Pre-Match Thread HMRC v SUFC - FINAL hearing on 1st March. DISMISSED

[sufc4life21]

The choice for admin is not Ron's I do not believe... unless he's allowed to call for it as the club's largest debtor through his companies?

Fair play. I thought the owner of a football club can put club into administration. I'm sure that's what happened with derby couple years back where the owner put the club into administration when they were in mess

 

[hlane17]

Fair play. I thought the owner of a football club can put club into administration. I'm sure that's what happened with derby couple years back where the owner put the club into administration when they were in mess

I think because of the winding up petition, there's a more complicated process that involves the court deciding it as the best course of action.

I think @kentblues explained it well further back in this thread.

 

[kentblues]

Agree with all the good points you're making KB. Can I just add that the revised application is a lengthy and complicated process which requires a lot of professional input and those involved will require payment. Maybe this could also account for (at least some of) the delay ?

Of course we don’t know (again…). Would the development not fund rather than Ron? Is Ron committed to providing the land to the development with full planning approval so out of his (companies pocket- presumably RHL) - we don’t know for certain (or at least I don’t). I suspect RHL - not only are RHL’s accounts fully audited and up to date the parent’s Elounda LLP’s are as well. So a bit more revealing. As at July 22 the latter had cash at £700k. Won’t have by now no doubt but as this group holds all the relevant land & assets (stadium) I would imagine it would fund planning cost pre full approvals? Post approval costs then falling to the developers?

 

[kentblues]

Administration does look real possibility...... from ron perspective he can put the club into administration and still be able to build his empire without the worry of financing a football club and pay off hmrc. I vote for administration.

The reason he won’t want this (beyond just pride/being seen to fail and losing control) is actually once the new stadium in place the club will probably be worth meaningfully more than it owes (with the right access to the stadium and earning potential someone will probably invest a few million…my guess/his hope?). In admin he will run a real risk of getting nothing.

 

[kentblues]

Govt website suggests TTP's can be adjusted if needed, but considering HMRC went for court action instead of a renegotiated TTP suggests we might be past that. I don't see anything that says you can't agree a new TTP after already having one.

Well if you can possibly say pay half and negotiate payment of the rest it does kind of answer the question. HMRC will still want the other half and so there has to be some sort of commitment to a payment schedule for that- they won’t just say pay it when you’ve got it…?

 

[Tilly Lover]

The reason he won’t want this (beyond just pride/being seen to fail and losing control) is actually once the new stadium in place the club will probably be worth meaningfully more than it owes (with the right access to the stadium and earning potential someone will probably invest a few million…my guess/his hope?). In admin he will run a real risk of getting nothing.

If the Court agrees that the football club goes into administration, my understanding is that the Administrator will have to establish whether the business is a going concern. It would be expected that they will decide it is not then will establish creditors and amount owed. It will then dispose of assets (very little) and repay creditors the very small proportion of what they are owed.

From the last accounts, the biggest creditor is Martin’s group of Companies so once the Administrator decides the very small proportion of money to be repaid to creditors, Martin’s group will have to write off large sums owed by the football club as bad debts. This is circa £16M from memory so writing most of this off will cause those Companies to fail and the House of Cards collapses?

Is this why the football club has never been into administration and is not advantageous to Martin now? Or am I missing something?

 

[sufc4life21]

The reason he won’t want this (beyond just pride/being seen to fail and losing control) is actually once the new stadium in place the club will probably be worth meaningfully more than it owes (with the right access to the stadium and earning potential someone will probably invest a few million…my guess/his hope?). In admin he will run a real risk of getting nothing.

I see what your saying and I probably would agree with you if situation was 10/20 years back but given his age now is it really worth the stress and hassle to keep running a club which makes huge losses yearly and having issues paying players/staff and HMRC, didn't Tom say sufc make 2 million loss a year? That's unsustainable for league 2/national league club. Surely from his perspective now would be to put the club into admin which allows him free pass in regards to not paying HMRC, with the hope a new buyer is found. He still going to make huge money anyway regardless if the club is alive or dead from his property empire.

 

[Tampa Blue]

He still going to make huge money anyway regardless if the club is alive or dead from his property empire.

The cynic in me suspects that this was his intention all along

 

[Yer Blues]

The cynic in me suspects that this was his intention all along

Yeah. And he just waited 23 years for his plan to come to fruition.

****ing ridiculous.

 

[sufc4life21]

The cynic in me suspects that this was his intention all along

If you analyse what's happened in the last 3/4 years to sufc does paint a club on its way out as such. HMRC issues, accounts not filed, players/staff not paid, big debts to crediters, double relegation, no full planning for new stadium. Does feel like the end is near. He wins regardless what happens to us. Unfortunately we have well and truly been run into the ground.

 

[kentblues]

If the Court agrees that the football club goes into administration, my understanding is that the Administrator will have to establish whether the business is a going concern. It would be expected that they will decide it is not then will establish creditors and amount owed. It will then dispose of assets (very little) and repay creditors the very small proportion of what they are owed.

From the last accounts, the biggest creditor is Martin’s group of Companies so once the Administrator decides the very small proportion of money to be repaid to creditors, Martin’s group will have to write off large sums owed by the football club as bad debts. This is circa £16M from memory so writing most of this off will cause those Companies to fail and the House of Cards collapses?

Is this why the football club has never been into administration and is not advantageous to Martin now? Or am I missing something?

You are missing something
First the best value the administrator could get would not be by selling the non-existent assets for nothing but by selling the club. The club has a value to someone far greater than the value of its non existent assets.
Second the concept of house of cards is not one that applies. Particularly because all the assets (land at RH & FF and RH stadium are in RHL an entirely separate legal entity that is not subject to any striking off or winding up petitions).
Finally, admin means Ron won’t get to keep control over the club, and lose out on the sale of the a club at the optimal time when the stadium is built offering maximum return.

 

[Evening Echo]

SOUTHEND United supporters will again be protesting against Ron Martin’s running of the club today.

Read more on this story


Help with Echo links

 

[kentblues]

I see what your saying and I probably would agree with you if situation was 10/20 years back but given his age now is it really worth the stress and hassle to keep running a club which makes huge losses yearly and having issues paying players/staff and HMRC, didn't Tom say sufc make 2 million loss a year? That's unsustainable for league 2/national league club. Surely from his perspective now would be to put the club into admin which allows him free pass in regards to not paying HMRC, with the hope a new buyer is found. He still going to make huge money anyway regardless if the club is alive or dead from his property empire.

No I don’t think so. Apart from the fact he is clearly leveraging everything he can not to get wound up incl. getting MPs onside etc etc, if he does get past 1st March and then either the bridging loan or funds from the development starting this summer come in he will keep the show on the road much more comfortably until that sale. He’s been going through maximum pain up to this point - in theory his life gets easier after March 1 (or at least I think way more likely that’s the plan).
Of course he may be dreaming- but he’s been doing that for most of the 20 years…

 

[Tilly Lover]

You are missing something
First the best value the administrator could get would not be by selling the non-existent assets for nothing but by selling the club. The club has a value to someone far greater than the value of its non existent assets.
Second the concept of house of cards is not one that applies. Particularly because all the assets (land at RH & FF and RH stadium are in RHL an entirely separate legal entity that is not subject to any striking off or winding up petitions).
Finally, admin means Ron won’t get to keep control over the club, and lose out on the sale of the a club at the optimal time when the stadium is built offering maximum return.

Thanks for helping but still not clear, my point is that when the football club debts are written off either through administration or winding up, the creditors will have to recognise the bad debt on their accounts. As it is Martin’s companies that are the main creditors then it is their balance sheet that will take the hit.

Your first point - the buyer of the club either has to take on the debts (which I assume no one would) or the Administrator tells the creditors they are getting next to nothing so the creditors will suffer the loss.

The second point is mute as I am not referring to any legal issues against other Companies, just that they will have to write off huge sums as bad debt.

Agree on the 3rd point.

Still does not seem advantageous to Martin to go into administration.

 

[fbm]

Thanks for helping but still not clear, my point is that when the football club debts are written off either through administration or winding up, the creditors will have to recognise the bad debt on their accounts. As it is Martin’s companies that are the main creditors then it is their balance sheet that will take the hit.

Your first point - the buyer of the club either has to take on the debts (which I assume no one would) or the Administrator tells the creditors they are getting next to nothing so the creditors will suffer the loss.

The second point is mute as I am not referring to any legal issues against other Companies, just that they will have to write off huge sums as bad debt.

Agree on the 3rd point.

Still does not seem advantageous to Martin to go into administration.

There are slightly different rules for football clubs who go into administration I believe inasmuch as all football debts are protected and have to be paid in full. From Wikipedia -

"For a football club in administration, the "football creditors rule" requires football-related debts such as wages owed to players and staff, and transfer fees owed to other clubs to be paid first."

 

[davewebbsbrain]

I see the Echo fails to mention the fans outside Ron's House. Feel sorry for his wife, grand kids etc who may have to deal with this group.

Do all the protesting you want outside the ground but leave his family alone

 

[The Big Dady]

The Echo do at the bottom of article

"Fans also protested outside Martin’s house on Saturday morning."

 

[Swiss Tony]

I see the Echo fails to mention the fans outside Ron's House. Feel sorry for his wife, grand kids etc who may have to deal with this group.

Do all the protesting you want outside the ground but leave his family alone

They do D right at the end.

 

[davewebbsbrain]

The Echo do at the bottom of article

"Fans also protested outside Martin’s house on Saturday morning."

I missed that, bit of an after thought. Was bored by then anyway

 

[Tilly Lover]

There are slightly different rules for football clubs who go into administration I believe inasmuch as all football debts are protected and have to be paid in full. From Wikipedia -

"For a football club in administration, the "football creditors rule" requires football-related debts such as wages owed to players and staff, and transfer fees owed to other clubs to be paid first."

So if the football club is in administration any buyer has to pay these debts but will be fairly small in the big picture.

Still does not explain why Martin would put the football club into administration as other Companies he owns will have to recognise the huge bad debts.