ALK Capital or Farnell/Elkashashy takeover

[TsarBomba]

Normal to be fair.

The Americans want to grow the revenue streams and one way to do that is to push the global marketing as you know.
That's gonna attract fans, but there will always be a core group who will have an old fashioned mentality about fans and where they come from.

Yep.

There was a lady who used to sit 3/4 seats along from me in JMU, who would sneer at the walk ons whenever it was a big game. She would take a perverse pleasure in being one of the sub 10k on a Tuesday night.

The near constant reminder on here of the Orient game, despite it being 30+ years ago, and having zero relevance to today, is a real indicator of the mentality of a portion of our supporter base.

[Tall Paul]

"Where has it been established that the club is £90m worse off"?

Where?

That is what the article in The Guardian with the title "Burnley - US takeover has left club £90m worse off and loaded with debt" seeks to explain. Not just £90 million worse off but plus the added interest.

So where has that £90m gone? It hasn't gone to MG & Co as their net worth hasn't changed.

The article's calculations are missing the amount that ALK is obligated to repay back to the club.

[Jacko]

One of the lines of argument I find oddest,.from.some, is those saying "We've seen no evidence of X, just some reports in the media". Bit Trumpian that. Same sort of argument as those who say, "name your source" when journalist write stories elsewhere (depressingly this is all over social media) as they look to discredit any information at all.

Believe it or not, but most journalists look to report accurately the majority.of the time.

While there may be other factors not yet reported on, I have seen no substantial rebuttal of the general thrust of stories in the Guardian, Atlantic and others questioning how this takeover has been funded.

[Goddy]

To the clever accountant-types, like Paul Waine, chester perry and a few others, I have a question regarding the ALK takeover.

My understanding is that assets in a business belong to ALL the shareholders (proportionate to their shareholding, of course). If this is the case, and the chat about ALK using BFC assets i.e. the cash at bank and in hand, how can any assets be taken out of a business and then given to a group of shareholders (Garlick and other directors who sold shares) without other shareholders receiving similar? I assume what has happened in the takeover is legal but just don't see how some shareholders can be given funds/assets from a business without ALL shareholders being given the same.

Answers on a postcard, please.

Thanks

PS Mods - please merge this with whichever relevant thread, please, as and when. Just wanted this question not to be overlooked for now (Sorry to other message board users for my selfishness in starting a new thread on this)

[ClaretAndJew]

Isn't it because they haven't bought ALL the shares, just enough to take a controlling stake of the business?

[matucana]

"Made the same point I have - Pace's praise of Dyche is up there with the Ewoks and C3PO. He absolutely had to get him on side, it is now the way Dyche uses this that is the worry."



Has already started by ensuring four contract extensions unlike last year when nothing happened and Bardsley was belatedly granted a year's extension.
Squad harmony is crucial at this point.

[Steve-Harpers-perm]

It’s wasn’t just fans on social media. It was the manager at every available press conference over the past year or 2. Constantly undermined.

If he was having his feelings hurt that much and being undermined by an employee he should have done something about it. Like I said let’s not make out he’s had a torrent load of abuse while in charge.

[Tall Paul]

One of the lines of argument I find oddest,.from.some, is those saying "We've seen no evidence of X, just some reports in the media". Bit Trumpian that. Same sort of argument as those who say, "name your source" when journalist write stories elsewhere (depressingly this is all over social media) as they look to discredit any information at all.

Believe it or not, but most journalists look to report accurately the majority.of the time.

While there may be other factors not yet reported on, I have seen no substantial rebuttal of the general thrust of stories in the Guardian, Atlantic and others questioning how this takeover has been funded.

Unless these journalists have access to the sale agreement, bank accounts or accounts of the companies in question it can only be speculation. Of course the sources they are using could have that access, but they're unnamed so we can't know for sure.

[Chester Perry]

People saying we shouldn't be concerned let alone talk about it need to go for a serious walk on their own.

I do not recall seeing anyone saying we shouldn't be concerned, the thing I have taken from this is that many people (if not all) are concerned by the risk taken, to apparent advantage of the new owners. a number are prepared to wait to see what the club will gain from their experience, knowledge and expertise and preparedness to take risks that the previous owners would not (though the previous owners did engage in a lot of risk during their tenure, just not the ones a number wanted them too).

I am still still trying to work out whether two previous attempts to develop a franchise/club by Checketts is a good sign for the club, he did improve many things in both, but ultimately was side lined through a lack of actual money. The 2nd (in which Pace was involved for a time) was a better attempt than the first so we have to hope many more lessons have been learned. The concern though is that those were heavily regulated franchises with no relegation to threaten revenues. It is important to remember that the majority of ultimately successful entrepreneurs previously had failures, that end up sharpening their ability to succeed, it is the determination to try and try again that often singles them out.

[Darthlaw]

One of the lines of argument I find oddest,.from.some, is those saying "We've seen no evidence of X, just some reports in the media". Bit Trumpian that. Same sort of argument as those who say, "name your source" when journalist write stories elsewhere (depressingly this is all over social media) as they look to discredit any information at all.

Believe it or not, but most journalists look to report accurately the majority.of the time.

While there may be other factors not yet reported on, I have seen no substantial rebuttal of the general thrust of stories in the Guardian, Atlantic and others questioning how this takeover has been funded.

Alan Pace Man U programme notes.

"While the details and figures quoted by some sections of the national media are wide of the mark, I realise that some supporters may worry about the impact the takeover may have on the club’s cash reserves.

"I would like to reiterate, with a hand on my heart, that our financial approach is reasonable and sustainable for the club. The directors and I are committed to continuing the club’s growth and demonstrating financial stability over the long-term."

I would consider the bit in bold to be a substantial rebuttal, personally. So you're either saying that he's lying or the journalists without sources are.

Right now, I'm keen to offer him the benefit of the doubt.

[Chester Perry]

"Made the same point I have - Pace's praise of Dyche is up there with the Ewoks and C3PO. He absolutely had to get him on side, it is now the way Dyche uses this that is the worry."



Has already started by ensuring four contract extensions unlike last year when nothing happened and Bardsley was belatedly granted a year's extension.
Squad harmony is crucial at this point.

and whose to say most of the meat in those negotiations was not cooked before the end of December

[Elizabeth]

So where has that £90m gone? It hasn't gone to MG & Co as their net worth hasn't changed.

The article's calculations are missing the amount that ALK is obligated to repay back to the club.

Hi Paul

Is this the club’s capital we have been told the club have lent to the Americans.
Do you know what effect it will have on the club if the Americans are unable to repay their other loan(s) that have not come from the club?
Could we have a situation that the club pays the Americans huge sums as salaries that the Americans can use to pay off both their loans to the club and their loans to the other parties , effectively meaning the club is paying off all their loans ?
Please be kind as I ask you in the belief you know more than me and I’m upset the club’s capital has been used in this way and concerned the Americans are going to take loads of money out of the club in return for their expertise

[Chester Perry]

I answered this on the takeover thread last night

Articles of association changed "So, company can now give ‘financial assistance’ to another for or connected to the purchases of shares in company."

https://twitter.com/TheFootballLaw/stat ... 5005728768

I interpret that as allowing the club money to used to buy shares off the old board by lending to one of Velocity, Kettering or Calder Vale

full articles are here
https://find-and-update.company-informa ... ng-history

so nothing new just confirmation that what has been reported is allowed by the articles of association - the change so soon after takeover effectively confirms the action

you have to remember that ALK now control 84% of shares, they have the power to do anything at the club within the bounds of law

[dsr]

Where has it been established that the club is £90m worse off? And how have MG and co had the benefit of that given that there won't have been any change in their net worth as a result of the transaction?

That would be an interesting argument for the taxman when he comes to assess the Capital Gains Tax. I suspect it wouldn't work.

You're taking this argument to an extra step of absurdity even beyond Godisadeejay. I think even he recognises that having £90m put into your bank account is a good thing.

[kentonclaret]

"While the details and figures quoted by some sections of the national media are wide of the mark"

Not a substantial rebuttal at all since the statement refers specifically to "SOME SECTIONS OF THE NATIONAL MEDIA."

This implies that other sections of the media are not wide of the mark at all.

It's all in the wording.

[Goddy]

I answered this on the takeover thread last night



you have to remember that ALK now control 84% of shares, they have the power to do anything at the club within the bounds of law

Thanks for coming back to me on this, chester. Sorry, I obviously didn't quite follow your reply on the other thread and understand the implications of it, although I did read it.

So, it seems a board of directors can effectively allow another party to use the funds of the original company (in this case BFC) to fund a buy out and ignore other shareholders as long as enough shareholders vote for this??!! Wow. Whilst this seems as though it might not be illegal it does strike me as being unethical if this is what's happened. Directors are there to look after the interests of ALL shareholders in company law, I believe. The argument supporting this takeover in this way is that Mr Garlick will likely say something like 'this action IS in the best interests of all shareholders as it provides ongoing stability blah blah blah'.

[Tall Paul]

That would be an interesting argument for the taxman when he comes to assess the Capital Gains Tax. I suspect it wouldn't work.

You're taking this argument to an extra step of absurdity even beyond Godisadeejay. I think even he recognises that having £90m put into your bank account is a good thing.

That's the whole point, It's a capital gain, not revenue. They've crystallised the asset that they already owned. I'm sure you know that somebody's net worth isn't just their cash in the bank. I don't think I ever said that having the cash in their bank account isn't a good thing, but it isn't a distribution of profits and the club hasn't lost the value of that cash, it's been converted to another type of asset.

If the club is worth £90m less we'll see that in the relevant set of accounts won't we?

[Goddy]

PS thanks for your replies C&J and chester.

Mods please merge threads, if you don't mind........

[Dixie Normous]

The issue is, you're not a real Burnley fan (you admitted you switched from Liverpool in 2010), you will just never quite get it. If it all goes wrong, you will just go back to supporting Liverpool which for most people on here isn't a choice.

Ah now his talking crap makes sense, he is no claret

[Tall Paul]

Hi Paul

Is this the club’s capital we have been told the club have lent to the Americans.
Do you know what effect it will have on the club if the Americans are unable to repay their other loan(s) that have not come from the club?
Could we have a situation that the club pays the Americans huge sums as salaries that the Americans can use to pay off both their loans to the club and their loans to the other parties , effectively meaning the club is paying off all their loans ?
Please be kind as I ask you in the belief you know more than me and I’m upset the club’s capital has been used in this way and concerned the Americans are going to take loads of money out of the club in return for their expertise

I haven't seen the relevant agreements either so can't answer in any great detail, but yes ultimately I expect that the club will end up paying off ALK's borrowings. Whether that's when they eventually sell the club or as an ongoing thing, I don't know.

The hope is that they can generate enough additional revenue to do so without ending up like one of the basket case clubs in the lower leagues. Big risk imo.

[Darthlaw]

Fair play.

You're willing to take the word of the journo (with no source and a motive to drive clicks to his site) over the man who denys it and knows that the finances will be on public record within 12-18 months.

Agree to disagree.

[kentonclaret]

Their proposal appears to be similar to the Brentford model of identifying and signing players with potential at an early stage (Ollie Watkins from Exeter for example) and then developing and selling on at a huge profit.

This is where Alan Pace claims to have algorithms and software expertise at his disposal.

Is Sean Dyche the right manager for this type of enterprise?

[Chester Perry]

Thanks for coming back to me on this, chester. Sorry, I obviously didn't quite follow your reply on the other thread and understand the implications of it, although I did read it.

So, it seems a board of directors can effectively allow another party to use the funds of the original company (in this case BFC) to fund a buy out and ignore other shareholders as long as enough shareholders vote for this??!! Wow. Whilst this seems as though it might not be illegal it does strike me as being unethical if this is what's happened. Directors are there to look after the interests of ALL shareholders in company law, I believe. The argument supporting this takeover in this way is that Mr Garlick will likely say something like 'this action IS in the best interests of all shareholders as it provides ongoing stability blah blah blah'.

I suspect inter-company loans like this are quite common - think of a partnership business where one want's out (divorce/retirement) but has no interest in dissolving the company, this allows them to be paid up whilst allowing a remaining shareholder(s) to keep the business going - in a leveraged buyout it is often a logical option.

The difficulty for us comes because we are so emotionally engaged in the club we believe it to be ours - which relates to a another post I put on the takeover thread

I am one of that majority, but I will admit that is because I feel the fans are the ones that own the club, they do not in any legal or commercial sense. The fans are and always will be the last resort to preserving a clubs existence though, whether they take a share of ownership or not and that is the distinction between football (or sports clubs in Europe) and and everyday business.

[Mala591]

No 1 priority should be to headhunt the entire Brentford scouting team and offer to increase their salaries by 50%

[dsr]

That's the whole point, It's a capital gain, not revenue. They've crystallised the asset that they already owned. I'm sure you know that somebody's net worth isn't just their cash in the bank. I don't think I ever said that having the cash in their bank account isn't a good thing, but it isn't a distribution of profits and the club hasn't lost the value of that cash, it's been converted to another type of asset.

If the club is worth £90m less we'll see that in the relevant set of accounts won't we?

And you've got the point as well. As you say, the club used have converted £90m of cash (positive and negative) into another kind of asset - an interest-free loan from a company that has no cash and which is likely not to be able to pay it back.

Which is better? Cash, or a dodgy loan? Can we use that interest-free loan to buy players, or to do up the ground? Can we be sure it will be worth £90m in the end? It's a rotten deal. If you seriously believe that this loan is as good as money in the bank, then perhaps I could look after your money in the bank for you.

PS - the argument that it is a good thing but not a benefot for Garlick and KohnB - it's nitpicking again. It's irrelevant to the real world issue.

[Chester Perry]

No 1 priority should be to headhunt the entire Brentford scouting team and offer to increase their salaries by 50%

The scouting team that makes heavy use of the technology developed and owned by the Brentford owners other business?

[aggi]

To the clever accountant-types, like Paul Waine, chester perry and a few others, I have a question regarding the ALK takeover.

My understanding is that assets in a business belong to ALL the shareholders (proportionate to their shareholding, of course). If this is the case, and the chat about ALK using BFC assets i.e. the cash at bank and in hand, how can any assets be taken out of a business and then given to a group of shareholders (Garlick and other directors who sold shares) without other shareholders receiving similar? I assume what has happened in the takeover is legal but just don't see how some shareholders can be given funds/assets from a business without ALL shareholders being given the same.

Answers on a postcard, please.

Thanks

PS Mods - please merge this with whichever relevant thread, please, as and when. Just wanted this question not to be overlooked for now (Sorry to other message board users for my selfishness in starting a new thread on this)

They haven't taken any assets out in an overall sense. If they've taken cash out it's been replaced by a debt that someone, most likely one of the group companies, owes that money to the club.

[Mala591]

The scouting team that makes heavy use of the technology developed and owned by the Brentford owners other business?

I don’t know about that Chester can you explain

[Tall Paul]

And you've got the point as well. As you say, the club used have converted £90m of cash (positive and negative) into another kind of asset - an interest-free loan from a company that has no cash and which is likely not to be able to pay it back.

Which is better? Cash, or a dodgy loan? Can we use that interest-free loan to buy players, or to do up the ground? Can we be sure it will be worth £90m in the end? It's a rotten deal. If you seriously believe that this loan is as good as money in the bank, then perhaps I could look after your money in the bank for you.

PS - the argument that it is a good thing but not a benefot for Garlick and KohnB - it's nitpicking again. It's irrelevant to the real world issue.

What is the real world issue?

You keep saying the club has lost £90m (or whatever) in value when it hasn't. And we don't know that this loan (if it exists) is interest free, in fact I think it's unlikely as then we're into the realm of treating it as a distribution.

[KateR]

And you've got the point as well. As you say, the club used have converted £90m of cash (positive and negative) into another kind of asset - an interest-free loan from a company that has no cash and which is likely not to be able to pay it back.

Which is better? Cash, or a dodgy loan? Can we use that interest-free loan to buy players, or to do up the ground? Can we be sure it will be worth £90m in the end? It's a rotten deal. If you seriously believe that this loan is as good as money in the bank, then perhaps I could look after your money in the bank for you.

PS - the argument that it is a good thing but not a benefot for Garlick and KohnB - it's nitpicking again. It's irrelevant to the real world issue.

I'll give you some of my money to look after if you can provide me with a sound business plan, that shows how you are going to grow it and what return and benefits I will get from you looking after my money, plus of course I will want some form of guarantee such as the deeds to your home. This is money I have in a bank account which is earning less than 1% interest per annum at the moment.

[Chester Perry]

I don’t know about that Chester can you explain

He was a professional gambler, then saw an opportunity to use his approach to sell his analysis to betting companies and syndicates, it formed the basis of his approach with his Danish club and now Brentford, the Brighton owner has a similar background

It is all well documented if you use the web

[Chester Perry]

And you do one as well,

and to think I fulfilled all the list apart from buying a shirt for 35 years and having no one dumb enough to be arrested for football violence

[dsr]

I'll give you some of my money to look after if you can provide me with a sound business plan, that shows how you are going to grow it and what return and benefits I will get from you looking after my money, plus of course I will want some form of guarantee such as the deeds to your home. This is money I have in a bank account which is earning less than 1% interest per annum at the moment.

So if I my business plan that was based on Burnley not getting relegated, and I told you that you would get no capital growth, no benefits, and no income from the loan, and I haven't any assets that I can use to guarantee it with - then you would turn me down? Even if I said I would do my very best to give you your money back one day if my ship comes in?

[Tall Paul]

PS - the argument that it is a good thing but not a benefot for Garlick and KohnB - it's nitpicking again. It's irrelevant to the real world issue.

PS - That wasn't my argument. It's only a good thing for them if they believe that they can't increase the value of their investment any further and would rather have the cash now.

[dsr]

What is the real world issue?

You keep saying the club has lost £90m (or whatever) in value when it hasn't. And we don't know that this loan (if it exists) is interest free, in fact I think it's unlikely as then we're into the realm of treating it as a distribution.

Loans between group companies aren't treated as distributions and wouldn't be taxable if they were.

The club's balance sheet will still show a £90m debtor for as long as we are in the PL. But that's not the same as saying it's worth as much as cash. If, for example, we were to make a bid of £20m for a player and offer the selling club £20m cash, they might go for it. If we were to offer them a share in this loan debtor, I think the answer would be different.

[Chester Perry]

So if I my business plan that was based on Burnley not getting relegated, and I told you that you would get no capital growth, no benefits, and no income from the loan, and I haven't any assets that I can use to guarantee it with - then you would turn me down? Even if I said I would do my very best to give you your money back one day if my ship comes in?

I think we are all interested in how they plan to grow the revenues, being knowledgeable about the fact that most of the average fans are not that able/willing to put even more of their money into the club

[Tall Paul]

Loans between group companies aren't treated as distributions and wouldn't be taxable if they were.

They can be, especially if they're interest free and/or if they're used to buy shares.

The club's balance sheet will still show a £90m debtor for as long as we are in the PL. But that's not the same as saying it's worth as much as cash. If, for example, we were to make a bid of £20m for a player and offer the selling club £20m cash, they might go for it. If we were to offer them a share in this loan debtor, I think the answer would be different.

So the club hasn't lost £90m in value then. Glad we've cleared that up.

[KateR]

So if I my business plan that was based on Burnley not getting relegated, and I told you that you would get no capital growth, no benefits, and no income from the loan, and I haven't any assets that I can use to guarantee it with - then you would turn me down? Even if I said I would do my very best to give you your money back one day if my ship comes in?

and you think this was the ALK business plan?

[dsr]

So the club hasn't lost £90m in value then. Glad we've cleared that up.

I think you might be struggling with the concept of "value".

If you were offered the choice of two buckets - one with £10,000 cash in it, one with a piece of paper from someone with no cash promising to pay you £10,000 one day - and told to pick the more valuable prize - which would you have? The majority of us would go for the cash as having more value.

[dsr]

and you think this was the ALK business plan?

That appears to be what ALK is offering to BFC. Any growth in the club's value will be of benefit to ALK. Any loss in the club's value will cost ALK nothing, but the club will suffer.

[Tall Paul]

I think you might be struggling with the concept of "value".

If you were offered the choice of two buckets - one with £10,000 cash in it, one with a piece of paper from someone with no cash promising to pay you £10,000 one day - and told to pick the more valuable prize - which would you have? The majority of us would go for the cash as having more value.

Your silly analogies are tiresome.

If the club has lost this value, explain how the accounts will reflect this and how the auditors will sign them them off as true and fair if they don't.

[Tall Paul]

That appears to be what ALK is offering to BFC. Any growth in the club's value will be of benefit to ALK. Any loss in the club's value will cost ALK nothing, but the club will suffer.

How will it cost them nothing? They have an obligation to repay the money they have borrowed, they can't just write it off without any consequences. It'll cost them whatever they've already put in for a start.

[aggi]

Alan Pace Man U programme notes.

"While the details and figures quoted by some sections of the national media are wide of the mark, I realise that some supporters may worry about the impact the takeover may have on the club’s cash reserves.

"I would like to reiterate, with a hand on my heart, that our financial approach is reasonable and sustainable for the club. The directors and I are committed to continuing the club’s growth and demonstrating financial stability over the long-term."

I would consider the bit in bold to be a substantial rebuttal, personally. So you're either saying that he's lying or the journalists without sources are.

Right now, I'm keen to offer him the benefit of the doubt.

Personally I don't read that as a strong rebuttal, it reads to me that the substance of the stories are correct but obviously each to their own. There is plenty of evidence out there that suggests the basis of the stories is correct: the MSD security, similar MSD loans to benchmark, the amended articles, etc. There's a significant grey area between the stories not being 100% correct and being guff.

It's also worth considering the calibre of journalists running those stories. They're all well known journalists with solid reputations in sports and business writing. They probably have more of a reputation to lose than Pace does.

[ClaretAndJew]

How will it cost them nothing? They have an obligation to repay the money they have borrowed, they can't just write it off without any consequences. It'll cost them whatever they've already put in for a start.

If they don't pay then Garlick and co just revert back to owning the club, right?

[KateR]

That appears to be what ALK is offering to BFC. Any growth in the club's value will be of benefit to ALK. Any loss in the club's value will cost ALK nothing, but the club will suffer.

this is the issue when people use weasel words like, appears; same with many others sprinkled across many posts here, if, should, could, perhaps, maybe, etc.

What they really mean when you interpret them is "I don't know".

You can also include many well know weasel phrases, such as but not limited to "best endeavors", it's why we don't like them in contracts because they are "get out of" clauses.

Therefore, we are back to a line in the sand again because it's about opinions and guesses, WAG or SWAG through interpretation as to what the person wants to believe. I would categorically deny that is what ALK is offering, but that is just my opinion but it's based on a belief that a company such as the lenders would never agree to sign on, but I certainly can't prove that.

[Tall Paul]

If they don't pay then Garlick and co just revert back to owning the club, right?

We don't know without seeing the agreement, but that appears (sorry Kate!) to be the case from the press reports.

Edit: Actually I think that's if they don't pay the installments due to MG and co, not if they don't repay the money they've borrowed from the club.

[dsr]

Your silly analogies are tiresome.

If the club has lost this value, explain how the accounts will reflect this and how the auditors will sign them them off as true and fair if they don't.

I'm just trying to get you past the idea that "value" is represented only by a number on a balance sheet. Take it from me - £90m in hand is worth more than £90m in loans from someone who doesn't have any money.

[Paul Waine]

To the clever accountant-types, like Paul Waine, chester perry and a few others, I have a question regarding the ALK takeover.

My understanding is that assets in a business belong to ALL the shareholders (proportionate to their shareholding, of course). If this is the case, and the chat about ALK using BFC assets i.e. the cash at bank and in hand, how can any assets be taken out of a business and then given to a group of shareholders (Garlick and other directors who sold shares) without other shareholders receiving similar? I assume what has happened in the takeover is legal but just don't see how some shareholders can be given funds/assets from a business without ALL shareholders being given the same.

Answers on a postcard, please.

Thanks

PS Mods - please merge this with whichever relevant thread, please, as and when. Just wanted this question not to be overlooked for now (Sorry to other message board users for my selfishness in starting a new thread on this)

Hi Goddy, I didn't expect to see my name in a BHE subject. Let's see if I can give you the same response as CP "and a few others..."

Each shareholder has equal claim over the business, in proportion to their shareholding, as all other shareholders (assuming all the shares are of the same class). The shareholders "collectively" appoint the directors to run the business... As there are a large number of individual shareholders and they may have different opinions, including possibly wishing to appoint different directors, these things are decided by a vote based on the number of shares held. ALK acquired 84% of the shares from the existing directors, leaving Mike Garlick and John B with 4,000 shares each and buying out Barry Kilby, Clive Holt etc 100%.

The "rules of "Burnley FC Holdings Ltd" company number 08335231, are determined by the Memorandum and Articles of Association. These rules say what the business can do (and what it can't do).

We know from the Companies House filings that Burnley FC Holdings Ltd that revised Memorandum and Articles of Association were adopted by BFC board on 30th Dec 2020 and, on the same date, the existing directors resigned and 5 new (ALK) directors were appointed. There's a little bit of latency in the changes being published by Companies House - I think some of this is covid-19 related - however, we can see all these changes from 19th Jan thru 29th Jan.

Although, I don't think we can see it "in the public domain" just yet, it is reasonable to think that the order of events were (1) directors' shares sold to ALK; (2) new directors appointed by ALK; (3) revised memo and arts voted through by new directors; (4) charge granted to MSD over BFC assets.

Among the changes in the Articles is the removal of a clause not allowing BFC to lend monies to a 3rd party to acquire shares in BFC.

The same changes and sequence of events have followed at (The) Burnley Football & Athletic Company Limited, company number 00054222. Again, all these details are filed with Companies House.

So, what we believe has happened is that, in accordance with the new Articles of Association, an unspecified amount of cash has been lent by BFC to Calder Vale, and together with other cash held in Calder Vale, forms the (reported) £105 million paid to the ex-directors of BFC for the 84% of the shares now owned by ALK. We also understand, if reports are reasonably accurate, that Mike G and John B between them are owed a further amount of £45 million, which is reported to be due in 3 instalments. It's my guess - but I could be wrong - that these instalments are triggered by BFC's performance over coming period(s). It may be that the performance triggers include remaining in the Premier League. If this is so, this supports Alan Pace's statement that the fans will like the details of the way the acquisition has been structured.

As for all the small shareholders.... everything that has been done by the previous directors and the new ALK directors is legal and "above board."

I'm not a BFC shareholder. I've expressed my view before that I expected all shareholders would be offered the same deal and have the opportunity to sell their shares, whether one only, or more than one, to ALK. Obviously, this hasn't happened at this time.

There have been a number of comments, both in the media and repeated on this mb, that BFC is £90 million worse off. If I understand correctly, I think the suggestion is that the £90 million comprises £60 million loan from MSD and £30 million cash paid by BFC. Strictly, in unconsolidated accounting terms, this is not correct. If BFC has lent £30m cash to Calder Vale, then BFC now has an intercompany debtor of £30m. Similarly, BFC is not directly involved in the £60m loan from MSD. That loan may sit in the books of Kettering Capital or another of the ALK group structure. Of course, BFC assets are included amongst the club's assets charged to MSD as (part of) the security for the loan.

If we look at the consolidated group accounts of Kettering Capital, including Calder Vale, Burnley FC Holdings Ltd and Burnley Football & Athletic Company Limited we would see that Kettering Capital has £98 million equity. There may also be bookkeeping entries that record £60m cash received from MSD and £60m debt owed to MSD, plus £30m cash received from BFC and an intercompany debt of £30m owed to BFC. There may also be entries that record the payments to Mike G, John B and the other previous directors, for the acquisition of their shares in BFC...

So far as I can tell, none of the media reports have comments on the £98 million equity in Kettering Capital. It may be that the media aren't aware that that is the case - even though it's reported at Companies House. It may be that they assume that £60 million of that equity has been paid for by £60m loan by MSD. I don't understand how this would fit into MSD's business objectives.

Hope this helps.

Exciting times.

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[Zlatan]

Paul, we get it, you're excited. Please can you drop the "Exciting Times" at the end of each post. A lot of us are truly worried for "our" club and exciting is not the word I would use for it

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[Hipper]

Your silly analogies are tiresome.

If the club has lost this value, explain how the accounts will reflect this and how the auditors will sign them them off as true and fair if they don't.

TP, are you saying that if cash is moved out of the club and into bank accounts not connected to the club, that the audited accounts will show the club as having the same assets as before the cash was moved out?