Minutes from a meeting with Admin

[MadAmster]

Minutes from the latest meeting with the administrators (part 1)
Questions For SCG Mtg 7/2/22
- Will we get the notes of this meeting this evening, or confirm what we can say – as fans are expecting updates immediately?
o This is the intention.
- Can you confirm that you received an 'asking price bid' of £28m from the Binnie Brothers to buy the club?
o Confidential – no comment
- Can you confirm that this would therefore satisfy unsecured creditors at a minimum of 25p in the £1 - thereby avoiding any further points penalty?
o Yes.
- Has an agreement been reached with HMRC for the repayment required and
likewise with other creditors?
o HMRC has asked for update – will not agree until deal is presented in final form. They didn’t have issues with proposals. Quantuma don’t feel it is appropriate for HMRC to attend the proposed mtg. In response to Steve Gibson’s letter – they are not publicly responding. Quantuma have a funds flow proposal for preferential creditor portion (undisclosed), but can think unsecured portion is 25p in £1. Not a liquidation scenario – so waterfall outlined is caveated benign response to financial situation. HMRC has not been difficult – v. constructive discussions. Unsecured creditors are well aware of situation, no particular difficulty. Quantuma has a skeleton format of exit document. The original indicative values are potentially compromised by EFL position on Football Creditors (re: claims).
- Can you confirm whether you are in a position to accept this bid as it does not include the stadium, when you have always indicated they would be sold as a package?
o The position has changed during administration – it depends on best bid for creditors. It is beneficial to include the stadium, but that is up to the bidder – Quantuma needs to get the most for the club.
- Can you confirm that the offer would also provide sufficient funding immediately in order to satisfy the EFL that we can complete the season?
o Yes – all offers cover this.
- If the proposal by Mel Morris re claims from Middlesborough and Wycombe is
accepted, are there any other issues holding up announcing a preferred bidder?
o There are no other hold-ups. No further delays in our view.
- Will the administrators ask Mel to confirm whether he would indemnify the club against claims if Boro/WW refuse Mel's offer (or it otherwise appears unworkable)
o Waiting for a response – would consider alternative options, but not an immediate priority - will look at responses from the other clubs and EFL before responding. Still remaining court application route.
- Has the club got enough cash to complete the season? If not how long is now covered?
o Not going to discuss, can get past Feb, but not giving date – there is a degree of urgency, confidential to ongoing discussions.
- Following new media articles, how many genuine bidders are there?
o Not going to discuss. The media story re: Mike Ashley has not been communicated to club, and they continue to liaise – therefore assume press articles are not accurate.
- Do you have a party in mind who would be your preferred "preferred bidder”?
o Absolutely not. Duty is to all stakeholders. Duty to reject bidders only if Directors & Owners tests would fail. They have no preference. Bidder must have sufficient funds to takeover and include 2 year business plan to agree with EFL.
- What is your position on EFL’s proposed meeting with all parties including HMRC? If the offer to cover legal claims is refused, will you do this?
o Happy to attend meetings that would be constructive – not sure about
meeting in form recommended – more likely to have separate mtgs – open minded. Suggestion the form suggested may be counter- productive. Including HMRC is not appropriate – the idea that they make take further cuts in unlikely – this has been communicated consistently to EFL. Preferred bidder must deal with claims – and this forum is not appropriate for that. Other creditors should not suffer, so do not need to be involved.
- Is the admins' understanding that the attempt to broker a £7m out-of-court settlement with bidders on behalf of Middlesbrough and Wycombe Wanderers was made by the EFL?
o Not going to discuss – but the figure didn’t come from the administrators. We have indications of claims and have seen indications of lower figures that would be acceptable. Also been inferred to other parties, don’t know who by.
- Has a cost been agreed for Pride Park Stadium for prospective purchasers?
o Not in jurisdiction of Quantuma – there has been a consistent view, indicative value communicated to all bidders, which they do not consider to be unreasonable, communicated to all prospective parties – has not changed (or with bidder identity).
- Can the administrators confirm that Mel Morris wishes to have no further involvement in Derby County if/ when they exit administration?
o Can’t talk about, he has outstanding loans not expected to be repaid. Mel wants to ensure a smooth transition to new owner. There is a belief he has no interest in further involvement. However, he now is involved
in settlement of claims. If administrators accept bid not including stadium, Mel or MSD will retain ownership.
- Can the administrators confirm the reason Stephen Pearce is still involved in the club when he was a major reason we are in this position?
o Social Media comments are upsetting. This debate has to stop, he has huge amount of background knowledge and is still needed by the administrators. His future, his actions he is aware of – he could clarify if he chose to. When he was a member of the Board, they took and acted on advice from experts. Proceedings with EFL, accounts, transfer dealings etc. – he is conduit to recent history & documents. Also have independent consultant – Paul Aldridge – to monitor and work with Stephen Pearce. Not appropriate to discuss. Any reference to him representing Mel is ridiculous.
- Why were players that Wayne Rooney didn't want to leave sold after he was apparently assured by them that this wouldn't happen?
o The manager runs the squad, nobody wanted to sell, but did not have funding. They had funding to January, but a finite amount we could borrow. Accepted communications may have been better. Offers allow club to continue, was an economic necessity. Embargo enforced difficult decisions. Sales were made to prevent loyalty bonuses, contract payments as well as receive fees. Constant borrowing is not feasible. Didn’t want to – but had to in timescales.
- More specifically, why was Graham Shinnie sold given that the reported fee was only £30k?
o Not going to discuss individuals – due to GDPR. Social Media don’t know wages, bonuses, agent fees etc. Value of deal is a considerable amount – all helps.
- After sales of youth players, apparently behind the manager’s back, could there still be further sales?
o No – the transfer window closed. If players can’t sign new contracts, some players can leave – out of club’s control. There are no plans to make any further disposals.
- Doesn't selling Derby's players, particularly those who may be worth millions in future years for much lower sums now, reduce the value of the assets that potential purchasers would be buying and therefore risk jeopardising the sale?
o This is a naïve question – doesn’t cover reality of expected losses of under £10m, covered by ticket money, player sales, borrowings. Borrowing could become an issue. Club needs to get to the future for assets to realise values. Has to be able to continue to trade – hence difficult decisions. Can’t predict future values, must deal with the here & now.
- If we do prove funding for the remainder of the season, would we then be able to renew players’ contracts to avoid further players leaving for nothing?
o Of course – that’s what we are trying to do. Needs an exit plan agreed, trying to do that.
- Quantuma met with MPs, they are being very helpful – agreed to go to court to resolve claims, EFL lawyers said no which knocked them back. Both prospective bidders are liaising with parties. One has already spoken to the EFL regarding claims, but wants ‘clean hands’ after takeover, so doesn’t want to get involved in a row over claims. The other bidder is considering
negotiating, but not progressed.

[Andy_Faber]

Interesting stuff. I’m reading this while up a ladder but if I read right, the only live issues are the boro and Wycombe ‘claims’. HMRC appear to have settled, but knowing their MO they will keep all cards in play until theirs something everyone will sign in blood. Also interesting re transfers and shows how little people have thought about the complex nature of contracts these days

[Geoff Parkstone]

......."shows how little people have thought about the complex nature of contracts these days"

Speak for yourself !!

[MadAmster]

Part 2

- Arbitration is still being convened – club wanted to go to High Court, but EFL
ruled this out.
- The EFL release last week was not considered helpful, MSD is not a
stakeholder – their position is clear and not up for negotiation. Suggestion
they may have to take a cut jeopardises potential future borrowing.
- Quantuma has met with Wayne Rooney and given clarity on funding and
where the funds have been used – on Wages and Operating costs.
- Legally they can compress the claims – it is unprecedented in over 35 years
experience for administrators to have this rejected. The process should be for claimants to submit claims, respond, and then go to court if necessary. Based on case law and legal opinions legally Quantuma could not offer more than £1 for the claims. Quantuma is very unhappy with the EFL position on this.
- Middlesbrough needs to respond to Mel’s proposal rather than the EFL. If it goes to the High Court with Mel, this does not involve the EFL.
- Wycombe has given proof of debt, but not submitted a legal claim. They similarly need to respond to proposal. Quantuma has met with Rob Couhig – he seemed nice – but they explained there is no money available for the claims. Both Steve Gibson & Rob Couhig seemed charming and said to go back to them if the situation changed – it hasn’t.
- There have been suggestions of a legal insurance policy, but the amount quoted is wrong, the premium is very significant and not economically viable.
- Mel has offered to help to avoid players having to leave – this has not been used but the offer is still there.
- The accounts were due to be submitted to the EFL on 31st Jan. An extension to this has been agreed with the EFL, but they will be submitted in the next 2-
3 days.
- There were questions over the EFL inconsistency over allowing Luke Plange
to come back on loan. Quantuma were not going to question this, but the EFL
knew we needed money and had a v. small squad, so were understanding.
- To put money into the club, ticket sales, concourse sales, hospitality,
advertising and sponsorship are best ways. We get a percentage from
merchandise sales as well. Money from RamsTV also goes direct to the club.
- The club is trying their best to find cash sources.
- There are no plans to sue other clubs (Aston Villa, QPR etc.) as we do not
believe any of the claims have merit, so this would not be a good use of funds. The club is still investigating some potential claims (with Stephen Pearce).
- Chris Kirchner is under NDA and needs to be very careful what he is saying – there is no documentation backing up much of what he has said.
- Quantuma met with the Sports Minister this morning – was constructive.
- They are still confident, but it is ‘bloody hard work’
- They need fans to be respectful particularly when going to Middlesbrough –
the club is under greater scrutiny at present and has been charged with failing to control players. We do not want any further issues relating to fans behaviour.
- Quantuma remains cautiously optimistic, not understating the hurdles that have arisen, but prospective purchasers are still there and now Mel is helping.

[Andy_Faber]

......."shows how little people have thought about the complex nature of contracts these days"

Speak for yourself !!

Ok’….many people, notably those most vociferous on other social media platforms’

[Geoff Parkstone]

always the same - bigger the mouth, smaller the thought process

which reminds me, who has the highest number of posts on this site post the demise of the Rat

[Andy_Faber]

......."shows how little people have thought about the complex nature of contracts these days"

Speak for yourself !!

I’ve gone back through every ACTUAL pieces of correspondence (ie not media reporting or rumours) on this whole sorry palaver over the past few evenings, and my feeling is EFL may have overstepped their authority somewhere along the way and will only save DCFC if that fubar remains unexposed/unchallenged. I’d say that whether it was DCFC at risk or any other club

[Ramshank72]

Thanks for posting 'Amster.
"Legally they can compress the claims"
Is anyone kind enough, in simple terms, to explain what this means? I guess "they" is EFL?

[Geoff Parkstone]

always the same - bigger the mouth, smaller the thought process

which reminds me, who has the highest number of posts on this site post the demise of the Rat

[Geoff Parkstone]

Thanks for posting 'Amster.
"Legally they can compress the claims"
Is anyone kind enough, in simple terms, to explain what this means? I guess "they" is EFL?

absolutely no idea what it means; my guess is that its something the administrators can do though. Quite possible a typo, but not sure what for. Have only ever heard of it in the context of offsetting matched derivative trading contracts - which is unlikely relevant here.