The £750k and Khaled's Response

Great piece @Sheriff mate, the clarity and logic is superb.

However, I've known you for 40 years now and I don't think we've had a conversation in all that time that's gone on as long as that!!!

 

A very good point. Especially considering that Patrick sold half of our squad just before his death in order to give the club a healthy bank balance. One which has been completely wiped out by the £6m liability. That alone makes no sense for an intelligent man to do but it makes even less sense for a man who constantly put money IN to the club to decide to take it OUT after his death when he could quite easily have done so whenever he wanted to anyway.

 

Not even on those long coach trips / car journeys to away games? Surely Yeovil must have accounted for at least 10 minutes chat at some point, if only about their walk-on song by the Wurzels!

Just taken a call from someone calling herself Sue Gray, or something. She asked if I was free to help out with a small job she's working on at the moment.

 

If that's Dorian's sister I would be very wary.

 

Good work @Sheriff

 

@Loko the Tyke If there was a performance bonus of £6m, first of all, without going to the accounts, that would be massively disproportionate to the size of the deal and extremely hard to justify.

Referencing Oakwell Holding accounts there is a debtor of £4m at 30/11/18. If this payment were contingent on performance it would not be shown as a debtor as there would be uncertainty surrounding that payment.

So in short, yes, if that had been a performance bonus it would only show in accounts when it was relatively certain.

 

So for better words the 5 million in cash that was left in the club when the club was sold
was to be paid back to them the Crynes in 1 million pound instalments over 5 years.


6.2 million down payment plus five 1 million pound instalments ,adding up to 11.2 million for full payment of the 80 % of the club

That 5 million amount was lowered and deferred according to the Crynes chronicle statement because they the consortium ghosted them for a year and a half ,no payments were made on the agreed instalment plan (non-payment) in that period.
and when they eventually replied to him and told him they couldn't come up with the 1 million pound payment instalments.
.
he then made a decision to lower and defer the amount and instalment payments from 5 million in total to 3.5 million in total, to help them out in paying for the club
So 9.5 million all in

They then replied to this huge gesture of goodwill by attempting/ paying the payments out of the clubs money ,in essence you could say giving him his own money back
essentially paying 40 plus % of the cost of the deal with the clubs money.

Edited
Thanks to Archerfield

 

Thanks for the excellent analysis which if nothing else has prompted me to scurry off and look at the club's accounts**.

The obvious conclusion is that if the £3.5m was payable by the club and that final figure was agreed during the 2018/2019 season then the entire £3.5m sum should have been in the 2018/19 accounts spread across creditors greater and less than one year, consistent with the agreed payment profile.

There simply isn't any other acceptable accounting treatment, which, assuming the competency of both Zuk* and the external auditor (I have no reason to doubt), would mean that the £3.5m wasn't payable by the club. The fact that there's no mention at all in the clubs accounts of the £3.5m would suggest it wasn't a club liability.

I guess the worst of all possible scenarios is that it is payable by the club and therefore we're on the hook for another £2.75m and it could be argued (possibly by other clubs) that our prior year accounts understate our losses, amongst other worrying implications. The most likely scenario however would seem to be the one which you and others have inferred, ie that the 80%ers have (scandalously if so) diverted £750k from club resources to pay part of a liability arising to the Hong Kong BFC Investment Company.

What then puzzles me a little is why the Crynes aren't taking the legal action for £3.5m, not £2.75m. I can fully understand them not wanting to repay the £750k they have received but the fact they aren't pursuing it from the Hong Kong company could be seen to legitimise it originally being paid by the club. Moreover, you'd assume that there was a club Board meeting to adopt the accounts in which the £750k payment is shown at which James would have been present and it does seem a little odd that there is no mention of there being any dissent to the payment being expensed (even if James was outvoted by the 80%ers in practice).

All of which leaves still a boat load of uncertainties requiring clarification from across the ownership, with the added concern of the club now seemingly footing the defence costs for a legal claim against the Hong Kong company.

* - The role of Zuk is somewhat confusing to my brain. The fact that he was part of Oakwell Holdings and Barnsley Football Club at the same time when all this was happening means he was in the perfect (conflicted?) position to know who the debtor to OH is/was and what, if anything, to reflect in the club's accounts. Yet now, he is to my knowledge, only involved on the club side of things and so it is a bit worrying if he's not advised the 80%ers that the legal case is open and shut against them (he may have and it may just be them that are prolonging things).

** - Completely separate to the matter at hand one thing that I couldn't quite fathom which I know I should have but it's late is that in the 2020 accounts the balance sheet has opening debtors of £5.5m and closing debtors of £5.8m ie an increase of c. £0.3m but the note to the cash flow says that debtors increased by £5.9m. I'm telling myself it probably has something to do with the debtors relating to player sales but can't quite square it in my head at this hour.

 

I think that includes an extra million. it was £6.2 plus £1m pa over 5 years. This shows up in the accounts of OH as £7.2m plus £4m over 4 years.

 

Wow very impressed with that post.
Not sure that Conway is going to pull the wool over the eyes of little old BFC fans.
There should be demands now for the owners to come clean .
Where are you ?

 

Okay thanks
yeah i realised that when reread it.
It takes awhile and a few re-reads for us normal human beings to take it in ,even the dummies guide he he.

There is no good solution unfortunately it seems is there ?

If the consortium win they can literally do as they please the 2.75 million
even the initial down payment 6.2 could be clawed back using player trading and loans against TV etc.

And if the Crynes win the consortium would have to pay that money plus interest on the missed back payments, plus court costs
i do not believe they will ever pay those payments out of there own pockets
it wouldn't have been part of the investment strategy pitched to the investors..
Buying a distressed asset for as low price as possible , paying off as much of possible of the purchase price of that asset
the perfect outcome would be to own it for nothing

player trading is not the end game it is the means to the end game.
all this done by utilising player trading ,loans, and the monies received from the captive customer base who are incredibly unlikely to abandon there club for many reasons.

Football clubs are seen as castles of your hometown and have to be defended and never deserted at all costs
Mr Conway thinks and maybe its true has found a edge buying distressed asset football clubs because they will never lose there customers or enough of them to make a difference ,even if they do eventually turn against them it will be too late to make a difference to there strategy.

 

My recollection is that he resigned from the Oakwell Holdings role at around the time the legal dispute came to light, which is absolutely what you'd expect to happen once he became professionally conflicted between two opposing parties in a legal matter.

Other than that, I know relatively little about him. He's always remained largely behind the scenes at Oakwell. IIRC he worked for Gibson Booth prior to his appointment at BFC, and in recent years he's taken on additional responsibilities beyond the original finance remit of his role.

 

I think he said that there was A legal action against the club. Wasn't sure if that was referring to the Crynes (would that mean they are partially suing themselves?) or whether there's something else been brought against the club. Neither would surprise me, probably another £5m we owe Hull for sending them Angus MacDonald.

 

Fantastic piece @Sheriff, that saved me the job of writing something similar

 

Would the Bossman Q&A with the supporters trust have taken 2.5 hours?

 

I did actually draft a Bossman's Majority Report version of it, but had to reject it because it was too wordy. I couldn't bring myself to add any cuts to "It's all a bit s-hite, innit?"

 

Was yours " what a mess"?

 

Along them lines but thought it was a bit of a ramble