pie.warrior wrote:
that's the problem, loads of fans are now thinking we have investors interested in saving the club, when in reality it is more likely no-one wants to pay HMRC the £500k+ they are owed and the offers are to buy the assets of club once the club is liquidated as HMRC want their pound of flesh and will continue the winding up action
Can we kill all the confusion about liquidation?
And about the debts?
Unless someone is feeling VERY benevolant, the debts in their present form are history anyway as far as any new purchaser is concerned. The company has protection from its creditors whilst in administration. No buyer need take on ANY liabilities, other than those of any employees TUPEd across (see why they sacked them all on Monday...?). If a CVA results, the company retains x% of its liabilities and exits administration without proceeding to liquidation.
Liquidation is the LAST stage of the process, one that is commenced only when all other avenues have either been exhausted or what can be sold as any semblance of a going concern has been. AFTER.
The usual outcomes of adminsitration are:
1 - Assets sold to Newco; administrator uses proceeds to pay off himself (if the administration is "unfunded", as ours is) then make distributions to creditors as far as possible and in the statutory order of precedence. When he is discharged, anything left is passed to a liquidator to wind up and make any remaining distributions to creditors. Note AT THE END; or
2 - A Company Voluntary Arrangement (CVA) is proposed and agreed. Under this formal and supervised process, instead of flogging the assets to Newco, the existing company survives, and the creditors agree to accept x pence in the pound. In such cases, once the creditor have agree the CVA the administrator is discharged and the management (old or new) and owners (old or new) continue. If I was putting in a bid for the Bulls, I would be looking at exiting via a CVA if at all possible and affordable (I think HMRC would get sod all through any other route). That way, the same legal entity - and its contracts etc, unless already nullified by insolvency - should survive. Little things like the SL licence and the Odsal lease and the run-off agreement with the council as well as all the player contracts sort of spring to mind? Also the little matter of not necessarily resolving the shareholding problem though!
3 - Liquidation. Either (a) of the husk that is left after the business activity or assets have been sold off, or (b) of the whole lot if no buyer for the going concern has been found and the administrator concludes that continuing the administration is pointless and just incurring extra costs to further reduce what is left for the creditors. In the first case, you are usuallly talking months or years down the line, depending on how long the administrator has funds to be paid; in the second case, in an unfunded administration (like ours) the administrator could set a fairly short deadline beyond which he has to admit the administration has failed and the company must be liquidated.
3b is the situation the Bulls currently face if the administrator does not receive credible bids that provide a better return for the creditors. But once a winding-up order has been granted and a company is in liquidation, there is no way back. the assets are realised for cash ASAP, all the remaining staff are dismissed, and all contracts are nullified. We want to hope it is instead 1 or 2.
