Embargos, HMRC Payment defaults, non payment of wages, the usual under Dai Wrongge

[WestYorksRoyal]

I know I’m being naive but I still can’t believe there isn’t a better way, than punishing tens of thousands of people, over the actions or inactions of 1/2 bellends.

How many of those thousands of people are impatient for success? Constantly demanding that the owner spends money on new players, changing the management team because the results aren't good enough.

Of all the clubs in the UK you could level this at RFC would be low on the list. Our fan base are very passive.

Disquiet in the late SJM years was definitely a minority. I think most of us knew how good we had it for a club of our size.

[From Despair To Where?]

There were couple on here who very very vocal to about SJM not splashing the cash. Finally enough they are now the more vocal ones most criticising the EFL now.

[CountryRoyal]

I know I’m being naive but I still can’t believe there isn’t a better way, than punishing tens of thousands of people, over the actions or inactions of 1/2 bellends.

How many of those thousands of people are impatient for success? Constantly demanding that the owner spends money on new players, changing the management team because the results aren't good enough.

I’m also referring to the club staff who risk losing their jobs because of said 1/2 bellends.

[maffff]

Thanks STAR, great decision to engage with the FL over this debacle. Out of interest is there anyone within STAR who has a legal background who could advise if there is anything that business/club shareholders could do to try and compel the owner to put the club into administration rather than just have it carry on limping from one farce to another while the owner seemingly doesn't give a Castlemaine 4X?

I suspect there isn't but just want to know all the obvious options to get things sorted have been/are being explored.

We do have access to expertise thankfully, we are very lucky in that regard.

A decision to go into administration is not one to be taken lightly and is really an option of last resort.

You're likely looking at £3-4m of costs if an administrator would take us on. Debts are predominantly to the owner and HMRC, minority non-footballing creditors would be hugely impacted which has knock on effects into the community.

Subsidiary companies, RFC Bearwood Limited, Reading Women's Football Club and the Reading FC Community Trust would likely default into admin, also.

The only likely route for an administrator to take us on would be through keeping the club afloat via the sale of land at Bearwood (we use approx 10% of the 120 acres).

The owner remains the owner until the administration process is over and it's unlikely to be quick, straightforward and painless, not even considering the points deduction.

[WestYorksRoyal]

Thanks STAR, great decision to engage with the FL over this debacle. Out of interest is there anyone within STAR who has a legal background who could advise if there is anything that business/club shareholders could do to try and compel the owner to put the club into administration rather than just have it carry on limping from one farce to another while the owner seemingly doesn't give a Castlemaine 4X?

I suspect there isn't but just want to know all the obvious options to get things sorted have been/are being explored.

We do have access to expertise thankfully, we are very lucky in that regard.

A decision to go into administration is not one to be taken lightly and is really an option of last resort.

You're likely looking at £3-4m of costs if an administrator would take us on. Debts are predominantly to the owner and HMRC, minority non-footballing creditors would be hugely impacted which has knock on effects into the community.

Subsidiary companies, RFC Bearwood Limited, Reading Women's Football Club and the Reading FC Community Trust would likely default into admin, also.

The only likely route for an administrator to take us on would be through keeping the club afloat via the sale of land at Bearwood (we use approx 10% of the 120 acres).

The owner remains the owner until the administration process is over and it's unlikely to be quick, straightforward and painless, not even considering the points deduction.

Helpful context. Do administrators have the authority to accept offers to buy the club? From what I can see, the biggest barrier to resolving this situation is Dai's asking price. Could administration take the ultimate decision out of his hands?

[Harpers So Solid Crew]

I believe that the EFL will relegate us, and sadly possible rightly so.

This team are just too poor, what did the owners spend all that money on?

[Sutekh]

I believe that the EFL will relegate us, and sadly possible rightly so.

This team are just too poor, what did the owners spend all that money on?

God knows, it definitely was not on the manager's position.

[maffff]

Thanks STAR, great decision to engage with the FL over this debacle. Out of interest is there anyone within STAR who has a legal background who could advise if there is anything that business/club shareholders could do to try and compel the owner to put the club into administration rather than just have it carry on limping from one farce to another while the owner seemingly doesn't give a Castlemaine 4X?

I suspect there isn't but just want to know all the obvious options to get things sorted have been/are being explored.

We do have access to expertise thankfully, we are very lucky in that regard.

A decision to go into administration is not one to be taken lightly and is really an option of last resort.

You're likely looking at £3-4m of costs if an administrator would take us on. Debts are predominantly to the owner and HMRC, minority non-footballing creditors would be hugely impacted which has knock on effects into the community.

Subsidiary companies, RFC Bearwood Limited, Reading Women's Football Club and the Reading FC Community Trust would likely default into admin, also.

The only likely route for an administrator to take us on would be through keeping the club afloat via the sale of land at Bearwood (we use approx 10% of the 120 acres).

The owner remains the owner until the administration process is over and it's unlikely to be quick, straightforward and painless, not even considering the points deduction.

Helpful context. Do administrators have the authority to accept offers to buy the club? From what I can see, the biggest barrier to resolving this situation is Dai's asking price. Could administration take the ultimate decision out of his hands?

Sort of. Administrators have the authority to accept offers to buy the club, as they are in charge of the day-to-day running of the club and have the responsibility to find a suitable buyer or reach a settlement with the creditors.

However, the administrators would need to engage with Dai, other creditors, and the Football League before finalising a sale.

The asking price of Dai (particularly given how much of the debt is to him), may be one of the factors that affects the sale process.

Therefore, administration does not necessarily take the ultimate decision out of Dai's hands, but it may put some pressure on him to lower his expectations and cooperate with the administrators.

[Forbury Lion]

I'd say it's very hard to administer based upon member card holders and sale history. It would need to be STAR and each club's equivalent. These would need to be strengthened and have their base broadened; advertise their power in safeguarding the club widely so fans know to join.

New legislation would need to be passed through Parliament. Currently, the proposal is almost certainly illegal. And the penalties for administration should remain. It should hurt for fans to place their own club into administration. The message for owners would be that if you fcuk things up so badly that they're willing to do it, you can have no complaints with the consequences. I think we’re at the point where we could get a yes vote if we had the power.

If the new owners want to implement this change to the clubs constitution then they can, However that's not going to happen unless someone wants to give the club away or if the supporters trust buy and run the club then sell the franchise on licence to someone who wants to be caretaker, invest and make money from running it.

If an owner would be willing to do it, they wouldn’t need to do it, they'd just make the decision themselves.

I sincerely doubt a club consitution would be legally binding in that way. You'd be putting the administration of the vote in the hands of the people the fans want to oust, and what recourse do you have if they just ignore the request, or the vote?

What triggers when its called?

Anything can be overturned.
The original owners or Rolls Royce - Henry Royce, I presume, put in the company constitution that it should always be British owned. That was then overturned by the courts/government/whoever when BMW flashed the cash.

[Royalwaster]

HMRC debt has not yet been paid.

[Hound]

HMRC debt has been paid.

Earnshaw thinks different from what I saw

[The Royal Forester]

Dave Kitson said on BBCRB post match that the Tax bill has been paid, Didn't say how he knows though.

[Hound]

Dave Kitson said on BBCRB post match that the Tax bill has been paid, Didn't say how he knows though.

I think it was some sort of joke/stray comment from tbe sound of it. Lots of other sources saying it hasn’t

[Sutekh]

Dave Kitson said on BBCRB post match that the Tax bill has been paid, Didn't say how he knows though.

Confusion reigns, might have meant the wage bill rather than HMRC.

[Franchise FC]

Thanks STAR, great decision to engage with the FL over this debacle. Out of interest is there anyone within STAR who has a legal background who could advise if there is anything that business/club shareholders could do to try and compel the owner to put the club into administration rather than just have it carry on limping from one farce to another while the owner seemingly doesn't give a Castlemaine 4X?

I suspect there isn't but just want to know all the obvious options to get things sorted have been/are being explored.

We do have access to expertise thankfully, we are very lucky in that regard.

A decision to go into administration is not one to be taken lightly and is really an option of last resort.

You're likely looking at £3-4m of costs if an administrator would take us on. Debts are predominantly to the owner and HMRC, minority non-footballing creditors would be hugely impacted which has knock on effects into the community.

Subsidiary companies, RFC Bearwood Limited, Reading Women's Football Club and the Reading FC Community Trust would likely default into admin, also.

The only likely route for an administrator to take us on would be through keeping the club afloat via the sale of land at Bearwood (we use approx 10% of the 120 acres).

The owner remains the owner until the administration process is over and it's unlikely to be quick, straightforward and painless, not even considering the points deduction.

Helpful context. Do administrators have the authority to accept offers to buy the club? From what I can see, the biggest barrier to resolving this situation is Dai's asking price. Could administration take the ultimate decision out of his hands?

Once an administrator is appointed the club is theirs to fulfil their obligations.
Their principal regard is to maximise the return to the secured creditors and everyone else is secondary.
They would only sell off a piece of any business if that fits within that requirement and wouldn’t do so ‘simply to keep a business afloat’
Sadly, I know this from particularly bitter experience

[Sutekh]

So come on Mr Dai please sell up for a reasonable amount.

[WestYorksRoyal]

We do have access to expertise thankfully, we are very lucky in that regard.

A decision to go into administration is not one to be taken lightly and is really an option of last resort.

You're likely looking at £3-4m of costs if an administrator would take us on. Debts are predominantly to the owner and HMRC, minority non-footballing creditors would be hugely impacted which has knock on effects into the community.

Subsidiary companies, RFC Bearwood Limited, Reading Women's Football Club and the Reading FC Community Trust would likely default into admin, also.

The only likely route for an administrator to take us on would be through keeping the club afloat via the sale of land at Bearwood (we use approx 10% of the 120 acres).

The owner remains the owner until the administration process is over and it's unlikely to be quick, straightforward and painless, not even considering the points deduction.

Helpful context. Do administrators have the authority to accept offers to buy the club? From what I can see, the biggest barrier to resolving this situation is Dai's asking price. Could administration take the ultimate decision out of his hands?

Once an administrator is appointed the club is theirs to fulfil their obligations.
Their principal regard is to maximise the return to the secured creditors and everyone else is secondary.
They would only sell off a piece of any business if that fits within that requirement and wouldn’t do so ‘simply to keep a business afloat’
Sadly, I know this from particularly bitter experience

But presumably if the only way to get the creditors their money was to accept a relatively low offer on the proviso that the new owners pay off secured creditors in full, they would be able to do this? I think a lot of football financial sagas have ended this way?

[Franchise FC]

Helpful context. Do administrators have the authority to accept offers to buy the club? From what I can see, the biggest barrier to resolving this situation is Dai's asking price. Could administration take the ultimate decision out of his hands?

Once an administrator is appointed the club is theirs to fulfil their obligations.
Their principal regard is to maximise the return to the secured creditors and everyone else is secondary.
They would only sell off a piece of any business if that fits within that requirement and wouldn’t do so ‘simply to keep a business afloat’
Sadly, I know this from particularly bitter experience

But presumably if the only way to get the creditors their money was to accept a relatively low offer on the proviso that the new owners pay off secured creditors in full, they would be able to do this? I think a lot of football financial sagas have ended this way?

My point being that, once in administration, Dai would have no control and wouldn’t be consulted
The deal arranged will then be communicated to him as fait accomplis, not ‘do you like it’

[Snowflake Royal]

Once an administrator is appointed the club is theirs to fulfil their obligations.
Their principal regard is to maximise the return to the secured creditors and everyone else is secondary.
They would only sell off a piece of any business if that fits within that requirement and wouldn’t do so ‘simply to keep a business afloat’
Sadly, I know this from particularly bitter experience

But presumably if the only way to get the creditors their money was to accept a relatively low offer on the proviso that the new owners pay off secured creditors in full, they would be able to do this? I think a lot of football financial sagas have ended this way?

My point being that, once in administration, Dai would have no control and wouldn’t be consulted
The deal arranged will then be communicated to him as fait accomplis, not ‘do you like it’

Which is why he won’t put us in administration. Especially given any deal the Administrators accept will see them take their cut first.

[3points]

No. Although HMRC cannot put a business or club into administration, the rules that apply automatically install HMRC as the preferred creditor should a business go into administration. If indeed HMRC are owed anything.

As I understand it creditors go for liquidation to get their money, administration is some attempt by directors to protect the company from that to carry on in some form. So HMRC or any creditor can get us liquidated and the reaction from that should be for Dai pay the creditor or to put us into administration. Liquidation or administration he loses money but less so in administration as there is a club to sell, but should be not choose administration the club is gone and (a phoenix club) would have to start again at the bottom.

Well, sort of. If a club or business goes into administration, the administrator who is independent of the directors or creditors, dishes out what money is left to firstly the HMRC, if they are owed, then to other creditors at usually reduced rates, ten pence in the pound for instance, so people owed at least get something.

This isn't quite correct. The administrator (who is formally an officer of the court) has legal obligations to maximise the realisations for the benefit of all creditors. creditors fall into three main categories
1. Secured
2. Preferential
3. Unsecured
Football is a little different and has "football creditors" which, I believe, have to be paid put as well (e.g. money owed to other clubs for transfer fees).

Per above Dai is a secured creditor as he has loans into the club secured by "charges" over the assets of the club (noting the stadium is outside of this security net). Any sold assets are then either deemed to be fixed or floating assets and that makes a difference as to who gets paid first from the distributions from the administrators (note the administrators and their legal advisors get paid their fees before anyone else gets a penny).

Using the above Dai will get the lion's share of any money realised from the sale of the club and its assets. It s my understanding that HMRC also has to be paid in full too (it ranks alongside the football creditors).

Administrators are usually either appointed by the secured creditor (usually a bank or lender) or the directors. In this case Dai is both the secured lender and also a director (along with Pang, his sister, Narin Niruttinanon and Graham Odell). Therefore it is highly unlikely the directors will act against Dai and he'd have a majority with him, Pang and his sister in any board meeting.

It is technically possible for any creditor to petition the courts and ask for an administration order to be made. It is pretty rare and only used in aggressive circumstances when nothing else works. However, it is in the judge's discretion as to whether they agree with the creditor and put the company into administration. In this instance Dai also has the option to pay off the creditor in full meaning they are no longer owed money.

The big problem we will face if we enter administration is how the club will be funded through the period of administration. The administrators will try to reduce costs and align income with payments as best as possible. Everything bar the bare essentials will be cut, including employees and probably the academy). It may be there is an interested party who will help fund the club while it completes due diligence and can execute a transaction (as I think was the case with Derby).

Happy to answer questions as this is my field of work.