New Charges registered

[blues exile]

Just visited the Companies House website to see if there was any new developments and noticed three recent charges registered against the Southend United Football Club.
1) a mere £2 million lent by Roots Hall
2) £3.25 million from South Eastern Leisure
3) £9.675 million from Mezcal
What is going on?

 

[GNH]

All part of the ongoing process to make things more transparent..........

The tangled web of inter company charges is an absolute joke

 

[Spaceman Spiff]

Just visited the Companies House website to see if there was any new developments and noticed three recent charges registered against the Southend United Football Club.
1) a mere £2 million lent by Roots Hall
2) £3.25 million from South Eastern Leisure
3) £9.675 million from Mezcal
What is going on?

At a guess, these are the sums Ron wants the new owners to take on as part of the sale. He may not get a high sale price but he can shift a lot of debt, and if that is what it takes to purchase the assets (including the new stadium land, plans and associated developments) then a new buyer might be content with that.

 

[Smiffy]

At a guess, these are the sums Ron wants the new owners to take on as part of the sale. He may not get a high sale price but he can shift a lot of debt, and if that is what it takes to purchase the assets (including the new stadium land, plans and associated developments) then a new buyer might be content with that.

Yep or putting himself first in the queue in the event of administration.

 

[Dutch Branch]

Just visited the Companies House website to see if there was any new developments and noticed three recent charges registered against the Southend United Football Club.
1) a mere £2 million lent by Roots Hall
2) £3.25 million from South Eastern Leisure
3) £9.675 million from Mezcal
What is going on?

Well I’m guessing that in order to facilitate a sale you need to have everything registered for accounting purposes.

Also on a plus side it may well be a situation whereby in order for those owed money to get paid in any new deal they must have their debt officially registered in order to get paid.

So maybe the stars are aligning, who knows.

 

[Mad Cyril]

All part of the ongoing process to make things more transparent..........

The tangled web of inter company charges is an absolute joke

Not really. It is extremely common.

Perhaps less so in lower league football.

 

[Cricko]

He is being an absolute **** in covering his own arse, whilst the club that eluded his fortunes goes by the wayside

 

[Cricko]

People are going to have to wake up soon. He is feathering his nest come administration.

 

[blues exile]

On reflection looks like the football club has been well and truly shafted. How on earth can it service debts of this magnitude?

 

[Spaceman Spiff]

On reflection looks like the football club has been well and truly shafted. How on earth can it service debts of this magnitude?

It won’t. Either a new owner will clear them as a means of payment to buy the club and stadium, or the club will be kaput.

I’m confident it will be the first of those two and this debt shifting doesn’t surprise me all, in fact I (tentatively) see it as a possible sign of progress in sale talks.

It’s not unusual in takeovers and might be financially beneficial to both parties - less capital gains tax etc as you’re signing on to take a debt, not handing over millions of pounds to buy something and leaving Ron to pay tax then clear his debts.

Both parties can split the saving and everyone (except the taxman) is a winner.

 

[Smiffy]

But Ron said he would “wipe the debt” upon sale.

 

[Holy Joe]

Are these new debts or is he registering a charge on the club with existing historic debt - I'm assuming the latter given our continued inability to lift transfer embargo

 

[Cricko]

Smoke and mirrors whilst he tries to save his own arse.

 

[Cricko]

None of this is about saving the club..

 

[Spaceman Spiff]

None of this is about saving the club..

I don’t think anyone would suggest it is

 

[Chrisb]

It won’t. Either a new owner will clear them as a means of payment to buy the club and stadium, or the club will be kaput.

I’m confident it will be the first of those two and this debt shifting doesn’t surprise me all, in fact I (tentatively) see it as a possible sign of progress in sale talks.

It’s not unusual in takeovers and might be financially beneficial to both parties - less capital gains tax etc as you’re signing on to take a debt, not handing over millions of pounds to buy something and leaving Ron to pay tax then clear his debts.

Both parties can split the saving and everyone (except the taxman) is a winner.

I so hope that you are right.

 

[Holy Joe]

I don't see this as being related to the sale - the debts of the company are on the balance sheet of the accounts (ahem), doesn't matter about charges at companies House. It matters in insolvency, as placing a charge means the debt is secured on the assets, so senior to unsecured debt.

 

[Dutch Branch]

I don't see this as being related to the sale - the debts of the company are on the balance sheet of the accounts (ahem), doesn't matter about charges at companies House. It matters in insolvency, as placing a charge means the debt is secured on the assets, so senior to unsecured debt.

The reason why companies or individuals (creditors) take out a charge against an asset is to ensure that in the event of any future sale of that asset they will be paid out.

 

[Spaceman Spiff]

I don't see this as being related to the sale - the debts of the company are on the balance sheet of the accounts (ahem), doesn't matter about charges at companies House. It matters in insolvency, as placing a charge means the debt is secured on the assets, so senior to unsecured debt.

Yes indeed, there are myriad possible reasons/benefits for the technical charges to finances (deeds, titles etc etc) at a time of takeover negotiations. Your valid point doesn’t mean what I suggested can’t also be the case though - far from it.

We’ll just have to wait and see, and keep everything crossed…

None of us have the genuine inside track on what’s going on so those who are minded to see doom in everything will do, and others of us will see things differently. Just gotta wait for some concrete news one way or the other… utter purgatory

 

[Spaceman Spiff]

The reason why companies or individuals (creditors) take out a charge against an asset is to ensure that in the event of any future sale of that asset they will be paid out.

Indeed, its a primary benefit and financial security for Ron - until he signs over the company with the debts to a new owner, who then inherits the debts with Ron as creditor until those debts are paid. Tax saved etc etc. We’re all agreed what Ron is doing, my point is that it isn’t only a benefit to him to do this if the club goes bust. It’s also a benefit to him if the club (and debts) are transferred to someone else, and I’ve explained why that can work for both parties.

Still, you may all be right and Ron has come this far only to deliberately crash the club into oblivion just to maximise his financial gain.

All this having been surreptitiously achieved under the noses of everyone at the club while while they all carry on oblivious of it all until the bailiffs shut Roots Hall one day soon, even as buyers are queueing up at the gates…