Texas court halts sale of Dippers

[baylorblue]

Had a rag supporting mate ask me "How would you feel if this happened to City?" I had a think about it and then I realized, so what? So we go back to League One? Like we haven't already been there before? We've got nothing to lose, we are already well acquainted with disappointment. Now I can enjoy what we have even more, because if it is gone tomorrow we are back to square one, back to the club I fell in love with in the first place (ok not exactly the same because I only started following City in 2002, but I've spent all of my sporting life supporting the down and out). That's why watching Liverpool's panic is so funny to me. They don't have the ability to deal with crisis with dignity haha.

 

[Damocles]

Had a rag supporting mate ask me "How would you feel if this happened to City?" I had a think about it and then I realized, so what? So we go back to League One? Like we haven't already been there before? We've got nothing to lose, we are already well acquainted with disappointment. Now I can enjoy what we have even more, because if it is gone tomorrow we are back to square one, back to the club I fell in love with in the first place (ok not exactly the same because I only started following City in 2002, but I've spent all of my sporting life supporting the down and out). That's why watching Liverpool's panic is so funny to me. They don't have the ability to deal with crisis with dignity haha.

American?

 

[baylorblue]

Yeah American

 

[Kirkstall Blue]

No one can dispute that Hicks and Gillette have been bad for Liverpool and placed them in debt that has hampered their ability to compete.

However, that said, they are the legal owners of the club and the way that the RBS, Broughton et al are trying to sell the club from under them leaves a sour taste in the mouth.

The reality is that in effect Liverpool 'should' have been placed in admininstration back at the time that RBS agreed to extend the debt for a further period of months using the leverage they had to force H&G to accept the CGSL and thus putting the sale in the hands of Broughton and the other RBS appointed board directors. H&G agreed this as they didn't have much choice BUT they expected the club to be sold at fair value and not £300million which greatly undervalues the clubs worth. If that represented fair value then the Rags are well and truly f*cked as their sale wouldn't even recoup their debts based on that valuation as a benchmark.

Thus H&G are quite within their rights to use every means at their disposal as they are being well and truly shafted and its clear that Broughton has not found a buyer willing to pay fair value. They are being sold as if they are a club already in administration and THIS is the bit that really gets my goat.

Liverpool have known of the impending RBS deadline for payment of the debt, they could have gone a LONG way to settling this debt had they sold the likes of Torres, Reina, Gerrard but they didn't and as it stands they are selling the club at a distressed price to prevent the 9 point penalty and to be honest it stinks.

I hope that H&G are successful in delaying the sale and put the onus on RBS to put them in administration or extend the loan deadline again to H&G who would not then accept a further CGSL which would put H&G back in the driving seat to achieve fair value or start to sell players to pay off the debt.

Don't think they will be able to delay the sale, only make a case for suing the RBS
on the grounds that they conspired to sell the club "cheap" With the help of RBS Liverpool will emerge far stronger as a club than they otherwise would have done, sold at a knock down price, debt paid and they've kept the players, staff and other assets. Your right, it stinks.

 

[Blue Mooner]

Thanks you've made my point for me Bob. Liverpool clearly could not meet its obligations to RBS back in April hence why they got a stay of execution to sell the club and Broughton was put in charge to do so - Administration in all but name - and that is exactly my point. Under most normal circumstances when a company is unable to meet its obligations then the bank can take control of the company and places it into administration to recover its debts. RBS have chosen not to as they are fearful that doing so due to the negative impact such a decision would have on its business.

Well I'm here to make the point that there are many more non Liverpool fans who are more outraged by the fact that RBS haven't placed them into administration and taken the 9 point penalty that they should for operating above their means. We all know that Liverpool can't meet the liability on the debt owed to them by tomorrow and are instead trying to foist a sale on the legal owners WELL below the market value of the club to recover their monies and thus avoid the 9 point penalty that is due.

-- Fri Oct 15, 2010 12:06 am --



On the West Ham point Bob West Ham avoided the 9 point penalty as their Holding company (can't remember their name Hansa or something like that) were not a holding company wholly and only related to West Ham, therefore, West Ham could not be held culpable for their holding company going into administration as it was external factors outside of football (ie the banking crisis) that caused it to go out of business. Fundamentally different from the Liverpool situation.

Good point on the WHU situation if as you say the holding company had other assets other than WHU whereas Kop Holdings has only one asset namely LFC (at least as far as I am aware).

But for RBS putting LFC into admin is damaging their interests as the main creditor and will hinder their chance of recovering the debt in full. You could argue that they would be open to legal challenges from shareholders if their own actions resulted in a bad debt so their only real course of action is to keep LFC afloat until they get a buyer for the football club that retains its main assets (players) and is not penalised with a points deduction. For RBS it really is a no brainer.

I get what you're saying Bob (perhaps I'm not communicating my point clearly) and I would agree wholeheartedly if a NESV was paying £550-600 million but my main issues are that RBS are a) in control of the sale of the club as they would be IF Liverpool had been put into administration and they are selling at a distressed price as if the club had been put into administration. I would guess this is H&G's argument ie not achieving fair value for a club that still retains its quality players AND has not had the nine point penalty.

THAT is what is annoying me. Effectively they (RBS) are selling the club as if Liverpool are in administration (how else are they able to dictate the sale if they have not effectively taken control?) BUT avoiding the 9 point penalty, by not 'officially' calling in the debt (whihc they will HAVE to do if things aren't sorted by today). Your argument is that they would achieve even less than £300 million if the above penalty and or player sales had occurred but I would argue that £300 million is the minimum you would expect to pay for a club of Liverpools stature irrespective of circumstances. The playing staff Torres, Reina, Gerrard, Johnson, Cole could recover half that, then you've got the real estate of the stadium and that's without even considering the value of the global brand that is Liverpool which is worth hundreds of millions.

The fact that they aren't currently receiving the 9 point penalty and haven't sold any players to try and meet the debt means that they are hugely more valuable than they are currently being sold for.

 

[DenisLawBackHeel74]

LInk for last seasons finances (cant' find those for 2010) http://bleacherreport.com/articles/393083-are-liverpool-a-good-investment

I don't think £300M is fair value for LFC....

2008 and 2009 operating profit (EBITDA) were £25M and £27M respectively. I don't have a figure for 2010 but assuming it is around £30M. Now most investors would be looking to pay somewhere between 5 x and 8 x this figure, so assuming best case that means its value would be around £240M. As an investor I would expect this figure to cover debt or at least some debt to be waived or paid down.

I think its a big ask trying to turn the club around; looking at previous years accounts they are crippled by HUGE operating expenses, representing 84% of turnover in 2008 and 85% in 2009, with massive interest repayments of around 22% of turnover.

The question for any investor would surely be how do you intend to cut operating expenditure, sack people, cut wages, sell the ground and lease back, sell assets (players), introduce a wage cap?
I guess this might be helped by reducing interest payments and by increasing revenue through sponsorship and merchandise sales but with no CL and little chance for competing for the PL title they are screwed imo.

For me LFC represents a very risky gamble for any investor which is why we haven't seen much interest and I think £300M is still overstating its value....

RBS should have taken possession sooner imo....but I guess they don't want to be made out as the bad guy.


Quote from their Financial Accounts.....KPMG , the club’s auditors, repeated their warning of a year ago of a “material uncertainty which may cast significant doubt on their ability to continue as a going concern.”


Doomed I tells ya..

 

[moomba]

Apparently Mill have offered to repay the debt, RBS have refused the money.

They seem awfully keen for NESV to be the successful bidders, it'll all come out in time I guess:

 

[mancboy123]

on what grounds can they refuse the money?

 

[Marvin]

Providing LFC are restricted to Anfield as it is, they are going to have to rely on Hodgson to work a miracle, and Gerrard and Torres to turn back the clock.

They have one way forward whoch is a ground-share with EFC which would enable them to massively boost their revenue and I expect moves to that end once the takeover is finalised.

 

[mikeireland100]

i think this has been mentioned before but why has the arrangement with RBS (Broughton etc) not been classed by the FA as an "Insolvency event"?

here is their definition:

“Insolvency Event” means any one of the following:
• A manager, receiver, administrator, administrative receiver, liquidator, provisional
liquidator or supervisor to a voluntary arrangement is appointed in respect of a Club or
any part of its undertaking or assets;
• A Club applies for an Administration Order (as defined in Section 10 of Schedule B (i) of
the Insolvency Act 1986) or an Administration Order is made in respect of it or it
otherwise enters into Administration;
• A winding-up order is made in respect of a Club;
• A Club enters into any arrangement with its creditors or some part of them in respect of
the payment of its debts or any of them as a Company Voluntary Arrangement
(under the Insolvency Act 1986) or a Scheme of Arrangement (under the Companies
Act 1985);
• A Club passes a resolution pursuant to Section 84 (i) (c) of the Insolvency Act 1986 to
the effect that it cannot by reason of its liabilities continue its business and that it is
advisable to wind up;
• A Club ceases or forms an intention to cease wholly or substantially to carry on its
business save for the purpose or reconstruction or amalgamation or otherwise in
accordance with the scheme of proposals that have previously been submitted to and
approved in writing by the Board;
• A Club convenes a meeting of its creditors pursuant to Section 95 or Section 98 of the
Insolvency Act 1986.