Is Administration the way forward?

[shrimperton]

Echo says today we still under embargo!

 

[Smiffy]

Echo says today we still under embargo!

Of course we are.

As a few have mentioned on here, there are many other unpaid debts and non-filing of accounts that all contribute to Embargo's.

More worryingly if the players are not paid in full by Friday, I believe they can walk for "breach of contract" just like a few did under Tilly.

 

[Mick]

Of course we are.

As a few have mentioned on here, there are many other unpaid debts and non-filing of accounts that all contribute to Embargo's.

More worryingly if the players are not paid in full by Friday, I believe they can walk for "breach of contract" just like a few did under Tilly.

That's why some have been paid and some have not.


Bet Straker is in the "have nots".

 

[SUFCFANS]

No its' not the way forward. As soon as we are out of admin we'd still have the same monthly bills to pay what we have now.. The existing debt has been cleared, as have have the previous 6. The problem here is a cash flow issue. Adim will not solve that...

 

[Tampa Blue]

No its' not the way forward. As soon as we are out of admin we'd still have the same monthly bills to pay what we have now.. The existing debt has been cleared, as have have the previous 6. The problem here is a cash flow issue. Adim will not solve that...

A prudent business realises that the close season is at the same time every year and that there will be no TV or Gate Revenue during this time and it would prepare accordingly.

I agree that cash flow is the problem but financial mismanagement is the cause.

 

[Smiffy]

No its' not the way forward. As soon as we are out of admin we'd still have the same monthly bills to pay what we have now.. The existing debt has been cleared, as have have the previous 6. The problem here is a cash flow issue. Adim will not solve that...

Not quite. As the Administrators would trim the wage bill by off loading staff/players and settling debts (x pence in the pound) and making sure we were left to new owners in a "solvent" state.

 

[TrueBlue]

A prudent business realises that the close season is at the same time every year and that there will be no TV or Gate Revenue during this time and it would prepare accordingly.

I agree that cash flow is the problem but financial mismanagement is the cause.

I would not say mismanagement is the cause its the financial state of football that's caused this along with lower attendances

 

[Smiffy]

I would not say mismanagement is the cause its the financial state of football that's caused this along with lower attendances

How many other clubs are in court every couple of months, under embargo and continually paying staff/players late?

I am sure there are a few others in a similar state, but it's hardly a common theme, even in this financial climate.

 

[Tampa Blue]

I would not say mismanagement is the cause its the financial state of football that's caused this along with lower attendances

We'll have to agree to disagree on that point then:smile:

 

[TrueBlue]

How many other clubs are in court every couple of months, under embargo and continually paying staff/players late?

I am sure there are a few others in a similar state, but it's hardly a common theme, even in this financial climate.

I guess they have all gone bust - something we continue to avoid!

look at it that way!

 

[onceknownasrab]

We need to avoid administration and get fully behind the move to FF. The new development is the way forward. Take a look at Swansea and Blackpool. In 1996 Swansea played Blackpool at home and lost 2-0 in front of 4,478 fans in league 2.

The same year Blackpool entertained Swansea and beat the Welsh wonders 4-0 in front of 3,992 fans.

Look what both clubs have achieved in the last 17 years. Swansea, massively supported by the council, moved into the Liberty Stadium and have never looked back. Their current capacity is 20,520. Not a massive stadium but one that has done much for The Swans.

Blackpool have been in the Bloomfield Stadium since 1901 and it has a capacity of 17,388. Again not huge but enviable.

Roots Hall is a tired old lady that will cost far too much to alter/renovate/increase capacity. Indeed the main asset is Roots Hall because of its location and appeal as a site for an alternative business, namely Sainsbury's.

Cashing in on the good fortune our club had in terms of location is a must. We can move on and up. The potential of our club is huge but will never be realised at RH.

There have been and may well currently be squeaky bum times in the day to day running of our club until the move transpires. Somehow these need to be navigated around and thus far they always have been. The town, the fans and the club need to pull together in pursuit of FF because treading water will eventually lead to drowning and the only salvation comes with our clubs move to safer ground.

 

[Feathers]

How many other clubs are in court every couple of months, under embargo and continually paying staff/players late?

I am sure there are a few others in a similar state, but it's hardly a common theme, even in this financial climate.

According to Wikipedia 12 league clubs have gone into administration in the last 5 years plus some non-leagues which previously played in the league.

As we know clubs do not actively publish news about transfer embargoes or late payment of wages but I suspect close examination of local newspapers will show that there a number of clubs, especially in the bottom 2 leagues, which are in a similar position.

My concern is not so much the management/mismangement of the club but that the business model for a lower league football club, without external funding, is unsustainable. Even if administration could clear our debts (and given that Ron's companies are the main creditors I believe that is a huge if) what is there to suggest that the club could be run on a profitable or break even basis?

 

[Billy is the best]

It is often stated that Ron is the main creditor if we went into administration. Surely Sainsburys would be the main Creditor although we do not know the details of their loans.

 

[Beefy]

Not quite. As the Administrators would trim the wage bill by off loading staff/players and settling debts (x pence in the pound) and making sure we were left to new owners in a "solvent" state.

No they wouldn't.

Some people on here like to portray Administrators as some group of Knights in Shining Armour who are going to ride in, slay the evil Ron, put right the things that he's doing wrong which have caused the problem and then everything is going to be alright.

As I said in the other thread - the only interest that an administrator would have would be protecting the interest of our main creditor. Our main creditor is Ron Martin. For that service they would demand a huge payment for thir costs which is what the redundancies and inevitable player sales at below market value would go towards. And we'll get a ten point hit for our trouble and the underlying problem with the business model - an inability to generate sufficiant levels of cash - is completely unchanged.

 

[Beefy]

It is often stated that Ron is the main creditor if we went into administration. Surely Sainsburys would be the main Creditor although we do not know the details of their loans.

Sainsburys have never paid a penny to Southend United. So no, they are not a creditor of the football club's.

 

[Beefy]

A prudent business realises that the close season is at the same time every year and that there will be no TV or Gate Revenue during this time and it would prepare accordingly.

I agree that cash flow is the problem but financial mismanagement is the cause.

A prudent business wouldn't be in football, particularly at this level.

 

[Jam_Man]

Not quite. As the Administrators would trim the wage bill by off loading staff/players and settling debts (x pence in the pound) and making sure we were left to new owners in a "solvent" state.

Why would there be new owners?

Ron Martin would likely still be the owner, he would certainly still own the ground and Fossetts Farm.

I cant see any benefit whatsoever in Administration other than putting us at risk of relegation, which in itself with the state we are in at moment in between grounds would actually kill the club.

Administration would not mean we bring in more cash so it would resolve nothing.

The answer to our problems is to get new owners, in the absence of will to sell the next best option is to hope Ron Martin gets us into the new ground and actually builds 4 stands.

 

[TrueBlue]

A prudent business wouldn't be in football, particularly at this level.

But in life you gotta play the cards your given

 

[Firestorm]

A winding up order can only result in a winding up (Liquidation), if a creditor wants to apply for administration order it is a seperate issue.
So HMRC will not apply for admin, they would have done that by now rather than a winding up order.

http://www.ashurst.com/publication-item.aspx?id_Content=3808

So its unless one of the other creditors , it will be an RM/MD company or SUFC itself which will appoint the receiver.

If SUFC goes into administration MD, SEL , Metzcal etc will all have to revalue their assets (because their main assets are debts owed by SUFC)

As the SUFC debts to Parent/Associated companies, are Loans themselves, revaluing the assets in the parent/associated companies will result in those companies becoming effectively insolvent themselves which will likely result in the loans made to them being called in. Which they won't be able to pay so they would go bust.
This would mean that all the land which has been put up as security for the loans would become the property of the original loaner (Sainsbury in the main) .

So my understanding is that if we went into administration , unless anyone was able to put in enough money to ensure that RH did not get passed on due to loan default by SEL, we would end up with a ground owned by someone totally unrelated to the club , who wants to build on it.

I honestly don't believe that calling in the administrators is an alternative to what is happening at the moment, we have cash flow problems, any company with cash flow issues will have times during the year when bills can't be met (our outgoings are more regularly set throughout the financial year than our income.
As things stand, the owners of the club are trying to put something in place which will negate the need for regular financial underpinning , Administration will derail this , and to be honest will come about anyway if FF does not come about.

Admin will likely result in, cutting the wage bill by 50K a month, paying rent on RH , no training ground, dramatically reduced squad and therefore years of non league football as attendances slowly slip away.

So Admin now, or hang on to our league status, hoping that we can scrape together enough , get a big draw in a cup, to keep us going whilst hoping that Ron can deliver , whilst putting up with the heartache of being dragged through the gutters by the press once a month.

 

[leeblue]

A winding up order can only result in a winding up (Liquidation), if a creditor wants to apply for administration order it is a seperate issue.
So HMRC will not apply for admin, they would have done that by now rather than a winding up order.

http://www.ashurst.com/publication-item.aspx?id_Content=3808

So its unless one of the other creditors , it will be an RM/MD company or SUFC itself which will appoint the receiver.

If SUFC goes into administration MD, SEL , Metzcal etc will all have to revalue their assets (because their main assets are debts owed by SUFC)

As the SUFC debts to Parent/Associated companies, are Loans themselves, revaluing the assets in the parent/associated companies will result in those companies becoming effectively insolvent themselves which will likely result in the loans made to them being called in. Which they won't be able to pay so they would go bust.
This would mean that all the land which has been put up as security for the loans would become the property of the original loaner (Sainsbury in the main) .

So my understanding is that if we went into administration , unless anyone was able to put in enough money to ensure that RH did not get passed on due to loan default by SEL, we would end up with a ground owned by someone totally unrelated to the club , who wants to build on it.

I honestly don't believe that calling in the administrators is an alternative to what is happening at the moment, we have cash flow problems, any company with cash flow issues will have times during the year when bills can't be met (our outgoings are more regularly set throughout the financial year than our income.
As things stand, the owners of the club are trying to put something in place which will negate the need for regular financial underpinning , Administration will derail this , and to be honest will come about anyway if FF does not come about.

Admin will likely result in, cutting the wage bill by 50K a month, paying rent on RH , no training ground, dramatically reduced squad and therefore years of non league football as attendances slowly slip away.

So Admin now, or hang on to our league status, hoping that we can scrape together enough , get a big draw in a cup, to keep us going whilst hoping that Ron can deliver , whilst putting up with the heartache of being dragged through the gutters by the press once a month.

Thank you for that makes a shed load of sense.