Haven't been able to watch the meeting last night, but apparently one of the speakers said that we are 1.8 million in debt, and even if we go into admin that debt will not be reduced.

This is starting to be repeated as fact now.

Please can someone clarify if this is the case or not? Doesn't sound accurate to me.

My thoughts too. If creditors do agree to a CVA though, will around 90% of it get wiped?

Whoops sorry!

Was thinking the same about the debt.
Also what happens to contracts players/manager.

Like I said on another thread that statement is nonsense. Sadly some people do hang on their every word and a few are panicking.

Mike Lewis. Basically if we don't find money yes, it's simple as that, we need money in to the club, if we don't get money in, administration it is, and they after find money, because we after pay 100% of the bills, even in admin, but hopefully we will find investment

For those still in two minds, the above is the "information" they're faced with. Is there any way a very simple 5 point outline of how HUST works can be drawn up and posted in the usual places so at least the people who are on the verge of joining after last night, can have access to the information that will finally make them commit?

Did something happen at this meeting to cause the sudden amount signing up to the Trust?

As sage are the main creditor they will have a say on how much they are willing to accept if we enter administration, however they'd be lucky to recoup 10 pence in the pound.

If we cannot find a buyer to take on the debt before entering administration, why would someone offer to repay them the full debt plus have to pay administrators fees once we are in administration- Sage are going to have to take a massive hit one way or another, after all it was them who were conned by Coxall not any future buyers.

As I understand it he is technically correct in that if we go into administration then debts will continue to accrue at their full amount. It is upon exiting administration via a CVA that debts would then potentially be reduced to a smaller percentage but no CVA equals no reduction in debt.

the club is under contract with the player/agent
its up to the player how he plays it out

but the contract has been broken by the club

Once you’re put into administration an administrator will be appointed to run the club on a day to day basis and the current incumbents will relinquish all control.

The administrator is there purely to represent the interest of the creditors of the company and will run the business with the creditors in mind. His main objective is to ensure the club can be run as a going concern whilst trying to secure the best deal for the creditors. This will mean that all costs are cut where possible - players/assets sold and released (where possible considering contractual impacts) in order to try and keep the club going long enough for a buyer to be found. It is likely that players may be asked to defer wages to allow the club to continue to operate which may lead to players still in contract leaving. If players are not paid in a certain timeframe they can, at their request leave the club for nothing. Basically those that are decent enough to move to another club leave and you get left with the crap that can’t get a job elsewhere.

If the business cannot continue as a going concern the administrator has the power to wind up the company and liquidate it. This happed to us at Darlington where we just didn’t have the cash to continue to trade. The Trust £50K basically bought us some time for additional fundraising that eventually took us to the end of the season. The administrator will need to be paid out of these funds too. That’s why it’s vitally important that when you got into administration you have cash and/or the ability to quickly generate cash. I would not be putting a penny into the club whilst the current incumbents are in charge as it will disappear. Be warned.

In terms of exiting administration there are a few ways to do this however the FA will only allow you to be classed as a continuation of the same club if you come out of administration under a CVA (and transfer the football share) which the majority of creditors need to agree. Of course as it seems Sage are by far and away the major creditor just as our owner Raj Singh was which means that they are the single person who will accept or reject an offer (actually I’m sure I read that owner/director loans had been outlawed by the Conference shortly after our debacle). It’s easy to assume (as we did) that 2p in the pound would be more than the major creditor would get it the club was liquidated but if you have things like a % of future transfer fees then that may not be the case. If you do have future income into the club the administrator will cease trading but keep the company going until such a time that the fees are realised which will then be distributed amongst the creditors. In addition to this I believe should Hartlepool default on the loan to Sage they’d be able to claim tax relief so this may return them 20p in the pound if the club was wound up.

I believe these days that all football related debts have to be settled in full, as well as HMRC so even if a CVA of 10p in the pound is agreed any prospective buyer would need to repay in full, or commit to honour any existing player contracts and transfer fees owing as well as any money owed to HMRC.

The positive is that if the HUST has money when the club goes into administration the administrator is duty bound to consider an offer and it’s likely the financial accounts will at last be shared - provided the administrator has managed to get them in order

Very good summary cheers, the advice will fall on deaf ears though!

But were these classed as loans before they were accepted as members of the conference? It may be against conference rules but is it against football league rules?
They could say that they loaned HUFC £1m (for example) with staged payments, the day before they were admitted to the conference.
It wouldnt take much for them to knock up a postdated letter saying that this was the case.

Might be a stupid question but who chooses/appoints the Administrator?

I'm sure it will be sage assuming they hold a Debenture over the club as it will give them priority rights.

I'm making assumptions here but it's quite standard for a loan provider to take a Debenture over a company when they advance funds. This includes a Fixed and floating charge over the company ie. a charge over its assets as that is the collateral securing the loan. It also gives the holder preference as to who is appointed.

I'm sure Mr I has posted a copy of the Debenture in the past ?

I'm no accountant but have a little knowledge, just in case anything I'm stating here here is wrong

Very well explained Gums

So if the debt is £1.8m, all owed to Blackledge, then he would need to agree to whatever the deal is for a CVA to be approved.

If they are willing to accept (for example) 50%, then they don't need to wait for a CVA to agree this, they can do it at any time, as he is the only person who needs to agree. The only difference in agreeing via a CVA is that we get the points reduction and incur costs of the administrator. So going into administration wouldn't change anything for Sage, it would only put the club in a worse position, and be less attractive.

If Sage put the club in admin, then unless a white knight appears between admin and liquidation with a brand new acceptable offer, they obviously intend to liquidate the club rather than hand it over for nothing. Sending the bailiffs in to sell everything in the ground wouldn't even cover the costs of the administrator, given the ground is owned by the council.

The CVA would only reduce the £1.8m outstanding debt, which would start to accrue again immediately through us losing £130k per week unless costs are cut.

£130k per week?

ermm, per month...