Why not just enter voluntary administration?

[Lord Kangana]

"Why not just enter voluntary administration?"

Honestly ??

Really ???


I give up.

For a refreshing change, me and the clown are in 100% agreement.

Administration would f*ck us in more ways than the Kama Sutra.

Like it did, Bournemouth for example?

I'm not saying it won't be painful. I'm asking if the alternative might actually be worse. We are at the point of selling assets off. One way we have more control but no end game. The other we have little control but would end up debt free and potentially more enticing to a takeover from that point.

If a takeover is a strong possibility then the path the club are taking is probably right. But if not we could well end up selling off our assets to pay bills before entering administration eventually with a rescued portfolio of assets to sell off for creditors.

I don't think you quite understand what administration entails..

1) It's more expensive (to us, it has to be paid for out of our assets, administrators are not cheap - remember they are in control of the purse strings). This means in practice that we would accrue more, not less, 'debt'.

2) We have no control over what is sold. If we have creditors, they have to be satisfied under administration. In practice, this means they'll sell the sugar from our tea and the fillings from our mouths if they have any value whatsoever.

3) You are making a massive assumption that a buyer can be found. This would only satisfy the rules of administration if either they're stupid enough to honour our debts (really? come on) or everything is sold off in advance of a sale to satisfy creditors. See note 1 + 2.

[bobo the clown]

Let me try ... brief. Just the once more.

If you enter Administration the Administrator, before any defaulting is allowed, sells what assets he can ... as quickly as he can. "Salable assets" include players, property etc.

"As fast as he can" means rapidly and accepting the best offer which comes in in a very short time-scale. Thus the often used trm "fire-sale". As it's a buyer's market and it's quick you'll be lucky to get 20% of the proper value.

However, before any of that is allowed there are 2 "preferred" debtors. Very oddly, & contaversially, all foorball debts to players & clubs take precedence ... in full it seems. Then, the next priority is Her Majesty's Inland Revenue. All taxes owed must be paid in full.

The Administrator sets about their task with no emotion. Staff will be cut to the bone with only statutory redundancy payments.

Then ... & only then ... can you default on any monies owed. Usually done by dividing the debt and the cash held so that the debts are repaid at a %'age .... or "x in the £".. That means suppliers, clients, etc. get a fraction. You will see local newsagents, florists, carpenters, painter and decorators go out of business.

If the Administration does "well" there will then remain the basis of a phoenix to ruse again.


Now .... here's the rub ... the earlier mentioned "fire sale" means the person owning the assets gets only a fraction of their real value. The person in this case is Eddie Davies and, it appears, cans who've used our assets as collatoral. So .... the person who owns the club will lose out. There is no sense to doing this. Why would ED pay himself less than face value.

Why would the banks foreclose and lose their loans ?

There will be an arrangement.

... or, as bish says, we'll be reed.

[BWFC_Insane]

My question then is, what is the alternative? Assume no takeover, how do we carry on?

[bobo the clown]

We are not in a good position. I'm not claiming we are.

We may not come out of this in any way healthily, but "voluntary administration" would, given where the debt is, would be insane.

The ONLY way that would make sense is if ED is broke. Otherwise he'd be simply reducing his own debt by reducing our asset values. A little like letting your mortgage going into default and your house being sold by the building society for a pittance .... when it was actually your own building go society that you owed it to.

[Lord Kangana]

I have a feeling, unpalatable as it is, that if a buyer is't found ED may enter into it simply so he can stop pissing money down our particular drain. And perhaps take a little bit back. Its a worrying thought if that is his remaining option.

[BWFC_Insane]

Eddie Davies has written off his debt. The issue now is debt to others. As major creditor I doubt Eddie is trying to claw things back.

Is selling assets month to month to pay bills and operating costs better than administration? I'm not so sure. As I say clubs have been in and come out of administration. We appear to have had several buyers look and walk away. Is that because the initial outlay to pay off loans is too great?

[bobo the clown]

Do you really not understand this ???

[LeverEnd]

Do you really not understand this ???

No.

[thebish]

it's OK - cos Bobo does! chill!

[BWFC_Insane]

Do you really not understand this ???

You spell out the administration route.

Perhaps you could address the other route, the non administration option. That might deal with the meat of the debate rather than just addressing the one option?

All I'm asking is what advantage is selling off assets anyway only to give to payday loans companies and players wages anyway? The club will be selling them off themselves but still won't be keeping the cash.

[thebish]

the other route is also simple.

a squillionaire consortium of lovely people buys us and it all turns out to be reet.

word.

[TonyDomingos]

the other route is also simple.

a squillionaire consortium of lovely people buys us and it all turns out to be reet.

word.

That's a bigger leap of faith than the day job, Bish!

[Gudnib]

Eddie Davies has written off his debt. The issue now is debt to others. As major creditor I doubt Eddie is trying to claw things back.

Is selling assets month to month to pay bills and operating costs better than administration? I'm not so sure. As I say clubs have been in and come out of administration. We appear to have had several buyers look and walk away. Is that because the initial outlay to pay off loans is too great?

Isn't it more likely that Eddie wasn't so dumb as to hand over assets to individuals motivated by making a bit of a killing from the club's predicament?

I thought Eddie's willingness to write off the debt was conditional upon finding bona fide purchasers of his shares.

Its hard to believe that Eddie was happy about the decimation of his net worth by constantly being called upon to keep BWFC afloat but would he have done it without obtaining at least some security for his loans? No other lender would.

So, if assets were secured to Moonshift (now Fildraw), wouldn't Fildraw be at the front of the payout queue if asset sales were forced? i.e. ahead of preferred creditors like HMRC, employees etc.

[Gudnib]

Why no comments on my last post on this subject? Are the financial considerations completely beyond the comprehension of contributors to this and other websites? Is that why some cling to simplistic, uninformed and ill considered assumptions?

[bobo the clown]

Why no comments on my last post on this subject? Are the financial considerations completely beyond the comprehension of contributors to this and other websites? Is that why some cling to simplistic, uninformed and ill considered assumptions?

Well, I can't speak for anyone else but I found it pointless to respond to this ...

So, if assets were secured to Moonshift (now Fildraw), wouldn't Fildraw be at the front of the payout queue if asset sales were forced? i.e. ahead of preferred creditors like HMRC, employees etc.

... without absolute incredulity.

If you seriously think you can avoid your debt by transferring it to another wholly owned business and the authorities, the tax-man and and the football league will simply say "gadzooks, foiled again" then I don't see the point.

[LeverEnd]

Why no comments on my last post on this subject? Are the financial considerations completely beyond the comprehension of contributors to this and other websites? Is that why some cling to simplistic, uninformed and ill considered assumptions?

I think you've just bored evryone into submission

[Worthy4England]

Why no comments on my last post on this subject? Are the financial considerations completely beyond the comprehension of contributors to this and other websites? Is that why some cling to simplistic, uninformed and ill considered assumptions?

I suspect no one could be arsed. It would have only been criticized as too simplistic if it differed from your opinion. Fildraw and Moonshift are not the same legal entity. One owns the Club the other lends it money. How poor is it that folks can bandy about such inaccurate statements on the interweb? Is it beyond their comprehension?

[Gudnib]

Why no comments on my last post on this subject? Are the financial considerations completely beyond the comprehension of contributors to this and other websites? Is that why some cling to simplistic, uninformed and ill considered assumptions?

I suspect no one could be arsed. It would have only been criticized as too simplistic if it differed from your opinion. Fildraw and Moonshift are not the same legal entity. One owns the Club the other lends it money. How poor is it that folks can bandy about such inaccurate statements on the interweb? Is it beyond their comprehension?

I appreciate its an easy mistake to make but may I just refer you to notes 31 and 32 of the last filed accounts of Burnden Leisure which show that the ownership and the loans have both been with Fildraw since 31December 2014.

[Gudnib]

Why no comments on my last post on this subject? Are the financial considerations completely beyond the comprehension of contributors to this and other websites? Is that why some cling to simplistic, uninformed and ill considered assumptions?

Well, I can't speak for anyone else but I found it pointless to respond to this ...

So, if assets were secured to Moonshift (now Fildraw), wouldn't Fildraw be at the front of the payout queue if asset sales were forced? i.e. ahead of preferred creditors like HMRC, employees etc.

... without absolute incredulity.

If you seriously think you can avoid your debt by transferring it to another wholly owned business and the authorities, the tax-man and and the football league will simply say "gadzooks, foiled again" then I don't see the point.

It might be boring but bear with me.

If you own a house that is mortgaged to a lender and you get into financial difficulties (no fault of your own of course) and you can't pay your credit card bill, your council tax or your income tax you may be forced into formal insolvency. You have to sell your house but there's not enough to pay everyone off, so who gets paid first?

The answer, by the way, is not the taxman.

It may be that Moonshift lent the money on an entirely unsecured basis but who would make that assumption?.

[bobo the clown]

^^^ You know that accusation of condescending arrogance which you seem to object to ..... ?

Can I presume you were not a finance professional ?

You ACTUALLY think that ED could shift his debts to another Company also owned by himself and miraculously avoid any impact ? The minds of conspiracy theorists are scary places. But it's a good time for you guys ... plenty of tin foil around for making those hats.