SUFC: The Future SUFC up for sale

[Userorange]

It’s far from ideal, but if there’s ultimately no other way to get the club out of Ron’s hands right now then so be it. Kimura will need to be very sure that whatever deal is signed is we’ll thought through and legally water tight. I’d

It’s legally water tight that you have to pay HMRC the VAT you collect on their behalf.

 

[OldBlueLady]

You know more than myself then, could you give me an example of what Ron Martin has built ? Genuine question in his proven capacity as property developer

I'm pretty sure he built (or his companies did) several pockets in Benfleet - Martins Mews and Elounda Court (notice the names?) for instance. Unfortunately, the records on Castle Point's planning portal don't go back far enough. Also pretty sure that he's involved in development off the Chase/Wensley Road. He was spotted in the chamber at a recent planning debate.

 

[Wise Head]

If Kimura buy the club only in the next week or so I doubt any agreement will ever be reached with Ron on the potential new stadium at FF as he will have a stronger hand and be under less pressure to do a deal. Be prepared for the club to be booted out at the end of the agreed lease on RH and the club have to play out of the area until an alternative stadium site is identified and then built. Just my humble opinion.

 

[annie1954]

If Ron has any interest in SUFC, Roots Hall, Fossets Stadium going forward, it scares me

I think unless there is a clear cut take over many fans will still boycott home games his name must have no connection with Southend United he must be gone forever , just hope it’s very soon the longer he’s around the more damage he’s doing to our club

 

[fbm]

Please feel free fbm a lot of people will appreciate your efforts

Ok, well, as you've asked nicely and your post has been liked by 8 people...

And with apologies to anyone who knows this already, as I said before, this is really not intended to be patronising or condescending, and it doesn't really matter what SHOULD be the situation, this actually IS the situation. Legally.

It really will help I think if there is more understanding of what is and isn't Ron's debt, and the difference between individuals and limited companies.

What is Ron's debt?

Probably nothing. Unless there are any personal guarantees he's given, I would imagine the vast majority of debt is either secured by land or owed to Ron himself, as he is the largest creditor. This means that most of the money owed by the club is owed to him. If he wants to, he can put the club into administration, the administrators (chosen by Ron) will sell the club and all the monies received will be divided out pro rata between the creditors (after payment of football related debts which I think have to be settled in full.

What about Southend United Ltd?

This is the club that facing the winding up petition and, as I understand it, holds the membership of the NL and all the players registrations. It receives all the income (TV money, prize money, sponsorship, ticket sales etc.) and also has to pay all the expenses (rent, rates, utilities, wages, taxes, legal and accountants fees etc.). The assets and income of the company must always equal or exceed the liabilities and expenses otherwise the company is insolvent. That's not allowed and the company is not allowed to trade if that happens.

Because it is a limited company, all liability is limited. That means that if the company dies, the shareholders don't die with it. I'll give an example.

If someone is, say, a freelancer, they probably don't carry any stock and don't need separate premises to work from as they are essentially selling their time and expertise. They can work from home or on the premises of the clients they freelance for. Most freelancers will be sole traders. This means that they are personally responsible for all tax on monies earned through their freelance work. If they make a mistake in their work that isn't covered by either their own insurance or their client's insurance, they can be personally sued and they could lose absolutely everything, house, car, the lot. However, the risks of that happening to a freelancer are quite low and setting up a company is a bit of a faff, it's harder in theory to get money out as it can only be done via PAYE or dividends, all of which are taxed at source, which makes it far less attractive and much more admin-heavy.

Once a business carries stock or owns premises etc. it is probably more advisable for the to be a limited company. This means if anything goes wrong, the company takes the hit and the director/shareholder is protected. They can't be personally pursued for any company debts and they are free to start something else.

That doesn't sound very fair!

Well, I can see why that may be perceived to be the case, but if it wasn't then no-one would ever start anything up because it would be too risky. Plus there would be no businesses that would be able to employ people as no-one would set anything up in the first place, knowing that one day they would potentially lose everything by being made personally liable for any debts.

So when people say "Ron should pay the wages" they aren't his to pay; it's the club's responsibility. And if the club has no money (or a bank account is frozen) then they literally can't pay them. And if by paying them they would potentially be trading insolvently, the such action could be the death knell of the club.

This is why the issue of the season tickets was so important, as it is the only income the club gets in the summer. It could well be that paying the wages for everyone in full meant the club was trading insolvently, which means no more club.

So why doesn't Ron put more in?

He put over £2m in at the end of Feb. I expect this was calculated to see the club through to the summer but fell short, possibly because there were fewer season ticket sales than anticipated. There will be a limit as to how much of his own personal wealth or family assets he will be prepared to risk losing. I don't expect, when he started all this, he thought we would still be at this point 25 years on.

Why don't the other directors put money in?

It depends whether or not they are shareholders. If they are just directors, they have no obligation to do anything at all as they are not financially interested in the club unless they choose to lend it money. That money is then held in a Director's Loan account and can be withdrawn, tax free, at any time (as long as the money is there to do so). Even as shareholders, there is no obligation to do anything unless the company asks them to (note - the company; not Ron) and even then I'm not 100% sure they are bound to do it. Some of the directors will have already put money in, of course.

Let me quote a personal - and very simple - example. My mother died a couple of years ago and I inherited her estate. Part of that was a flat and I put this into a company. The reason for doing this was because the flat was was rented out, and I am a 40% taxpayer, so any rent would be subject to 40% tax. It cost me a few grand in stamp duty to put it into the company and the admin fees of setting up and running it, but the upshot is that there is no Capital Gains Tax (28%), if the company sells the flat the tax is Corporation Tax that is payable (24%) and any income (less expenses) is also taxed at 24%>

Meanwhile, I have "sold" the flat to the company and the amount of the sale sits in my loan account. So I can take that out, tax free, at any time (obviously I can't as the flat would have to be sold to do it, but you get the point). But it does mean that if I want to draw some money, I can take it from the rent, as opposed to registering for PAYE and drawing a salary (taxed at source at 40%) or taking a dividend (can't remember the tax rate on this).

If I hadn't done this, I would have a flat that I could personally sell, but which was generating income payable at a much higher tax rate, plus there would be higher taxes to pay on sale.

This is a really simple example as I say - but extrapolate that up to the SUFC model and Ron's myriad of companies.

There will be company after company that will have been involved to generate the money used to keep SUFC solvent, probably through a series of loans via Ron's directors loan account but those assets must have come from somewhere. Similarly, as he is the landlord of the ground he is perfectly entitled to charge rent (which he is; he's just not collecting it).

When he therefore says that he has lost X million, he probably has; plus the opportunity cost of investing that money in something else. I'll bet he wishes he'd never ever started.

Hope this helps... I also hope this is all done soon and we still have a club to support on Wednesday.

So don't think that new owners Kimura (or whoever) are going to be doing this for the love of the club or the love of football; they have investors who will want a return.

 

[C'mon you Shrimpers]

You know more than myself then, could you give me an example of what Ron Martin has built ? Genuine question in his proven capacity as property developer

I think many have pointed out the university/college scheme which sounded like a dry run for Fossets. In the end Ron might not have built the complex but buying and selling the land is part of property development. I remember years ago playing on the Southend Tec ground off Lifstan Way. It's now housing as is the new college (60s) site near the Civic Centre.

 

[TUMBO]

I don't understand fans that are happy with FF to be dealt with "down the line"

Based on the history of this nut job currently in charge, do you really believe he will play ball with Kimura later?

The pressure on Ron at the moment is Wednesdays court date. If that is resolved, there is no need for Ron to budge at all

I genuinely think Ron will back down, but this will be run to the wire. As in on the day of the courts, about a minute before they walk in before the judge.


I think he's playing a dangerous game and bluffing. He has capital, but no cash. as in he owns land, Roots Hall, Training Ground and Fossetts farm are in his name. But you can't pay your mortgage on owning land. You need cash to do it.

Ron is such a slimy character and I'm sick of him. I want him completely gone from the club.

From what has been reported on these pages

- Offer accepted of £10 Mill
- Due dilligence uncovers £1.5 million of undeclared debt
- Kimura likely reduced offer to £8.5 mill in light of this new debt (How anyone thinks this is unreasonable is beyond me)
- Ron stating the fee was agreed at £10 Mill and you're buying the club and any debts associated to it
- Ron continues not to pay staff for four months

I have honestly been mentally undone by this sale process.

 

[kentblues]

The new stadium is fundamental to the future business plan for the club. Its viability, ability to compete. Whether the 16k or 21k stadium is built is also by extension key to that plan? So I can’t see how, at the least, there won’t be some agreement in place about what will be built in outline terms?

If the club is initially sold without FF stadium by Wed then yes the DD and completion will have taken 4.5 weeks. But could it have been say a week less and avoided the pain on the playing side if this was the approach from the beginning? The hope was clearly to have the FF piece done as well and it’s not a surprise that this takes longer. I guess we have to see what happens. But I would be surprised if the buyer has no agreement in place at all re FF that provides “comfort”…

 

[C'mon you Shrimpers]

However, the 16k stadium isn't what is best for the club.

I would prefer 21000 but what is the problem with16000 and a bit. It would allow the club to make more money inside the stadium. We'd be doing well to fill 16000 to be brutally honest and I'm a bit of an optimist.

 

[Spaceman Spiff]

Yes . This very complex deal would be so much easier if they were using their own money. Investors will be requiring a very high rate of return due to the very high risk they are taking. I don't know but would think the funds will come in via the Cayman Islands .

Mate, stop stirring.

It’s funny, you’re so like a ghost from the past on here.

The above post is a load of supposition and a feeble attempt to make Kimura look somehow dodgy and skint. You don’t know where the funds are coming from, or on what basis. Most football takeovers aren’t paid for on a debit card. You don’t know what level of risk there will be in whatever is agreed. You don’t know the funds are in the Caymans.

What are you trying to achieve by posting that nonsense?

 

[Mr Browns Ghost]

I'm not sure how true that is. My understanding is he hasn't actually developed anything. He's sold on land where he's gained planning permission, but (I'm led to believe) he's never actually built anything.

He built many years ago a small mews in thundersley way like a builder basically a few residential homes

 

[Mr Browns Ghost]

Mate, stop stirring.

It’s funny, you’re so like a ghost from the past on here.

The above post is a load of supposition and a feeble attempt to make Kimura look somehow dodgy and skint. You don’t know where the funds are coming from, or on what basis. Most football takeovers aren’t paid for on a debit card. You don’t know what level of risk there will be in whatever is agreed. You don’t know the funds are in the Caymans.

What are you trying to achieve by posting that nonsense?

He Wolfy

 

[kentblues]

If Kimura buy the club only in the next week or so I doubt any agreement will ever be reached with Ron on the potential new stadium at FF as he will have a stronger hand and be under less pressure to do a deal. Be prepared for the club to be booted out at the end of the agreed lease on RH and the club have to play out of the area until an alternative stadium site is identified and then built. Just my humble opinion.

Ron can only build on RH once the club are in FF stadium. I doubt Kimura would agree a lease to play at RH until they move in to FF (the basics surely). I further would not be surprised if that is rent free on the basis Kimura will maintain RH.
Likewise if agreement can’t be reached on FF, and Kimura say we will find somewhere else, then that would potentially leave Ron will an empty new stadium. So that threat is much a threat to Ron.
So I think they need each other. But can’t believe either side wouldn’t at least want agreement in principle?

 

[bazzashrimper]

I would prefer 21000 but what is the problem with16000 and a bit. It would allow the club to make more money inside the stadium. We'd be doing well to fill 16000 to be brutally honest and I'm a bit of an optimist.

I think the flats - permission to use the stadium for other things will be harder. That’s part of the model for kimura.

 

[kentblues]

I think unless there is a clear cut take over many fans will still boycott home games his name must have no connection with Southend United he must be gone forever , just hope it’s very soon the longer he’s around the more damage he’s doing to our club

So punish Kimura? For saving the club? Yes that makes sense? Ron won’t care- after all it’s no longer his club?

 

[Smiffy]

These are the two most likely outcomes ahead of Wednesday as I see it. There are others of course, but I don't even think they are on the table.


1. A sale is agreed (Even if that's club only initially) all petition debt (rumoured to be seven figures) is discharged, staff wages are brought up to date meaning NL happy, so Embargo is removed. We're on our way etc.

2. A sale is NOT agreed. An adjournment is granted by the judge on the basis a sale is close, all/part petition debt remains, staff wages are not brought up to date meaning NL unhappy, so Embargo remains. Out of contract players probably leave etc.


The concerning thing for me is, I just can't call it either way. I'd take option 1 over 2 through gritted teeth of course. But I have a horrible feeling option 2 is a very real possibility right now. Which would be a far worse outcome.

 

[defender05]

I see a few people mentioning possible building a ground somewhere else if an agreement can't be made but where is there any space big enough of even somewhere you could knock a building down and replace it.

 

[C'mon you Shrimpers]

Hopefully option 1. I'm not sure how much more I can take. It's so important for Kev etc to start doing what they do to start the season with a chance. Further delay means from a football point of view we're stymied.

 

[LucindaC]

Just to throw something into the mix.

Maybe another way things could progress - Kimura agree to pay off the immediate debts due to keep the club afloat without buying it, whilst negotiations over the sale of the club and FF continue. Less financial risk to Kimura than buying the club and then failing to reach agreement on FF.

 

[8]

I see a few people mentioning possible building a ground somewhere else if an agreement can't be made but where is there any space big enough of even somewhere you could knock a building down and replace it.

A127/A130 junction. Far Far better than Fossets.