoming all passive aggressive and trolling my posts?

Probably about the time you published private messages between us on a public forum to gain favour with your "gang" mates.

Sadly that revealed the type of character you are and that everything you post therefore needs to be scrutinised and challenged.

Just because you spoke to Gould once and can manufacture often meaningless spreadsheets does not not make you the expert you seem to advertise yourself as.

My opinion just as valid as yours or anyone else's on here as as long as that principle is adhered to then no problem surely ?

[Red-Robbo]

45 minutes ago, Major Isewater said:

It would be funny for me as my youngest son is a Newcastle fan ( glory hunter since the Keegan days! ) and couldn’t wait to see the back of Ashley. 
My eldest son was born in Derby , guess who he supports? 
 

 

I told my kids they'll be disinherited if they support anyone other than City.   

[cheese]

1 hour ago, Red-Robbo said:

 

I told my kids they'll be disinherited if they support anyone other than City.   

Yeah, but perhaps you got stuff they can inherit!  

[Red-Robbo]

28 minutes ago, cheese said:

Yeah, but perhaps you got stuff they can inherit!  

 

My vintage programme collection. 

[Sir Geoff]

Didn't a PNE 'insider' tell Kieren Maguire that Kitchener was unable to show that he had the funds to buy them, which is why the deal went belly up.

[ExiledAjax]

3 hours ago, Davefevs said:

The plot thicketh 

Conspiracy theory: working with Ashley, pull out at last minute, leaving Ashley (who Morris won’t want to own DC) as the only option.

"Sportsmail has been told he never proved the source of his funding but did provide a bank statement showing a balance of over £60million. It is claimed Kirchner said he made the money from bitcoin investments.

It is also understood that Preston had to write the buyer’s business plan, needed to satisfy the EFL he could finance the club for the next 18 months. As one source said: ‘Preston never really knew if he had the money or where it came from."

So he's got the deposit, which came from a bit of luck getting in early on bitcoin, but he can't prove that he can pay the mortgage, bills, or for the repairs to the roof, carpet, and walls.

 

 

[Hxj]

53 minutes ago, ExiledAjax said:

So he's got the deposit, which came from a bit of luck getting in early on bitcoin,

Allegedly.

It's surprisingly easy (if you can pay the fee) to borrow £60 million for the time needed for it to appear in a bank account in your name.

But of course any withdrawals are blocked without the permission of the bank.

[Colemanballs]

Michael Knighton mark II?

[Major Isewater]

6 hours ago, Silvio Dante said:

Is it Stevenage?

In one. 

[Hxj]

So great day for Derby, Reading lost.  Oh but Derby lost too.

Reading still on 37 points and Derby on 28, with 5 to play. Derby need to take 9 more points over five games, that's 1.8 extra points a game, some task as that is automatic promotion performance

More interestingly if Reading get no more points, Derby can only do this by winning at least three games or wining 2 and drawing 3.  Based upon that scenario the earliest that Derby can get relegated is on Saturday 23 April ...

Assuming the remaining results go against them against them it could be Monday 18 April against QPR.

Of course Derby also need to get one more point than Barnsley to finish ahead of them, and the same as Peterborough to stay ahead of them.

Edited April 9, 2022 by Hxj

[chinapig]

Kieran Maguire said on his podcast this morning that, if his sources are accurate, the bid is not good news for HMRC and unsecured creditors. As he rightly said, Kirchner had his bid roundly rejected in December and he certainly won't have increased it since.

This comes as no surprise of course but there is a long way to go on this yet.

[exAtyeoMax]

9 minutes ago, chinapig said:

Kieran Maguire said on his podcast this morning that, if his sources are accurate, the bid is not good news for HMRC and unsecured creditors. As he rightly said, Kirchner had his bid roundly rejected in December and he certainly won't have increased it since.

This comes as no surprise of course but there is a long way to go on this yet.

Thanks, I'll have to listen to the pod, because I don't understand that bit

[chinapig]

9 minutes ago, exAtyeoMax said:

Thanks, I'll have to listen to the pod, because I don't understand that bit

It implies that HMRC will have to take a haircut one way or another. Whether they are prepared to do so remains to be seen, though they may come under political pressure perhaps.

I certainly can't see Kirchner having the money or the will to pay the debt in full.

[Hxj]

8 hours ago, chinapig said:

This comes as no surprise of course but there is a long way to go on this yet.

I'm still led to undertand that the money will have run out four weeks today.  An awful lot to do in so little time, If it does progress I bet some lawyers are going to be earning big style over the Easter weekend. 

[slartibartfast]

10 hours ago, exAtyeoMax said:

Thanks, I'll have to listen to the pod, because I don't understand that bit

Yes, I thought there is no "bad news" for HMRC.......they come first, it's the law ?

The "political pressure"...... is that for, or against WRDC ?

[Lanterne Rouge]

5 minutes ago, slartibartfast said:

Yes, I thought there is no "bad news" for HMRC.......they come first, it's the law ?

The "political pressure"...... is that for, or against WRDC ?

Perhaps we`ll find out that Derby have been registered as a non-dom and have paid all their taxes in the People`s Republic of Matlock.

[exAtyeoMax]

12 minutes ago, slartibartfast said:

Yes, I thought there is no "bad news" for HMRC.......they come first, it's the law ?

The "political pressure"...... is that for, or against WRDC ?

Yes, I listened and still don't understand what they meant.

[chinapig]

1 hour ago, slartibartfast said:

Yes, I thought there is no "bad news" for HMRC.......they come first, it's the law ?

The "political pressure"...... is that for, or against WRDC ?

No, football creditors come first. HMRC are not going to get their money up front or in full so either they accept a payment plan or go for a winding up order. Then they would be blamed for the club's demise and Morris would be off the hook.

The political pressure in Derby's favour comes from the local MPs. It was debated in the Commons after all, with some push for HMRC to go easy on them. There are votes to be had if you claim that you saved the club from the evil taxman.

Still, trust the process eh? Cynical, me?

[PHILINFRANCE]

1 hour ago, chinapig said:

No, football creditors come first. HMRC are not going to get their money up front or in full so either they accept a payment plan or go for a winding up order. Then they would be blamed for the club's demise and Morris would be off the hook.

I may be wrong, but I thought I read somewhere that the law changed fairly recently so that, quite rightly in my opinion, HMRC’s claim now takes preference over football creditors.

[slartibartfast]

1 hour ago, chinapig said:

No, football creditors come first. HMRC are not going to get their money up front or in full so either they accept a payment plan or go for a winding up order. Then they would be blamed for the club's demise and Morris would be off the hook.

The political pressure in Derby's favour comes from the local MPs. It was debated in the Commons after all, with some push for HMRC to go easy on them. There are votes to be had if you claim that you saved the club from the evil taxman.

Still, trust the process eh? Cynical, me?

I would have thought the votes are inconsequential, that area is staunch Tory anyhow. Would have thought in this financial country wide mess ,the last thing the government would want was someone else "getting away with it "?

[chinapig]

8 hours ago, PHILINFRANCE said:

I may be wrong, but I thought I read somewhere that the law changed fairly recently so that, quite rightly in my opinion, HMRC’s claim now takes preference over football creditors.

The law was changed as you say but to make them a secondary preferential creditor. For EFL purposes football creditors still come first.

[chinapig]

8 hours ago, slartibartfast said:

I would have thought the votes are inconsequential, that area is staunch Tory anyhow. Would have thought in this financial country wide mess ,the last thing the government would want was someone else "getting away with it "?

You may well be right and I'm speculating.

If the situation arises I suppose there might be a tension between "we saved WRDC from the evil taxman" and "we can't let people not pay their taxes, let this be a lesson to others". Of course Morris is morally responsible but not legally so either way he gets away with it.

The local MPs have made a big deal of how much they are doing to save the club so there might be a negative impact on their reputations at least if the club is liquidated.

I also wonder if the public at large would be as bothered about a football club not paying its taxes as they would be a politician.

Time is running out so we'll soon know.

[Hxj]

2 hours ago, chinapig said:

The law was changed as you say but to make them a secondary preferential creditor. For EFL purposes football creditors still come first.

And this is the nub of one of the issues for the club coming out of Administration.  HMRC are perfectly entitled to sit there and say, "No problem, we will just sit and collect our preferential debt in line with the law and our published practice."  Not much anyone can really do about that, not even the EFL.  Given the Administrators are personally liable, would they knowing hand over several millions of pounds to Football Creditors ahead of a preferential creditor. 

Despite what they might say backbench MPs have little real sway over HMRC, which has no minister presiding over it.

Wonder if someone will seek a Judicial Review of any decision to not collect the full preferential share, that could really screw matters up. 

Edited April 12, 2022 by Hxj

[Mr Popodopolous]

1 hour ago, Hxj said:

And this is the nub of one of the issues for the club coming out of Administration.  HMRC are perfectly entitled to sit there and say, "No problem, we will just sit and collect our preferential debt in line with the law and our published practice."  Not much anyone can really do about that, not even the EFL.  Given the Administrators are personally liable, would they knowing hand over several millions of pounds to Football Creditors ahead of a preferential creditor.

Presumably that scenario would see a club booted from the EFL? Not paying Football creditors in full etc.

1 hour ago, Hxj said:

Despite what they might say backbench MPs have little real sway over HMRC, which has no minister presiding over it.

Chancellor of the Exchequer? Only possible one I can think of or is that just the Treasury. Granted, as Chancellor they should especially in these times be as pro as big a tax take as possible.

1 hour ago, Hxj said:

Wonder if someone will seek a Judicial Review of any decision to not collect the full preferential share, that could really screw matters up. 

IIRC there are categories of HMRC debt that aren't preferential. All the same a lot of Derby's is! By not collect do you mean not collect all at once ie a chunk now and the rest over x years or do you just mean verbatim write off a good chunk.

[PHILINFRANCE]

3 hours ago, chinapig said:

The law was changed as you say but to make them a secondary preferential creditor. For EFL purposes football creditors still come first.

 

1 hour ago, Hxj said:

And this is the nub of one of the issues for the club coming out of Administration.  HMRC are perfectly entitled to sit there and say, "No problem, we will just sit and collect our preferential debt in line with the law and our published practice."  Not much anyone can really do about that, not even the EFL.  Given the Administrators are personally liable, would they knowing hand over several millions of pounds to Football Creditors ahead of a preferential creditor. 

Wonder if someone will seek a Judicial Review of any decision to not collect the full preferential share, that could really screw matters up. 

So, if I understand the situation correctly, the law has indeed changed, as I suggested in my earlier post.

The Law states that HMRC are first in line as preferential creditors, although, in effect, the EFL are saying their internal rules overide the Law and HMRC's published practice.

If my understanding is correct, and I am sure somebody more knowledgeable than me will be able to advise, some interesting times lie in wait.

I still foresee CK pulling out when/if he realises HMRC won't budge from their stated position, and either Mike Ashley stepping in at the last minute to 'save' the club out of goodwill  or liquidation.

 

[Hxj]

1 minute ago, Mr Popodopolous said:

Presumably that scenario would see a club booted from the EFL? Not paying Football creditors in full etc.

That's my understanding.

 

2 minutes ago, Mr Popodopolous said:

Chancellor of the Exchequer?

Nope - as you say HM Treasury

 

6 minutes ago, Mr Popodopolous said:

IIRC there are categories of HMRC debt that aren't preferential.

The preferential ones are those collected on behalf of government, so VAT and PAYE/NIC.  But not Corporation Tax or Employers' NIC.

 

8 minutes ago, Mr Popodopolous said:

By not collect do you mean not collect all at once ie a chunk now and the rest over x years or do you just mean verbatim write off a good chunk.

I mean not collecting because they forgo their preferential rights in a CVA for example.  It is rare for there to be any term payments in a CVA, assets are transferred to a NewCo and OldCo goes into liquidation, extingushing any remainder.

[Hxj]

5 minutes ago, PHILINFRANCE said:

The Law states that HMRC are first in line as preferential creditors, although, in effect, the EFL are saying their internal rules overide the Law and HMRC's published practice.

If my understanding is correct

Roughly correct - Technically HMRC are behind, secured creditors (to the extent of their security), loans by Administrator, fees and costs of the Administration, preferential creditiors (redundancy pay, employees pension contributions etc), then second preferential creditors HMRC (as above), then unsecured creditors (including Football creditors), then shareholders.

EFL rules say that Football Creditors are 'super-preferential creditors'.

HMRC have a published practice which states that they will not agree to a CVA where, to paraphrase, non-football unsecured creditors are shafted by Football Creditors.  In the Derby case HMRC control any exit from Administration.

[ScottishRed]

I would be more than surprised if HMRC agreed to any CVA that did not pay them in full.

Not only does that create a very dangerous precedent it would also cause outrage amongst the general public in these very difficult times.

As a tax payer I would certainly be less than impressed and I am sure I would be in a large majority.

[Davefevs]

10 minutes ago, Hxj said:

Roughly correct - Technically HMRC are behind, secured creditors (to the extent of their security), loans by Administrator, fees and costs of the Administration, preferential creditiors (redundancy pay, employees pension contributions etc), then second preferential creditors HMRC (as above), then unsecured creditors (including Football creditors), then shareholders.

EFL rules say that Football Creditors are 'super-preferential creditors'.

HMRC have a published practice which states that they will not agree to a CVA where, to paraphrase, non-football unsecured creditors are shafted by Football Creditors.  In the Derby case HMRC control any exit from Administration.

I guess from Mr P’s point of view, the EFL rules don’t trump Administration Laws, just dictate whether Derby 1) stay in the EFL or not and 2) receive a 15 point deduction.

[Mr Popodopolous]

28 minutes ago, ScottishRed said:

I would be more than surprised if HMRC agreed to any CVA that did not pay them in full.

Not only does that create a very dangerous precedent it would also cause outrage amongst the general public in these very difficult times.

As a tax payer I would certainly be less than impressed and I am sure I would be in a large majority.

Agreed on all points, although a) The numbers I have seen mooted on various social media this last 6 months were 25% to a third as the exit deal number. Time will tell and b) The precedent argument has been challenged although this latter bit was on Dcfcfans.

The optics of any sweetheart deal would be terrible though for the reasons that you state.

[chinapig]

11 minutes ago, Mr Popodopolous said:

Agreed on all points, although a) The numbers I have seen mooted on various social media this last 6 months were 25% to a third as the exit deal number. Time will tell and b) The precedent argument has been challenged although this latter bit was on Dcfcfans.

The optics of any sweetheart deal would be terrible though for the reasons that you state.

HMRC claim they do not do sweetheart deals.

https://www.gov.uk/government/news/hmrc-responses-to-inaccurate-claims#hmrc-does-not-do-sweetheart-deals-with-anyone

Fact: HMRC does not do ‘sweetheart deals’. HMRC aims to make sure every taxpayer, no matter what their size, pays everything they owe.

Some (like Taxwatch) will dispute that and point to historical cases where they have done just that. Google and Goldman Sachs were two cases iirc.

 

 

[Sir Geoff]

4 minutes ago, chinapig said:

HMRC claim they do not do sweetheart deals.

https://www.gov.uk/government/news/hmrc-responses-to-inaccurate-claims#hmrc-does-not-do-sweetheart-deals-with-anyone

Fact: HMRC does not do ‘sweetheart deals’. HMRC aims to make sure every taxpayer, no matter what their size, pays everything they owe.

Some (like Taxwatch) will dispute that and point to historical cases where they have done just that. Google and Goldman Sachs were two cases iirc.

 

 

HMRC will never accept a lower payment than we could reasonably expect to achieve in court. We will only accept the full amount of tax, interest and penalties owed.

If multinational corporations do not agree to settle a dispute with HMRC, we will take this to a tribunal, and we win most cases.

[chinapig]

1 hour ago, Hxj said:

Roughly correct - Technically HMRC are behind, secured creditors (to the extent of their security), loans by Administrator, fees and costs of the Administration, preferential creditiors (redundancy pay, employees pension contributions etc), then second preferential creditors HMRC (as above), then unsecured creditors (including Football creditors), then shareholders.

EFL rules say that Football Creditors are 'super-preferential creditors'.

HMRC have a published practice which states that they will not agree to a CVA where, to paraphrase, non-football unsecured creditors are shafted by Football Creditors.  In the Derby case HMRC control any exit from Administration.

This may no longer be relevant but didn't HMRC challenge the football creditors rule in court and lose?

[ExiledAjax]

1 hour ago, PHILINFRANCE said:

The Law states that HMRC are first in line as preferential creditors, although, in effect, the EFL are saying their internal rules overide the Law and HMRC's published practice.

Crucial distinction of language Phil. The EFL rules do not "override" Insolvency Law. Rather they operate in addition to standard Insolvency Laws, and even then only in so far as Derby wish to remain in the EFL.

The football creditors rule does not prevent the company from exiting administration in the normal way, ie by agreeing a purchase that provides funds to agree a deal with its creditors.

However the EFL, as a private members club, then say that if you do that without paying your football creditors first, then you're no longer welcome in the EFL.

Derby could exit without paying football creditors. They could do that and still be a football club. They'd just have to go and play in non-league. If and when they achieved promotion to League 2 then there would be a discussion with the EFL.

Practically that means that a buyer would be paying millions for a non-league club, and so that's the "real-world" block to exiting in this way.

[chinapig]

33 minutes ago, Sir Geoff said:

HMRC will never accept a lower payment than we could reasonably expect to achieve in court. We will only accept the full amount of tax, interest and penalties owed.

If multinational corporations do not agree to settle a dispute with HMRC, we will take this to a tribunal, and we win most cases.

Thanks, that's helpful. I'm not qualified to judge and I'm going off topic but their claims are still disputed. Take this from TaxWatch and an All Party Parliamentary Group re a deal done with GE (though HMRC say they got as much as they could have got it they had gone to court):

TaxWatch has written to the Public Accounts Committee (PAC), the National Audit Office, and the Treasury Committee, requesting that inquiries be held into an out of court settlement between HMRC and General Electric (GE).

Following a lengthy tax dispute regarding a tax avoidance scheme that saw billions of dollars transferred around the world, it was revealed in the trade press on 15 September that the two parties had reached an out of court settlement, with HMRC settling for a deal that involved no cash payment and just £82m added to GE’s deferred tax charge, and agreeing that there had been no wrongdoing by GE.

GE revealed in their 2020 accounts that if HMRC were successful in their claim, they could face a liability of $1.1bn, before accounting for interest and penalties.

[REDOXO]

6 minutes ago, ExiledAjax said:

Crucial distinction of language Phil. The EFL rules do not "override" Insolvency Law. Rather they operate in addition to standard Insolvency Laws, and even then only in so far as Derby wish to remain in the EFL.

The football creditors rule does not prevent the company from exiting administration in the normal way, ie by agreeing a purchase that provides funds to agree a deal with its creditors.

However the EFL, as a private members club, then say that if you do that without paying your football creditors first, then you're no longer welcome in the EFL.

Derby could exit without paying football creditors. They could do that and still be a football club. They'd just have to go and play in non-league. If and when they achieved promotion to League 2 then there would be a discussion with the EFL.

Practically that means that a buyer would be paying millions for a non-league club, and so that's the "real-world" block to exiting in this way.

Exactly the way I understand it! 
 

I’m amazed that there is still an idea that HMRC will somehow not demand full payment over time with a large payment up front. 
 

I just don’t see Derby being bought by anyone as the exit barriers are so high. Up to and including, No Ground, 28m of HMRC Debt, A minimum of 12m owed to other clubs including players who have been sold to make some cash and unknown other debt to multiple suppliers and national and local businesses. 
 

What I really don’t understand is what it is buyers are actually buying as the club has multiple players out of contract and nothing much that I see as tangible. 
 

Now if the purchase price was actually what the club is going to use to pay some of these debts then ok. But that still leaves the ground owned by an outside entity. 
 

Buying distressed business happens all the time but that is reflected in the price. However Derby County are beyond distressed they are a debt mountain that once was a football club. 

[REDOXO]

4 minutes ago, chinapig said:

Thanks, that's helpful. I'm not qualified to judge and I'm going off topic but their claims are still disputed. Take this from TaxWatch and an All Party Parliamentary Group re a deal done with GE (though HMRC say they got as much as they could have got it they had gone to court):

TaxWatch has written to the Public Accounts Committee (PAC), the National Audit Office, and the Treasury Committee, requesting that inquiries be held into an out of court settlement between HMRC and General Electric (GE).

Following a lengthy tax dispute regarding a tax avoidance scheme that saw billions of dollars transferred around the world, it was revealed in the trade press on 15 September that the two parties had reached an out of court settlement, with HMRC settling for a deal that involved no cash payment and just £82m added to GE’s deferred tax charge, and agreeing that there had been no wrongdoing by GE.

GE revealed in their 2020 accounts that if HMRC were successful in their claim, they could face a liability of $1.1bn, before accounting for interest and penalties.

Having quite a bit of experience in litigation. I would suggest that HMRC took a view that they could lose in court as GE practices may not have been seen as illegal. Thus they do a deal that suits both parties and close any loopholes that allowed GE to move their money around. 
 

Derby is nothing like that. This is a case of not playing taxes particularly, players income tax. Derby have no defense AND CRUCIALLY no money to defend against any  order anyway. 

[PHILINFRANCE]

10 minutes ago, ExiledAjax said:

Crucial distinction of language Phil. The EFL rules do not "override" Insolvency Law. Rather they operate in addition to standard Insolvency Laws, and even then only in so far as Derby wish to remain in the EFL.

The football creditors rule does not prevent the company from exiting administration in the normal way, ie by agreeing a purchase that provides funds to agree a deal with its creditors.

However the EFL, as a private members club, then say that if you do that without paying your football creditors first, then you're no longer welcome in the EFL.

Derby could exit without paying football creditors. They could do that and still be a football club. They'd just have to go and play in non-league. If and when they achieved promotion to League 2 then there would be a discussion with the EFL.

Practically that means that a buyer would be paying millions for a non-league club, and so that's the "real-world" block to exiting in this way.

That is what I was trying to say, although it would seem I didn't make myself sufficiently clear.

I wrote that 'The Law states that HMRC are first in line as preferential creditors, although, in effect, the EFL are saying their internal rules override the Law and HMRC's published practice'.

What I was trying to indicate was that, in effect, the EFL are saying their creditors are more important than HMRC and, if Derby wish to remain in the EFL, they must be settled, regardless of what payments, if any, are made to HMRC. 

Be that as it may, my understanding is that HMRC consider (rightly, in my opinion) that their debt takes preference over EFL's football creditors, regardless of what the EFL might think.

Hence my belief that, once it is made clear HMRC's debt must be settled in full, over several years if necessary, as must the EFL's football creditors (if Derby wish to remain in the EFL), CK will pull out and liquidation will follow. 

[chinapig]

6 minutes ago, REDOXO said:

Having quite a bit of experience in litigation. I would suggest that HMRC took a view that they could lose in court as GE practices may not have been seen as illegal. Thus they do a deal that suits both parties and close any loopholes that allowed GE to move their money around. 
 

Derby is nothing like that. This is a case of not playing taxes particularly, players income tax. Derby have no defense AND CRUCIALLY no money to defend against any  order anyway. 

I'm sure you are right about GE given your expertise. I suppose the dispute was to do with the fact that the settlement was so much less than HMRC claimed was due.

You are certainly right about Derby. Their fans might be wise to keep the champagne on ice.

[ExiledAjax]

9 minutes ago, PHILINFRANCE said:

That is what I was trying to say, although it would seem I didn't make myself sufficiently clear.

I wrote that 'The Law states that HMRC are first in line as preferential creditors, although, in effect, the EFL are saying their internal rules override the Law and HMRC's published practice'.

What I was trying to indicate was that, in effect, the EFL are saying their creditors are more important than HMRC and, if Derby wish to remain in the EFL, they must be settled, regardless of what payments, if any, are made to HMRC. 

Be that as it may, my understanding is that HMRC consider (rightly, in my opinion) that their debt takes preference over EFL's football creditors, regardless of what the EFL might think.

Hence my belief that, once it is made clear HMRC's debt must be settled in full, over several years if necessary, as must the EFL's football creditors (if Derby wish to remain in the EFL), CK will pull out and liquidation will follow. 

Agreed. Thanks for further explaining. 

[Davefevs]

37 minutes ago, ExiledAjax said:

Crucial distinction of language Phil. The EFL rules do not "override" Insolvency Law. Rather they operate in addition to standard Insolvency Laws, and even then only in so far as Derby wish to remain in the EFL.

The football creditors rule does not prevent the company from exiting administration in the normal way, ie by agreeing a purchase that provides funds to agree a deal with its creditors.

However the EFL, as a private members club, then say that if you do that without paying your football creditors first, then you're no longer welcome in the EFL.

Derby could exit without paying football creditors. They could do that and still be a football club. They'd just have to go and play in non-league. If and when they achieved promotion to League 2 then there would be a discussion with the EFL.

Practically that means that a buyer would be paying millions for a non-league club, and so that's the "real-world" block to exiting in this way.

Better explanation than mine.

[chinapig]

45 minutes ago, REDOXO said:

Exactly the way I understand it! 
 

I’m amazed that there is still an idea that HMRC will somehow not demand full payment over time with a large payment up front. 
 

I just don’t see Derby being bought by anyone as the exit barriers are so high. Up to and including, No Ground, 28m of HMRC Debt, A minimum of 12m owed to other clubs including players who have been sold to make some cash and unknown other debt to multiple suppliers and national and local businesses. 
 

What I really don’t understand is what it is buyers are actually buying as the club has multiple players out of contract and nothing much that I see as tangible. 
 

Now if the purchase price was actually what the club is going to use to pay some of these debts then ok. But that still leaves the ground owned by an outside entity. 
 

Buying distressed business happens all the time but that is reflected in the price. However Derby County are beyond distressed they are a debt mountain that once was a football club. 

Yet Kirchner is said to want the Council to buy the stadium and Rooney is talking about signing 30 players to cover the first team and U21s.

[ExiledAjax]

5 minutes ago, chinapig said:

Yet Kirchner is said to want the Council to buy the stadium and Rooney is talking about signing 30 players to cover the first team and U21s.

Have the council actually come and said they are willing to buy the stadium? I've seen a lot of chat from Derby parties that seem to suggest it's a done deal...but the latest reliable news (from 4 April) suggests that this isn't quite the case.

https://www.google.com/amp/s/www.bbc.co.uk/news/uk-england-derbyshire-60989047.amp

"Derby City Council's chief executive has played down suggestions it could buy Derby County's stadium...In a statement released to the Local Democracy Reporting Service, Mr Simpson said the council has been working with "Team Derby" - made up of business, civic and political leaders in the city - to try and help the Rams survive despite its "extremely challenging financial position"...

"Our preference is for a buyer to purchase the club and stadium outright."

 

 

[exAtyeoMax]

12 minutes ago, chinapig said:

Yet Kirchner is said to want the Council to buy the stadium and Rooney is talking about signing 30 players to cover the first team and U21s.

He doesn't say which 30 players…

[chinapig]

7 minutes ago, ExiledAjax said:

Have the council actually come and said they are willing to buy the stadium? I've seen a lot of chat from Derby parties that seem to suggest it's a done deal...but the latest reliable news (from 4 April) suggests that this isn't quite the case.

https://www.google.com/amp/s/www.bbc.co.uk/news/uk-england-derbyshire-60989047.amp

"Derby City Council's chief executive has played down suggestions it could buy Derby County's stadium...In a statement released to the Local Democracy Reporting Service, Mr Simpson said the council has been working with "Team Derby" - made up of business, civic and political leaders in the city - to try and help the Rams survive despite its "extremely challenging financial position"...

"Our preference is for a buyer to purchase the club and stadium outright."

 

 

No, you're right. Some people just seem to be taking it as a given.

Local Authorities have had massive cuts to central government funding since 2010 so quite how it could be justified is beyond me.

[REDOXO]

4 minutes ago, chinapig said:

No, you're right. Some people just seem to be taking it as a given.

Local Authorities have had massive cuts to central government funding since 2010 so quite how it could be justified is beyond me.

I just don’t see it either.
 

I have been involved where a local authority gave money to the seller of a historic house so the seller would not sell it to a developer but sell it to a party that would preserve it. BUT not anywhere the kind of money being spoken of here.

Also MM is an ambassador for Derby and Derbyshire CC all party’s could be in court for years if MM gets his money from local government! The Conflicts of interest here are very clear. 

[REDOXO]

4 minutes ago, billywedlock said:

How a council funded by taxes, can buy the stadium is beyond me. More so when it is to the benefit of an individual who chose not to pay his own liabilities to HMRC, whilst sitting on a fortune of hundreds of millions. 

I do understand the desire to keep the club alive, but we are talking here about the taxpayer taking a hit so one multi millionaire avoids his (created)  liabilities , whilst limiting his losses, and then another multi millionaire taking over, but only if the taxman is willing to write off the previous regimes mess. 

How HMRC got themselves in so deep is also beyond me. Whenever I have owed them a £ they come after you like a hurricane. £30M ??? How can that be ? 

Simple reality is, the club is worthless without any assets and no stadium or players, and Morris is trying to keep the ground. He does not want to sell to Ashley, as he knows he is going to get hammered. Kirchner will not, absolutely not, complete a deal before the end of this season. 

 

Yep!

The tax was the perfect storm taken advantage of by MM. 

As I understand it was government policy for HMRC to not go after corporations for debts during Covid. Thus allowing Morris to keep cranking it up. Bloke should be in jail not sitting on a stadium having bankrupted a football club!