TOPIC: Club statement re trust meeting

Laffy wrote:
If none of the current shareholders decide/are able to buy shares are they able to be offered to outsiders ?

NORTHERNSOUL wrote:
True, a lot different attracting investors in a hugely profitable company as opposed to CUFC ! Though the brewdog thing is a membership scheme more than an investment.

But if they issue 1 million shares with 250k = 25% surely the rest have to hold an equal value minus the 134 they are going to withhold?

If the above is true in threory the trust and their investors could buy a large shareholding, not that I think they should.

It's clear from CUOSCs statement that they do not yet have all the ins and out of the proposal.

I can see them reviewing details of the proposal and simply declining it.

RonBacardi wrote:
no mention of right to veto in there.

Waterworks wrote:
Surely they could only so that if the others decide to dilute their own shareholding. Can't see Jenkins doing that.

NORTHERNSOUL wrote: but would this not come from the local consortium who have £1m available as investment..sorry edit to add but obviously will expect change at the top

The CUOSC statement clearly says they have to canvas members and take legal advice , 20 days isn't long!

Laffy wrote:
Laffy to clear up what most people seem to be worried about this evening

After what you learned last year do you believe the Trust have a veto over new shares being issued or do you believe the football club could just go ahead and do it anyway.?

If they went ahead with it anyway potentially one of them could buy the trusts shares, surely to god that isn't possible

After recent events I don't know why anyone would want to talk to these bustards, let alone pay to ease their financial problems.

At this point in time they have never been more unpopular.

Surely the best thing for the Trust (or anyone else interested in buying) is to start saving now and wait to part with cash when the inevitable Administration happens..and then buy the club from the Administrators.

seesaw50 wrote:
20 working days, from the time the written proposal is received - which isn't yet.

I suspect the cunstodians are doing all they need to do, offer the trust the opportunity to buy new shares to maintain their holding,they are fully aware that the deadline and cost will make it very difficult for the trust to comply. Disgraceful!

howoldboy wrote:
Oh if only it was that simple Mr Howoldboy

Sadly this appears to be a clever, sly and underhand shafting of the trust and by extension the supporter base in general by the ciurrent regime

It must be incredably difficult for the trust to negotiate in good faith when the response is no to what you propose and by the way f@ck you we are diluting your ownership just because we can

Sad day for the club

bluepudders wrote:
It is an odd statement referring to mutual respect for constitution, position and structure. More discussions are to take place with regard to the existing 134 shares to me is a dead give away that the million new shares will be of a different class with different voting rights.

The board of CUFC Holdings i.e. AJ and JN have never before looked forward to working with CUOSC. Now they are acting like a Tenerife timeshare salesman who's just discovered the guy sitting next to him is a lottery winner.

Last time the Trust had a big cheque they blew it on the 25.37% shareholding in CUFC. AJ has had a sniff of more money being available to CUOSC and he'd like it 'invested' in the club. What better than an issue of 1,000,000 B shares with CUOSC raising £250k and maybe local investment chipping in another £250k. In return AJ will convert £500k of his loan into B shares. He was never likely to be repaid that £500k so converting it won't cost him anything. In the meantime the cashflow is probably sufficient to repay most of the Pioneer loan this summer.

Please note Barry, there has been no mention of writing off AJ's loan. Conversion is totally different and doesn't create a taxable profit for the club. Also I very much doubt given the likely very limited voting rights for the B shares there'd be any problem with the existing golden share or veto as there'd be no change in control. CUOSC would have no reason to block it if they were willing to invest £250k anyway.

I have to admit if AJ's plan is along these lines it is very smart. There would possibly be an inheritance tax advantage for him too in having additional equity rather than money owing from the club.

Lancs blue wrote:
Yet people go on funding them by buying their waste of time and money season tickets some people are totally beyond me

Carwash - Can he legally convert 500k though ? If he is planning on doing what you said, as you say it's a clever move. Where does the million pound in cash go to though if it is raised ? I know it says investment but in what? And if they are to remain in charge I very much doubt the trust or anybody else will be keen on them deciding on what to invest it on.

I suppose they can also say the billionaire does exist and if it was A shares and B shares that they are in talks with him regarding A shares

carwash wrote:
It's only smart if someone bites.

Please note Barry, there has been no mention of writing off AJ's loan. Conversion is totally different and doesn't create a taxable profit for the club. Also I very much doubt given the likely very limited voting rights for the B shares there'd be any problem with the existing golden share or veto as there'd be no change in control. CUOSC would have no reason to block it if they were willing to invest £250k anyway.

So if theres no control attatched to these new shares why on earth would any new external shareholders "invest" 250k

And surely directors who do not have total control ie the trusts golden share cannot just impose a scheme of this sort on the remaining shareholder

This is what the current court case with Valerie Belkon at Blackpool is all about is it not ?

NORTHERNSOUL wrote:
Personally I think this is an attempt to lure money in from the CUOSC and its supporters and in return they may be given a seat on the Holdings board. There may be other people interested locally in having an investment in the club. I don't think control is up for discussion at this point. AJ can only introduce a scheme like this if CUOSC is willing to go along with it and invest. He will say he is converting some of his loan but that is different from putting in hard cash.

NORTHERNSOUL wrote:
On the basis that AJ already injects £500k a year to maintain his position of power .. it wouldn't hurt him too much to bankroll a relative to inject £250k of "new money" to test the Trust's financial muscle. If the Trust fails to deliver he finally has total control.

Waterworks wrote:
Yes provided CUOSC are in favour he can convert and I don't know why CUOSC would complain if he was getting B shares with limited votes. The only external cash would come from CUOSC and other investors. It would go to CUFC Holdings who would then lend it on to the Club. Presumably there would have to be some agreement on what it would be spent on. My worry is that it would be spent on buying the players that the Dempsey and Potts money was supposed to be used for.

howoldboy wrote:
But as i say i.m virtually certain the Trusts golden share would prevent this being done without their agreement.

And the seat on the board isnt worth the paper the share certificates are printed on whats the point of going thru all this so you can get a seat on the board and be outvoted 2-1 each time.

Its becoming pretty clear that the Trust should withdraw from all negotiations and return to doing what they were set up for ie Effect the removal of any owners who they felt were acting against the interests of the clubs supporters.

Barry, I agree with you. This isn't about control or trying to dilute CUOSC. CUOSC has said it has money to invest so AJ is interested in its cash. He can say he will convert some of his loan to create the impression that he too is investing and if other investors are brought in then even better for AJ. End result status quo and a cash injection into the club.

The money pledged to the trust in most cases will only come through with regime change as a condition
Investing into the club to retain the status quo would be a no go for most of the trusts local investors
So the trust will have very little money to buy the new shares

carwash wrote:
But even if they were mad enough to consider getting involved in this hair brained scheme where does Jenkins think they will get 250 grand from unless i.m mistaken the scheme they were proposing didnt involve their "business friends" simply giving them the cash they were leaving that to the trust while putting their own cash in purely in exchange for a shareholding.

Surely there must be somebody who has the ear of our friend from the Edinbuugh Wooilen Mill after all the word is theres no love lost between him and Nixon.

DeckchairBlue wrote:
It is essentially a beer buying club. You get a case of one off beers every year. Most of the folk signing up are aware,and do it for this,alone.

I don't think anything is any clearer than before the meeting. This is becoming quite a farce.

With little reason for the 3 to want to keep hold of the club in the face of constant abuse and lack of money for them I can only assume there is something else stopping them from going. God knows what that could be though.

The thing that gets me,is that they're not young. They can't be waiting for years for a new ground.

High Street wrote:
And if you think about it in Jenkins case it cant really be for the money can it ?

In Nixons case yes it could be to fund his retirement and to pay for all those trips to London when the FL are no longer footing the bill.[ mind you he.ll need a new excuse for the wifey as well ]

And its pretty common knowledge that Carlisle Glass are bumping along the bottom and need investment and that Stevie would love to come out from under his brothers apron.

I think this proposal needs a bit more meat on the bones.

Under company law:
I was under the impression that the agreement of 75% of current shareholdings was needed before new equity could be released.

Is this was a share conversion where the 134 shares were converted into 1 million shares then no extra funding would be required although again it would need approval from 75% of the share holdings.

Flatcap wrote:
I'm no expert but surely if this can be done then the trusts so called golden share has never been a golden share?

I shouldn't think CUOSC need to be worried about the timescales in affect here, as from where I am sitting using the 5 to 10 days algorithm 20 days gives them a minimum of two years just to accept the proposal and a further 18 years to complete the deal by which time AJ and JN will be long gone and if he is lucky SP will be dribbling down his chin in a wheelchair as a resident in a third rate old folks home being spoon fed talcum powder daily for fun by some spotty ill educated under paid over worked teenager on a power trip. Nuff said.

Not reluctant custodians anymore, are they? Why won't they step aside for the greater good of the blues? Smell a rat with this, not to be trusted.

If the Trust want to block the process they have to challenge the terms and the easiest is the valuation. £1 a share for a minority holding in an unquoted loss making company with unsaleable assets is outrageously high. Any attempt to force them to buy at an inflated price is a breach of their shareholders rights. That ignores any magic share they may have to veto the process. Fight fire with fire, you can stall this easily for years

Markovitch wrote:
Ahem Marko I don't think the United Trust will be arguing £1 a share is too high. In the last accounts they valued their existing 34 shares at £200,000. Valuing these shares at £1 would create a deficiency of about £50,000 and lead to the Trust's probable restructure or closure. The only way I can see this new plan progressing is with a two-tier capital structure, I suggested A and B shares, where the Trust can claim its existing 34 'A' shares are worth at least £50,000 and any new 'B' shares are £1 each. Provided all the votes that matter are with the 'A' shares, I can't see how the Trust is being forced to do anything other than politely ignore the offer to invest within the 20 days. If the Trust doesn't put in its £250k I suspect the proposal will die a death with AJ claiming the Trust couldn't come up with the money to back all its talk. In the meantime the carrot of a seat on the Holdings board will be dangled in front of Norman to try and tempt him.

As Laffy said the Trust are being cornered. They just have to be cool, calm and collected - ask for all the details in writing and take proper legal and financial advice.

NORTHERNSOUL wrote:
This is a very, very good point. If they choose to effectively prop up Pattison and his handlers, the Trust are basically betraying their entire raison d'etre. Big decision ahead of them here.

Markovitch wrote: quite so ...best post so far .....whoever dreamed up the club's proposal are only interested in raising cash , the board's position is untenable I'd say after recent events . As others have said there must be something else keeping them from going!

The timing of this is all important to me. The billionaire rubbish was announced after the end of the season when there could be no backlash, and they've done exactly the same thing here, where they've announced it after the last game of the season.

Well I suppose we don't know the finer details, however if what most have commented is true surely it just creates more confusion on who owns what and who can do what and creating a further barrier for anybody trying to buy the club

Fine. I bow to your knowledge of the structure and rights attached, I don't know what these 134 shares are to be honest. But companies are valued on 3 (or 4) bases. Profit dividends and assets. There are no profits or dividends. The assets could be saleable but to whom and for how much? At worst they can ask for a professional valuation which they can block the football club from paying for. Then they can question the valuation, just delaying and delaying will stall the whole thing and cost Jenkins . They can then say they have to put it to the members, that could require a prospectus etc etc And so it drags on for ever.

I don't see why they need a two tier capital structure. That could potentially lead to problems in the future and it would mean the club would lose access to certain potential sources of capital, would be difficult in the AIM for example. If the shares are shown at £200k and they are worth less then just write then down, no? I don't know anything about UK accounting but you have impairment standards? Permanent impairment of a not for sale financial asset? Why would that mean winding up the trust? Just means the accumulated surplus goes down.

Its obvious what Jenkins is trying to do. He puts in a couple of hundred thousand a year, this year he will make the trust do it. If they can't he'll stump up the money but in return he takes full control. Nice move, but one move in a game if they play it properly. Ultimately the club will either get £1m in cash, £1m removed from the debt in the balance sheet or something in between. Why is that bad? The trust has never done anything and all the wannabee waiters have never offered to put cash into the running of the business so if you look at it without emotion it is actually good for the club.

Good for the club ? They had a far clearer offer of investment last year that a lot of the fans could understand, but rejected it on ludacurious grounds. Unless in the actual propsel more details are forthcoming and it's not a ploy to take more control / recover debt instead of investing the 1 million then I can't see how it's a good thing

I have read a lot of interesting points on this thread and not having had the benefit of a classical education, I confess a lot of it is over my head. However one massive issue stands out - they want investment????, after all the shenanigans of the past year, billionaires, confidentiality clauses, boardroom shuffles and downright deceit, they want me and others to give them some money whilst they remain in power to administer it in a manner they choose???? God knows it sticks in my throat paying to go through the turnstiles I'm bloody sure I would not trust this lot with a penny more, bugger off!

Don't let anything fool anybody here, this is nothing to do with the horsemen actually being fair and/or decent. This is entirely to do with getting somebody (or sombodys) else to throw money at the problems. This is going to be an offer of shares to the existing shareholders, whether it is a different class of shares, or the same, makes absolutely no difference. Pattison and Nixon (possibly) are not going to take up the offer of extra shares, the trust has no money to pay for the extra shares they will be offered so the only thing left will be for Jenkins to convert some of his loans to shares (equity) and thereby reduce the liabilities on the balance sheet.

If the trust can somehow manage to raise quarter of a million then the horsemen will be massively happy as they can actually give that cash directly to Jenkins and thus reduce the amount of his loans. It is a win win proposition for the owners. They are even able to accuse the trust of not being interested if they refuse, or can't raise the cash.

Can we not just stick with them until the club goes into administration .There are warnings with the accounts of the club about this .I know its not the best idea but at least we would be rid of the Parasites once and foreall

Moorlad wrote:
Excellent post Moorlad! and in plain English and simply put.

Yes quite simply its win win for the owners whatever happens. The trust are damned if they do and damed if they don't.

There is no danger of administration to be honest.

The last published accounts show a profit (although it wasn't really) because of the write off of Fred's loan. The next accounts which are up to June this year but won't be filed until after Christmas, will show a very healthy profit due to the sales of Potts and Dempsey, extra cash for the young keeper at Man U and the cup games with Liverpool and Everton. Those two years of "profits" will be enough to keep the balance sheet at its current level or better for another 4 or 5 years. As long as there is cash generated there will be no real going concern problems for at least that amount of time so they are in a real position of strength compared with where they were when that money was still owed to Fred. The auditors may well still include a going concern paragraph, as I'm sure they'll have to, but the reality is the club's accounts look pretty healthy at the moment, even though there are still normal operating losses of almost half a million on a year's trading.

Maybe I'm missing the point here but less assume that no one takes up the shares so Jenkins converts £1m of debt to equity. That means 3 things
1) The trust no longer has 25% so can't block a winding up order. However the trust has been at loggerheads with the fans for years so I don't see anything lost there.
2) The debt due to Jenkins goes from £2m to £1m which is good for the club
3) If we have a cash deficit next year Jenkins will fund that rather than all this 'put in £1.5m but the club can't spend it nonsense' we heard before.

Feel a bit sorry for Jenkins. He is effectively writing off up to £1m of debt and he is being pilloried for it

I agree with you Moorlad.

This looks like a stand your corner with cash and we will convert loans to equity-a hybrid of what I was proposing without asking for the Trust to invest.

The big issue is why on earth you would put £250k behind the current regime with all its issues.

Basically it's a problem for the Trust and they need proper detail and advuce