Court Case / Move from Oakwell - Further BFCST Update

Thanks Paul. Considered and well written. Always felt that actually there was little discrepancy between any of the parties as to what the issues were. Most of the differing statements broadly said the same thing. Clearly there's disagreement on detailed legal points but I don't see any wild conspiracy. What I do know is lots of money poured in to rent and stadium maintenance impacts on platmying budgets.

 

What does this restrictive covenant prevent happening? if it's just preventing Oakwell becoming an housing estate / retail park what's the problem to the 80% mob unless of course it was their intention all along to buy Oakwell to bulldoze it

 

This is very worrying. I hope the club insider is going to be ok and hasn't risked their job for this.

 

A million quid a year maintenance costs? Oof.

 

SPECULATION TIME!

So the owners made a bad bargain in taking on a lease which has onerous maintenance provisions. They have the option to avoid these payments by buying the stadium, but are refusing to do so purportedly due to the existence of a troubling restrictive covenant which the Crynes may not have even been obliged to disclose and possibly should have been picked up during due diligence. The Crynes have obtained a QC's opinion stating it is unenforceable (presumably an annexation issue as it is pre-1926), and even if it were enforceable there would likely be the possibility of an application to have it discharged/modified for being obsolete/impeding reasonable use of the land given it is over 100 years old.

So from all of the above and the inferences that can be drawn, it would appear to me that the most likely situation is that the owners don't want to purchase the stadium. The covenant appears a minor issue all things considered, and likely could have been insured against if its existence had not been publicised by the owners. It therefore seems that the owners would rather continue to lease the stadium but are using the covenant issue as an excuse to withhold the owed money in an attempt to force the Crynes to vary the maintenance provisions within the lease.

 

The club statement claims the Crynes told them the third party wanted to exercise a right to buy Oakwell the Crynes in their various statements haven't even mentioned selling to anybody else
Also the covenant that everybody seemed to know about other than the 80% mob is only supposed to be about restricting the use of the land not giving the author of the covenant the right to first refusal If the land is being sold. Is there more than one covenant attached to Oakwell?
Maybe the trust could try to find out exactly what covenants are in force and what restrictions and or rights they give and who to.

 

If memory serves me right when the old coop ground ( which the training academy pitches now sit on ) was transfered to the clubs ownership the provision was that as long as the ground is used for sport theres no problem ....however should sport cease the land reverts back to the original owners ....which if memory serves me right. is the family who owned the brewery....hence a 3rd party involvement

 

This covenant business sounds suspicious to me. If there's a restrictive covenant then they should be able to ascertain whether or not it's enforceable fairly easily. If it was a really old one then it obviously wouldn't be, and they can afford lawyers who could deal with that, so I suspect (as somebody who has dealt with things involving covenants but am very much not a lawyer) that there's active interest from whoever retains some sort of power over it. And I can't think who that would be.

The thing that I probably find most alarming is that these international business masterminds Chien Lee and Paul Conway let themselves get into a situation in which their multi-million pound deal had unexpected legal ramifications which only came to light this long after the purchase was completed. Did they not bother employing a solicitor to do a couple of hundred quid's worth of searches before they put in a clause dealing with the ground? My own solicitor is a foul-mouthed grumpy old ******* called Ron, and he'd definitely have told me - in no uncertain terms - if any property involved in a contract I was signing had a problematic restrictive covenant on it. And god help the other party if they were trying to hide it. Maybe I should bring up his card next time we're allowed back into Oakwell.

 

This.

They were buying a business that was in administration within the last 20 years. If that didn't flag to them that they might have to ascertain very clearly who owns what etc then they are bigger fools than we already suspected.

 

What a complicated mess . Very short lease if it’s only 9 years what is left on it .

 

Firstly I would be interested in the maintenance costs that have been mentioned. If they bought the stadium share then I presume these costs would be still there. So it appears to me that the real issue is this cost and Cryne family’s non contribution. Not paying an agreed 3.5m seems unfair and illegal given it wasn’t tied to the stadium at all.

The purchase of the stadium seems to be something they don’t want, perhaps due to the maintenance costs. So It seems the covenant in my opinion is the excuse to firstly step aside from the purchase (hey that’s ok) and secondly to use as posturing of how they have been unfairly treated.

The Considered move to another stadium being public seems to me to be forcing the Crynes hand on contributing to maintenance. They have already contributed 2.5m of a reduced deal. I think it’s unlikely they will go elsewhere but if other clubs are looking for additional income it may be a possibility. The main factor is will our fans go with it to the new stadium?

Maybe there should be a trust owned by fans set up to buy Crynes share. People seem to want say in running the club maybe here is a first step.if i was the Crynes maybe I would donate a share of their stadium holding into a trust owned by fans, I would also state 50% of the outstanding payment from the ‘owners’ outstanding would go in once paid. That would put things in an interesting position.

 

I wonder if the complicating factor here is the way in which the Oakwell land is held? As I understand it the land is held by a company, namely Oakwell Community Assets Limited. The option to buy may therefore simply be an option to buy the 50% of the shares in OCAL held by the Crynes. OCAL would continue to own the land, but 50% of that company would be owned by the '80% mob'. BMBC appear to be willing to negotiate the sale of their interest in OCAL, but may be less willing to sell on terms which would negate the effect of the original restrictive covenant - which they may well see as safeguarding the interests of the wider community in ensuring the continuation of professional football being played at Oakwell. If BMBC were to insist on the terms of the original RC being re-stated in any new sale of their share of OCAL (or on a new similar RC being inserted) then there would be more likelihood of the new owners still being subject to those restrictions on use.

The above is purely speculation on my part, but if correct would help to explain why the old RC is still such an issue. BMBC would presumably have to be party to any attempt to remove the RC or negate it. From the new owners point of view, it can perhaps be understood why they would not wish to invest millions of pounds in outright ownership of Oakwell if their ability to do anything with it was restricted. Let's suppose for example that the Covid-19 situation persists and the professional game below Premier League level becomes unsustainable in it's present form. Would they not want to have the assurance that the land would have some value in alternative use if the worst happened? I speculate on this not to justify the owners' presumed view in any way, but purely to imagine how they might see the situation.

A temporary move away from Oakwell would presumably only receive EFL approval if it were part of a longer-term plan to re-locate. The track record of the new owners doesn't encourage belief in the idea that they would wish to expend money on forming any realistic plan to build a new stadium. And playing 'away' would presumably involve significant expense in it's own right, as well as alienating large sections of the fanbase. I wouldn't therefore place any great store on the utterances on this by the new owners and would see them merely as an attempt to put pressure on the Crynes and BMBC.

 

It’s been said before but I can’t resist restating it: even a fairly basic due diligence exercise undertaken by someone with only half an idea of what they’re doing would have picked up all these issues. It would have been so obvious to check the likely annual maintenance costs to add to the rent and arrive at the total annual cost.

 

maybe they did know about it at the outset.