Club Future - Administration or bust?

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Wanderers head for court: But what are the possible outcomes?

Wanderers will once again walk up to the courtroom door at the glass-fronted Rolls Building in London not knowing what the future really holds.

It is three years since the club’s legal representative Hillary Stonefrost argued a series of stays of execution at the High Court to facilitate a takeover by Sports Shield BWFC, led by Dean Holdsworth and, eventually, Ken Anderson.

So much has happened since, and yet it can be argued that the threat to the club’s future as they defend a sixth winding-up petition in 16 months this morning is greater than ever before.

A tax bill of £1.2million has forced this matter to court but such is HMRC’s notoriously vigorous pursuit of such debts that it is entirely possible they will highlight recent financial problems and demand the court liquidate Bolton’s assets, rather than take them into administration and look to salvage their debt another way.

Whether a judge can be convinced to allow Wanderers extra time to find a buyer, find someone willing to fund the administration, or just get the bill paid outright, will all be answered at some stage today.

It is six years since Aldershot became the last member of the EFL to go into administration. The same club can recount the horrors of being liquidated and forced to resign in 1991/92, all their season's results expunged.

Such cataclysmic scenarios were being played out yesterday by the most pessimistic Wanderers fans. Though the prospect of a white knight riding in to save the club such embarrassment still looked a distant prospect as The Bolton News went to press last night, the events of 2016 do show that strange things can happen in the final hours before a hearing.

Back then a solicitor's letter which arrived just 30 minutes before legal representatives locked horns in the courtroom saved Wanderers from the worst-case scenario and gave the judge confidence to award an extension.

With that in mind, perhaps some solace can be taken from a club statement issued yesterday afternoon which officially confirmed that talks had ended with one buyer – almost certainly the Football Ventures consortium - but that others were in the vicinity.

“Bolton Wanderers Football Club can confirm that discussions with one of the interested parties have now been mutually terminated,” the statement read.

“The Club can also confirm that discussions are ongoing with other parties.

“A further update will be made in due course.”

No reasons have been supplied by the FV consortium on why they had given up their pursuit, having once been just hours from completion. The news coincided, however, with League Two Forest Green confirming they had started legal action to reclaim lost earnings in the collapsed Christian Doidge deal.

Rovers chairman Dale Vince had said back in January: "Bolton entered into a contract to loan and then buy Christian last August without the means to honour it.

"They haven't even paid his wages for the past four months - we have.

"We've taken the decision to recall him after his loan agreement expired last week.

"Anderson made a lot of promises on the last day of the transfer window, both to Christian and FGR, and has kept none of them.

"This is all his work and from talking to Ken he feels immune from the consequences - but some of these promises are written in legally binding contracts, and we'll be pursuing them."

Dale’s six-figure claim is one of several hidden problems which are reported to have been uncovered in recent weeks, with one source claiming more than £10m of unexpected creditors have been unearthed.

Should Wanderers seek an extension, Anderson will have to prove to the court that negotiations with a new party have progressed to a sufficient stage.

No-one other than the FV consortium has managed to do due diligence, however, so any buyer willing to step in at this late stage would be taking a significant gamble.

The EFL has indicated that it will help broker and smooth the way for anyone who comes forward but having got so close to the finishing line, last-minute negotiations with the FV consortium may be Wanderers and Anderson's only hope.

In recent weeks the prospect has been mooted that one of the major stakeholders could act and put the club into administration - but that act now rests in the hands of a judge and HMRC.

Just as in 2016, this morning's court process could be a blink-and-you'll-miss-it affair. Hundreds of cases will be heard and waved through - including Macclesfield Town - but the impact of the decision on a founder member of the league with 145 years of history behind it will be considerable.

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Nothing will come of any of this.

wanderlust wrote:"with one source claiming more than £10m of unexpected creditors have been unearthed"


Sadly my "completely unfounded suggestions that "Mr Anderson" may be pawning the club's assets" may have some truth about them, but we'll see.


One thing is for sure: the day that we finally get to the truth about Anderson's tenure is fast approaching and that will be the day that the accounts are finally published.

Lusty,


Don't put too much faith in the Accounts, not because they will be manipulated but because they are a statutory reporting statement which  must obey the disclosure requirements laid down in law.
Whether a liability is certain, probable or remote is a matter of judgement. For example Dale's claim for damages might not pass the test for disclosure if the auditors feel that it is remote. Additionally any liabilities created since the year end won't be there simply because they happened after the year end. Thus the latest creditors such as police, ambulance, caterers ,etc., if the liability did not exist at the balance sheet date, then no mention of them will appear in the Accounts.
So don't expect that all will become clear- because it won't.
As I mentioned earlier- look for an audit qualification and that will be a more serious litmus test of the ability of the club to survive.

Listening to Simon Jordan on TalkSport this morning, and his view is that we'll be ok today.

Pretty dismissive of Anderson though.

rammywhite wrote:

wanderlust wrote:"with one source claiming more than £10m of unexpected creditors have been unearthed"


Sadly my "completely unfounded suggestions that "Mr Anderson" may be pawning the club's assets" may have some truth about them, but we'll see.


One thing is for sure: the day that we finally get to the truth about Anderson's tenure is fast approaching and that will be the day that the accounts are finally published.

Lusty,


Don't put too much faith in the Accounts, not because they will be manipulated but because they are a statutory reporting statement which  must obey the disclosure requirements laid down in law.
Whether a liability is certain, probable or remote is a matter of judgement. For example Dale's claim for damages might not pass the test for disclosure if the auditors feel that it is remote. Additionally any liabilities created since the year end won't be there simply because they happened after the year end. Thus the latest creditors such as police, ambulance, caterers ,etc., if the liability did not exist at the balance sheet date, then no mention of them will appear in the Accounts.
So don't expect that all will become clear- because it won't.
As I mentioned earlier- look for an audit qualification and that will be a more serious litmus test of the ability of the club to survive.

The balance sheet doesn't really lie if it's been signed off by the auditors does it? After all it is a snapshot of the club's value on a particular day, a specific moment in time but with caveats.
Sure the business could go out and borrow a load of money the next day, but that creates both income in the form of the money borrowed and expenditure in the form of a debt to the same value.
I think what you are talking about is the (well used) scenario of having received a service but the bill for it has not yet come in and therefore doesn't appear in the accounts, but should be mentioned as an unrecorded liability for audit purposes (accruals and deferrals) 
What I'll be looking for is the impact of the whole of Anderson's tenure - a period long enough for the birds to come home to roost and the bottom line for me is that he took over a business with a balance of over £42 million and according to his own figures this had shrunk to £38 million in his first year, since when nothing has been filed.
What we also know is that any potential buyer will want to know about any unrecorded liabilities - which is probably where this alleged £10 million figure came from - and the reason why the buyer walked. We also know that if in the event of a miracle happening and somebody buys us, there's a strong chance they'll file asap to publicly baseline the acquisition and that will include all liabilities, so one way or another we'll get a pretty good idea of how much value Anderson has squandered.
We can then compare that to the estimated cost of administration in 2016 and will finally be able to answer the question "did Anderson "save" the club or did he just f*** us over" with some degree of clarity.

He (Simon Jordon) backs up what Howard (expert? on Wanderersway says will happen if Liquidation is the outcome). I pray Howard is not a Loon he talks a lot of sense here's hoping.

Simon Jordan is apparently one of the interested parties so that's not a surprise.

So, we survive.

BN says there is a buyer willing to clear the debts.

Wanderers survive. And there appears to be a buyer in play.

Could be a new bidder as well, wonder who it is?

Adjourned until April 3rd.

wanderlust wrote:

rammywhite wrote:

wanderlust wrote:"with one source claiming more than £10m of unexpected creditors have been unearthed"


Sadly my "completely unfounded suggestions that "Mr Anderson" may be pawning the club's assets" may have some truth about them, but we'll see.


One thing is for sure: the day that we finally get to the truth about Anderson's tenure is fast approaching and that will be the day that the accounts are finally published.

Lusty,


Don't put too much faith in the Accounts, not because they will be manipulated but because they are a statutory reporting statement which  must obey the disclosure requirements laid down in law.
Whether a liability is certain, probable or remote is a matter of judgement. For example Dale's claim for damages might not pass the test for disclosure if the auditors feel that it is remote. Additionally any liabilities created since the year end won't be there simply because they happened after the year end. Thus the latest creditors such as police, ambulance, caterers ,etc., if the liability did not exist at the balance sheet date, then no mention of them will appear in the Accounts.
So don't expect that all will become clear- because it won't.
As I mentioned earlier- look for an audit qualification and that will be a more serious litmus test of the ability of the club to survive.

The balance sheet doesn't really lie if it's been signed off by the auditors does it? After all it is a snapshot of the club's value on a particular day, a specific moment in time but with caveats.
Sure the business could go out and borrow a load of money the next day, but that creates both income in the form of the money borrowed and expenditure in the form of a debt to the same value.
I think what you are talking about is the (well used) scenario of having received a service but the bill for it has not yet come in and therefore doesn't appear in the accounts, but should be mentioned as an unrecorded liability for audit purposes (accruals and deferrals) 
What I'll be looking for is the impact of the whole of Anderson's tenure - a period long enough for the birds to come home to roost and the bottom line for me is that he took over a business with a balance of over £42 million and according to his own figures this had shrunk to £38 million in his first year, since when nothing has been filed.
What we also know is that any potential buyer will want to know about any unrecorded liabilities - which is probably where this alleged £10 million figure came from - and the reason why the buyer walked. We also know that if in the event of a miracle happening and somebody buys us, there's a strong chance they'll file asap to publicly baseline the acquisition and that will include all liabilities, so one way or another we'll get a pretty good idea of how much value Anderson has squandered.
We can then compare that to the estimated cost of administration in 2016 and will finally be able to answer the question "did Anderson "save" the club or did he just f*** us over" with some degree of clarity.

I don't want to go into a technical discussion about  all of this but essentially it's about in-year events and after balance sheet date events and that is quite technical, going well beyond any discussion of accruals.  Even if a pre- balance sheet service has been rendered without an invoice being received that would be part of a purchases provision and included in the Accounts
The balance sheet doesn't lie because  what's in it is what corporate law says what should  be in it although many of the values are challengeable particularly for non current assets. Its what's NOT  in it  that is important and that's why its an incomplete residual statement.
  If a business went out and borrowed a load of money it would certainly form an income but not necessarily an expenditure as it might simply not spend the money.
All  of this  stuff reflects the fact that I've been an FCA for over 40 years and prepared and signed off hundreds of audit reports and so technically I have a vey deep knowledge of all of this.
 It probably bores the backside off most people on here so lets draw a line under the discussion and then see what the Accounts actually say.

Well at least we live to fight another day.

What a surprise.... Nothing came of it

Interesting that it was revealed the "buyer" already owns shares in another club.

Probably a fan who bought 1 share in man united.

What a surprise Wanderlust believes he knows more about accountancy than someone who has been a professional one for over 40 years.

To be fair to him though I do hope he is right about Ron Billionaire (or any other very rich investor) buying us - we all would rather that happen than not.