Let's take a step back here for a minute.

[BrahimHemdani 1]

If I understand this correctly the BK's justification for including Ticketus in the consortium is that:

 

1. We owe them £24M from season ticket sales over the next three seasons (and BTW how much of that is due at the end of this season/beginning of next?)

 

2. If they are included in the consortium it might be easier to do a deal with them, which presumably means repaying the £24M out of say 4/5 years ticket sales rather than 3 or from the share issue, directly or indirectly or getting some kind of goodwill reduction.

 

3. They will also be a source of an unspecified amount of money for working capital up front (repayment terms and interst unknown)

 

But at the same time according to the BBC "It has also emerged that Duff and Phelps are set to challenge the creditor status of finance firm Ticketus. A two-day hearing is set to get under way at the Court of Session on Thursday."

 

So if you were Duff and Phelps why would you accept a bid from a group that included a company whose creditor status you are about to challenge and whose part in the original purchase remains unclear? If you are there to protect the creditors and you don't believe Ticketus are a creditor are you not acting against the best interests of the remaining creditors if you accept a bid that means putting them in a positon where they might be able to recoup some part or all of the money that you do not believe they are owed?

 

Or am I missing something here?

Edited March 14, 2012 by BrahimHemdani
Clarification

[rbr 1,256]

Cannot get my head around this at all , unless Ticketus have come to some amazing deal where they try and recoup their money in interest charges/finance etc , otherwise it makes absolutely no sense at all to me.

 

However there may be a way that getting them onboard helps with a CVA , who knows

[Zappa 0]

It's a head scratcher, that's for sure.

 

From my understanding of the administration process for a football club, if Duff and Phelps don't believe that Craig Whyte is a creditor and don't believe that Ticketus are a creditor, then that means the club's largest creditor by FAR would be HMRC which would in turn mean that a CVA wasn't even possible would it not? I thought for a CVA to be possible HMRC would need to be due under 25% of the creditor pot?

[Bluedell 5,599]

If you are there to protect the creditors and you don't believe Ticketus are a creditor are you not acting against the best interests of the remaining creditors if you accept a bid that means paying money to a firm that you do not believe are due anything?

 

Why does accepting the bid mean that you are paying money to a firm that you do not believe are due anything?

[BrahimHemdani 1]

Why does accepting the bid mean that you are paying money to a firm that you do not believe are due anything?

 

I mean you put those people who you believe are not creditors in a position where they will be repaid some part or all of the money you believe they are not owed, by others e.g. potential shareholders. Why would you accept a bid from their consortium that put them in that enviable position?

[BrahimHemdani 1]

Why does accepting the bid mean that you are paying money to a firm that you do not believe are due anything?

 

Thanks, have clariified wording in OP; appreciate you may still not agree.

[craig 5,199]

BH,

 

To try to put some kind of extreme example on this....

 

1. The administrators believe we owe 10 million, but this doesnt include any monies due to Ticketus (if we included it then it was 25 million)

2. Bryan Kennedy offers 35 million for the club but by NOT including Ticketus.

3. The BK's offer 100 million but they are also agreeing to include Ticketus and their 25 million in the deal.

 

In Kennedy's offering the creditors IF it can be proven that Ticketus arent a creditor get 35 million. But in the BK deal the creditors (again, excluding Ticketus because they are now part of the consortium) get 65 million.

 

Now, what would happen, I suspect, is that the creditors would get their 10 million and the excess would go into the club's coffers as working capital - under Kennedy's deal there is 25 million working capital (but Ticketus are not part of the deal) whilst under the BK offer their will be 65 million in working capital even after Ticketus have been paid off.

 

In that instance, the administrators would have done their job by a) getting as much value as possible for the creditors and b) by providing long-term longevity for the club.

 

Obviously this is an extreme example and may not be the case - but there CAN be compelling reasons why you would, as administrator, would be comfortable with someone being included in a proposed buyout - because it could give 10% return to creditors as well as provide a healthier future for the club.

[Bluedell 5,599]

I mean you put those people who you believe are not creditors in a position where they will be repaid some part or all of the money you believe they are not owed, by others e.g. potential shareholders. Why would you accept a bid from their consortium that put them in that enviable position?

 

Thanks for the clarification. I guess it depends on whether it will have an impact on the payment of the other creditors. Presumably the cash paid to "buy the club" will go towards creditors. if subsequently Ticketus also get paid from other cash then the administrators should not have a problem.

 

If however it does impact the payment of creditors then, yes, you would have a point and there may be an issue.

 

Like everything else, it's just unclear. I get the feeling that the administrators' view of Ticketus changes on a daily basis.

[Zappa 0]

3. The BK's offer 100 million

 

Earth to Craig.... Earth calling Craig.... Come in.... Over.

[BrahimHemdani 1]

BH,

 

To try to put some kind of extreme example on this....

 

1. The administrators believe we owe 10 million, but this doesnt include any monies due to Ticketus (if we included it then it was 25 million)

2. Bryan Kennedy offers 35 million for the club but by NOT including Ticketus.

3. The BK's offer 100 million but they are also agreeing to include Ticketus and their 25 million in the deal.

 

In Kennedy's offering the creditors IF it can be proven that Ticketus arent a creditor get 35 million. But in the BK deal the creditors (again, excluding Ticketus because they are now part of the consortium) get 65 million.

 

Now, what would happen, I suspect, is that the creditors would get their 10 million and the excess would go into the club's coffers as working capital - under Kennedy's deal there is 25 million working capital (but Ticketus are not part of the deal) whilst under the BK offer their will be 65 million in working capital even after Ticketus have been paid off.

 

In that instance, the administrators would have done their job by a) getting as much value as possible for the creditors and b) by providing long-term longevity for the club.

 

Obviously this is an extreme example and may not be the case - but there CAN be compelling reasons why you would, as administrator, would be comfortable with someone being included in a proposed buyout - because it could give 10% return to creditors as well as provide a healthier future for the club.

 

As you say this is an extremely "extreme" example. I see no reason why BK would offer significantly more than anyone else, on the contrary they might believe that there are reasons why they could offer less.