Potential Investor

[Dalton Bluebird]

You can fully own a ground while being liable for debts secured on it.

If we wound the club up right now, we'd probably have to sell the ground to meet the debts - but while we're running and making repayments, we own that ground. We just happen to owe money which is secured against it. The Furness Building Society Stadium no more belongs to the Furness Building Society than my next house will belong to Barclays (or whoever I get a mortgage from). Despite the name.

As soon as payments stop, all bets are off with regards to ownership of the ground... but if we're running as a club, the ground is still an asset and the debts are still debts. The two are no more linked than anyone else with a mortgage, and the value of the club is still essentially the assets (which for us is basically just the ground+fittings), minus the debts/liabilities, plus/minus any potential profits or losses.

The same as with any business, there is an aspect of the value which is subjective: the value of the name, recognisability, branding, potential profit making etc... I saw an interesting problem at work recently where a profitable company with a turnover of several million pounds per year and intellectual property probably worth millions more, was valued at about the price of about a dozen laptops, a server and a coffee machine... because they were the only fungible assets. Anyone with any sense would realise the company was worth far more than that, but that's all it could be officially valued at.

Thanks for that, I understand a bit better now. I seem to remember reading about a business being bought for £1 or 1p to enable a sale to go ahead, I guess that's where the owner want's to get rid of a ' hot potato' and cut there losses, a bit like the current scenario?

[Uncle Peter]

I'm saying things didn't progress to a stage where they would be needed.

If things had progressed to a stage where they were needed, were they ready ?

It wouldn't have taken much effort to get up to date figures together, of course the club on a weekly basis knows its position.

They wouldn't be audited figures though, as audited accounts are prepared once a year.

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[mickmike wilson]

Thanks Pete.

[barrowfan]

of course the club on a weekly basis knows its position.

So what was the position last week Peter?

[Ste Story]

Im talking in terms of coming to sell, which is kind of what the whole thread is about (keep up).

You can own a house but if you have a mortgage on it for the full amount and then sell the house its worth [SwearFilter] all to you because all the money you recieve pays off the mortgage?

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[Uncle Peter]

of course the club on a weekly basis knows its position.

So what was the position last week Peter?

That will be covered at the agm. I can't go into that on here, or indeed anywhere prior to the agm.

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[barrowfan]

So what was the position last week Peter?

That will be covered at the agm. I can't go into that on here, or indeed anywhere prior to the agm.

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Understood. Thanks.

[John Very Little]

If the club had no debts someone coming in wouldn't get the place for free?
Can someone tell us what would happen with any surplus - sit in the bank account of the members club?

[Kieran]

If the club had no debts someone coming in wouldn't get the place for free

Why not? There is no one to buy it from. The benefit we would get from it would be investment in the club.

[Spanner]

Re what happens to any cash surplus (or other residual assets), I think this is the relevant passage from the club''s Articles of Association:

7.1 If upon the winding up or dissolution of the Company there remains after the satisfaction of all its debts and liabilities any property whatsoever the same shall not be paid or distributed among the members of the Company, but shall be given or transferred to* some other company or association, or to any charitable company or institution or institutions in each case having similar objects to and (without creating any binding trust) operating within the Furness area of Cumbria, such company, association or institution to be determined by the members of the Company at or before the time of dissolution or, in default of thereof, by a judge of the High Court having jurisdiction in respect of charitable funds, and if and so far as effect cannot be given to the aforesaid provisions, then to some charitable object with the said area.

*refer to additional beneficiary set out in Article 68 per Special Resolution passed 6 February 2003

I think the reference to "Article 68" must actually mean Article 69 which says:

On the winding-up and dissolution of the Company the provisions of the Memorandum of Association shall have effect as if repeated in these Articles with the insertion in line 4 of clause 7.1 after "...transferred to .... the words "The Football Association Benevolent Fund or to..."

So, basically the members would decide I think. An obvious option I suppose would be to transfer the surplus to a Supporters Trust who might then invest the money (as share capital) in a new company to which the FA registration is transferred (or a new company set up to operate a phoenix club).

[Renfrew Refugee]

Are you having a laugh surplus money to the members, the club couldn't afford to fix the wall in Wilkie Road without the money and efforts of the GMA

[Dalton Bluebird]

Are you having a laugh surplus money to the members, the club couldn't afford to fix the wall in Wilkie Road without the money and efforts of the GMA

That's the point I was trying to make earlier.

[Spanner]

Are you having a laugh surplus money to the members, the club couldn't afford to fix the wall in Wilkie Road without the money and efforts of the GMA

The book value of the club's assets currently exceeds its liabilities (or at least it did in the last set of accounts released). If* on dissolving the company the BoD (or liquidator) could sell the assets for their current book value there would be a surplus.

*A very big "if" I suspect in the case of the £600k book value on the stadium.

[John Very Little]

The book value of the club's assets currently exceeds its liabilities (or at least it did in the last set of accounts released). If* on dissolving the company the BoD (or liquidator) could sell the assets for their current book value there would be a surplus.
*A very big "if" I suspect in the case of the £600k book value on the stadium.

I would doubt the ground value as well but I don't think the debenture debt will be as high as stated as not all the debentures would want their cash back, particularly if the club was in trouble.
However if someone was offering cash to buy the club then I'd happily take it for my debentures rather than give them up for free.

[Bigfathoss]

More or less repeating what I said earlier on in this thread...if the legally binding caveats are in place to ensure all the debts are cleared, a set sum to be pumped in monthly for a set period, and specific areas of development earmarked clearly then my members vote will go to selling for a quid. I would not want to see a potential deal to save the club (and there is [SwearFilter] all else out there) scuppered because voting members are gimping about who should get money from an inflated selling price.
1. Clear all debts.
2. Secure the immediate future
3. Sell for a quid

Of course, this is my current opinion based on what is known or perceived right now. If conflicting info comes to the fore then it will/may change accordingly.