Transfer embargo

[Clive 1960]

Ah ok

not worried (not sure I have ever been worried) about the going concern element in the short to medium term under this ownership given the need to keep generating surplus cash to meet their commitments - and even then the worst of that appears to have passed. Similarly there are no issues with Profit and Sustainability rules (FFP) though the next iteration may prove a little more daunting if they follow the UEFA model as I expect them to.

From what we know the club has
- no external debt other than transfer fees and the high potential for conditional fee/bonus payments on promotion and as you say the rewards of promotion will cover that.
- probably generated operational profits this season and certainly last season,
- potential challenges on cashflow following the debt payoff, but a factoring of Premier League monies once promotion is confirmed would help with that

I have a theory about where the money came from to pay off the debt and how it benefits the ownership group while at the same time offering them flexibility particularly in factoring to assist with cashflow, but it needs a bit more research as to whether it is actually possible so I will keep it off the board for now.

Hi Chester, this is the post you put out about the debt are you allowed to tell us your theory about where the money as come from.

[HistoricalClaret]

It is a fact

Technically the debt was paid off by the club

Where were the funds sourced from to fund the pay off? is the precise question we don't have a confirmed answer too though I suspect a few have theories - I know I have.

Chester we may not entirely agree on everything fella, but you get em told.

For me my generalisation of this entire situation is:
Come the end of April if we have still not submitted our accounts and had the embargo removed we can get concerned but until that point theirs not immediate reason to worry.

[Rileybobs]

It is a fact

Technically the debt was paid off by the club

Where were the funds sourced from to fund the pay off? is the precise question we don't have a confirmed answer too though I suspect a few have theories - I know I have.

Are you suggesting that our American football friends may have invested in order to clear the debt?

[Chester Perry]

If someone had just put...an admin error....it would have stopped those who find it hard to understand from having a melt down about the club going bust.

They tried that on the 1st December last year
https://www.lancs.live/sport/football/f ... source=nba
“This is an administrative error that has come to our attention and is being addressed and resolved with immediacy."

[Chester Perry]

Hi Chester, this is the post you put out about the debt are you allowed to tell us your theory about where the money as come from.

Now is not the time for me to start speculating on that subject

[ClaretTony]

A day in paradise for those who don't like not having a club owner who was born with a BB postcode.

I don’t understand finance or what’s happened here so it’s of value to me to read some of the comments on this thread on either side to try and build up a picture.

Then I see nonsense like the above about where people are born. What on earth is that about?

[Chester Perry]

Are you suggesting that our American football friends may have invested in order to clear the debt?

As aggi has said previously - that reasoning does not make much sense when you consider how much MSD will have received to clear the debt ( penalties included) and the opportunity cost of how such monies could be used in alternate ways.

[RVclaret]

As aggi has said previously - that reasoning does not make much sense when you consider how much MSD will have received to clear the debt ( penalties included) and the opportunity cost of how such monies could be used in alternate ways.

So what is your theory?

[Clive 1960]

Now is not the time for me to start speculating on that subject

I just want my beloved CLARETS to be run right and everyone to be up front who run our club .

[Chester Perry]

Chester we may not entirely agree on everything fella, but you get em told.

For me my generalisation of this entire situation is:
Come the end of April if we have still not submitted our accounts and had the embargo removed we can get concerned but until that point theirs not immediate reason to worry.

I could have also added that I believe the MSD loan was paid off in mid November last year.

The end of April is indeed the interesting one - and from the club statement yesterday is what appears to be very firmly fixed in the minds of the ownership group.

When the accounts do come out I expect those for Kettering Capital Limited and Calder Vale Holdings Limited (possibly even ALK Capital Limited - even though I do not think it is part of the group) to also be released, followed by a future aligning of reporting dates.

[Chester Perry]

OK, maybe I stand corrected and CVHL will need to file group accounts. However, the EFL don't appear to be aware of or concerned by this as they say the regulation we've failed to comply with is 16.2 which relates to submission of the club's accounts to them and not 16.3 relating to submission of group accounts to the Registrar.



Yes. Different auditors would increase the work that needs to be done and therefore the costs and time involved.

Thanks for that on the auditors

Intrigued as to where this EFL statement has come from

I cannot find one on twitter
https://twitter.com/EFL
https://twitter.com/EFL_Comms

or the EFL website
https://www.efl.com/news/

[Big Vinny K]

I don’t understand finance or what’s happened here so it’s of value to me to read some of the comments on this thread on either side to try and build up a picture.

Then I see nonsense like the above about where people are born. What on earth is that about?

Agree that is a completely ridiculous thing to say.
Has anybody any of us know who support the club EVER said that they want the owner of the club to be born in Burnley ?

But in reality I’m guessing that what the poster was actually intimating was that people are only asking questions of the owners about this specific issue because they are American……which tbf is equally as ridiculous !!

As Frank Teasdale will have known it offers you no protection from fan criticism if you were born in Burnley !

[HistoricalClaret]

Worth adding to this that according to Alan Nixon this morning Huddersfield have also been embargoed though for what I am unaware as I do not pay him but that now means 4 club in the championship under embargo.

[RVclaret]

Worth adding to this that according to Alan Nixon this morning Huddersfield have also been embargoed though for what I am unaware as I do not pay him but that now means 4 club in the championship under embargo.

Already posted on the previous page. It's for the same reason as us, late accounts.

[HistoricalClaret]

Already posted on the previous page. It's for the same reason as us, late accounts.

Fairs, didnt see.

[arise_sir_charge]

They tried that on the 1st December last year
https://www.lancs.live/sport/football/f ... source=nba
“This is an administrative error that has come to our attention and is being addressed and resolved with immediacy."

See this is the interesting part for me.

The previous references to errors and correcting them seem to tie in with the same props as us changing auditors, may be it was the catalyst for the change or it could just be complete coincidence.

[dsr]

We are in breach of regulation 16.2 and P&S Rule 2.1.3

If someone wants to read up on what they are

16.2 is for not submitting the 2022 accounts on time. 2.1.3 is for not submitting the estimate of the projected 2023 accounts.

[Chester Perry]

I just want my beloved CLARETS to be run right and everyone to be up front who run our club .

There are many definitions of being run right - I wouldn't necessarily expect the clubs owners to be moral exemplars of business - that it is something of a juxtaposition when football is actually a pretty cut-throat, ruthless and competitive world. I would expect an ownership group who have taken over the club in highly leveraged means to seek to be innovative and test the boundaries of rules and regulations in order to increase their competitive position.

The key here is keeping on the right side of those rules and regulations, stretch don't break, on the scale of issues late reporting, while possibly indicating warnings of other potentially more serious issues is not a problem if the promise of resolution is kept.

There are things off field I am not happy about, but they are little different to what most clubs do - the problem for Pace is that he said he wanted us to be everyone's second favourite club, these goings on (and the takeover method) make that a very difficult task to achieve, however glorious the action we see on the pitch. Pace also suggested that communications would improve without actually specifying which communications - there is no doubt our social media communications have leapt forward, comms on business issues and practice on the other hand have probably never been so closed.

[Chester Perry]

See this is the interesting part for me.

The previous references to errors and correcting them seem to tie in with the same props as us changing auditors, may be it was the catalyst for the change or it could just be complete coincidence.

indeed - but by then KCL and CVHL were already over a month late (officially, over 4 months from original due date ) with their accounts with ALK Capital Limited and Velocity Sports Partners Limited were 5 months late.

[Tall Paul]

Thanks for that on the auditors

Intrigued as to where this EFL statement has come from

I cannot find one on twitter
https://twitter.com/EFL
https://twitter.com/EFL_Comms

or the EFL website
https://www.efl.com/news/

https://www.efl.com/-more/governance/embargoes/

[aggi]

It is a fact

Technically the debt was paid off by the club

Where were the funds sourced from to fund the pay off? is the precise question we don't have a confirmed answer too though I suspect a few have theories - I know I have.

Is it a fact? There's nothing on the public domain that I know of that shows it (a number of things suggest it), have I missed something or has this come from elsewhere?

[Andreshotboots]

Have we signed anybody yet?

[RVclaret]

Kieran Maguire interview with BBC Radio Lancs on all of this

https://twitter.com/BBCLancsSport/statu ... 44480?s=20

[Clive 1960]

There are many definitions of being run right - I wouldn't necessarily expect the clubs owners to be moral exemplars of business - that it is something of a juxtaposition when football is actually a pretty cut-throat, ruthless and competitive world. I would expect an ownership group who have taken over the club in highly leveraged means to seek to be innovative and test the boundaries of rules and regulations in order to increase their competitive position.

The key here is keeping on the right side of those rules and regulations, stretch don't break, on the scale of issues late reporting, while possibly indicating warnings of other potentially more serious issues is not a problem if the promise of resolution is kept.

There are things off field I am not happy about, but they are little different to what most clubs do - the problem for Pace is that he said he wanted us to be everyone's second favourite club, these goings on (and the takeover method) make that a very difficult task to achieve, however glorious the action we see on the pitch. Pace also suggested that communications would improve without actually specifying which communications - there is no doubt our social media communications have leapt forward, comms on business issues and practice on the other hand have probably never been so closed.

Thanks Chester, I see where you are coming from. UTC

[RVclaret]

Kieran Maguire interview with BBC Radio Lancs on all of this

https://twitter.com/BBCLancsSport/statu ... 44480?s=20

Kieran is basically very relaxed about it

[ClaretPete001]

Is it a fact? There's nothing on the public domain that I know of that shows it (a number of things suggest it), have I missed something or has this come from elsewhere?

I don't get this either...

The charges are still on the tangible assets and we are talking tens of millions.

And with the issue surrounding submission and the constant citations by companies house and now the EFL I don't know how anyone would know what the facts are...1

[Chester Perry]

Is it a fact? There's nothing on the public domain that I know of that shows it (a number of things suggest it), have I missed something or has this come from elsewhere?

I understand what you are saying given that the issue of charges not being removed from KCL and Longside Properties Limited exists, but in reality are we saying that the charge being removed from the key bearing entities at Companies House is not factual evidence of the debt being cancelled. Would they not be legal repercussions if the debt had not been paid off

Interestingly the de listing from TISE last November is probably greater evidence that the loan has been paid off but I would agree that in pure terms we cannot treat it as more than suggestive.

[Paul Waine]

The "satisfied in full" statements are pretty good evidence that the MSD loan has been paid in full. Imagine if you were MSD and "satisfied in full" was filed when you were still owed money. MSD would be very quick in re-filing that charge still stood at the very least. If MSD needed to they could appoint administrator to recovery their loan if the club was seeking to deny the charge still existed.

The fact that the charge has not been recorded as satisfied in full on Kettering and Longside - remember MSD don't have to make thos filing, neither do the club directors - is reason why EFL is right to request group accounts.

Ok, Nov-22 is after 31-July-22, but is still a key piece of information for the accounts.

We've now had 3 US sports stars visiting the club - that we know of. We also know that Alan Pace's plans were to invite a number of investors. Not all of these investors will be well known US sports stars. It is possible - I know no more than anyone else on here - that Alan Pace has made progress on these new investors. An immediate return of approx 10% is achieved by paying off the debt. Bigger returns will come longer term. Of course, if money is needed for this summer's transfer window new loans are always possible, especially if previous loans have been repaid in full.

[Chester Perry]

https://www.efl.com/-more/governance/embargoes/

Cheers

as you say interesting,

all the other rule breaches I suggested yesterday cascade from 16.2 not occurring and the club's own admission about the auditors.

I am intrigued that they cite P&S 2.1.3 (which may/may not be a heavier charge) instead of 16.12

2.1.3 its estimated profit and loss account and balance sheet for T which shall:

(a) be prepared in all material respects in a format similar to the Club’s Annual Accounts; and

(b) be based on the latest information available to the Club and be, to the best of the Club’s knowledge and belief, an accurate estimate as at the time of preparation of future financial performance; and

(c) if Rule 2.5 applies to the Club its P&S Calculation in a form approved by The League from time to time and which as at the date of these Rules is set out in Annex 1;

2.5 If the aggregation of a Club’s Earnings Before Tax for T-1 and T-2 (or in the case of Season 2020/21 T-2 and T-3) results in a loss, any consideration from Associated Party Transactions having been adjusted (if appropriate) pursuant to Rule 2.3, then the Club must submit to the Secretary its P&S Calculation.

---------
The obligation to file interim accounts is limited to Championship Clubs only.

16 .12 The interim accounts shall:

16.12.1 comprise a balance sheet, a profit and loss account, a cash flow statement and relevant explanatory notes;

16.12.2 be prepared in accordance with the accounting principles adopted in the preparation of the Championship Club’s Annual Accounts;

16.12.3 be presented in a similar format to the Annual Accounts including as regards the matters set out in Regulation 16.9;

16.12.4 include in the profit and loss account and cashflow statement comparative figures for the same period in the preceding year;

16.12.5 include a balance sheet as of the end of the preceding financial year;

16.12.6 be approved in writing by the board of directors of the company to which they relate; and

16.12.7 be reviewed by the Club’s auditor or audited in accordance with applicable regulatory requirements.

[Nonayforever]

It is worth noting that the late filing of accounts and the EFL transfer embargo are two different issues but obviously linked.
Reg 16.20 is a separate set of accounts required by the EFL,
The P & S reg that is also part of the embargo is more or less linked to the full accounts.
It's worth noting that Reading have broken the P & S reg, whereas we haven't supplied accounts so haven't actually broken any rules , just not given the EFL the info they need to check.

[MrTopTier]

Very good stuff on here now, thanks for those contributions by Chester, Paul Waine and Tall Paul. Makes it easier for the rest us for us to understand. Thanks UTC.

[Chester Perry]

We've now had 3 US sports stars visiting the club - that we know of. We also know that Alan Pace's plans were to invite a number of investors. Not all of these investors will be well known US sports stars. It is possible - I know no more than anyone else on here - that Alan Pace has made progress on these new investors. An immediate return of approx 10% is achieved by paying off the debt. Bigger returns will come longer term. Of course, if money is needed for this summer's transfer window new loans are always possible, especially if previous loans have been repaid in full.

This comes back to what is the ownership group in this for and what are they

We know they are not Private Equity - Alan Pace said that last September in an interview I posted. Private Equity tends to put money in early to generate growth and greater returns into the medium term before exiting - see CVC with La Liga and perhaps more interesting given it is the first time it has been done at a club, ClearLake at Chelsea.

we strongly suspect that ALK/VSP/VSL want to be more like an FSG (though currently without the multitude of billionaires and family offices that form the 20+ members of that partnership). FSG have loaned money for revenue growth projects with a timetable for repayment, that is active, I am unclear as to whether those loans are interest bearing.

There are currently 8-10 names associated with investment in our clubs ownership group - 5 of which are from ALK. It is entirely possible that there are more small investors/members/partners in that ownership group - its structure allows for them to be hidden from public view if they choose.

What we don't know is what new and existing monies introduced to the ownership group is being used for or if the members are happy just with the idea of growing the asset value or are wanting a structured regular return on their stake/investment (certainly you would expect retired NFL stars would want to maintain a lifestyle that would now have to be funded from their investments).

[summitclaret]

Kieran is basically very relaxed about it

Certainty made me feel more relaxed after listening to that. Recommended viewing.

[Chester Perry]

Kieran is basically very relaxed about it

If you have followed Kieran for a number of years you will be aware that he is usually relaxed until there is clear evidence not to be

[Vegas Claret]

Kieran is basically very relaxed about it

he's got his pipe and slippers on he's that relaxed about it

[Nori1958]

I don’t understand finance or what’s happened here so it’s of value to me to read some of the comments on this thread on either side to try and build up a picture.

Then I see nonsense like the above about where people are born. What on earth is that about?

In the past, some supporters wanted the club to be run by people from Burnley, and didn't trust outsiders.....some of those people still exist, which is what I think the poster was alluding to

[Chester Perry]

In the past, some supporters wanted the club to be run by people from Burnley, and didn't trust outsiders.....some of those people still exist, which is what I think the poster was alluding to

there is also the issue that others are tarred and feathered with it when it couldn't be further from the truth

[Nori1958]

there is also the issue that others are tarred and feathered with it when it couldn't be further from the truth

I wouldn't have a clue, I was just trying to explain where the poster was coming from.....iam happy for any investment

[FeedTheArf]

In the past, some supporters wanted the club to be run by people from Burnley, and didn't trust outsiders.....some of those people still exist, which is what I think the poster was alluding to

Not sure where Garlick was from exactly, but he was always thought of as 'local'. How he treated the club in fattening it up for market (whilst everyone thought it was our relegation rainy day fund) just shows being local means nothing.

Alan Pace could've been born on Harry Potts Way or Timbuktu. I don't care what it says on his passport, I care about how he runs the club and keeps it safe whilst it's under his ownership.

[D8BFC]

I’d lost the will with this thread yesterday.

Top notch analysis from Chester

[DCWat]

Not sure where Garlick was from exactly, but he was always thought of as 'local'. How he treated the club in fattening it up for market (whilst everyone thought it was our relegation rainy day fund) just shows being local means nothing.

Alan Pace could've been born on Harry Potts Way or Timbuktu. I don't care what it says on his passport, I care about how he runs the club and keeps it safe whilst it's under his ownership.

Equally important to me is that the same level of care is applied when it comes to selling the club. Investors naturally want a healthy return, which doesn’t go hand in hand with who the club is sold to.

[aggi]

I understand what you are saying given that the issue of charges not being removed from KCL and Longside Properties Limited exists, but in reality are we saying that the charge being removed from the key bearing entities at Companies House is not factual evidence of the debt being cancelled. Would they not be legal repercussions if the debt had not been paid off

Interestingly the de listing from TISE last November is probably greater evidence that the loan has been paid off but I would agree that in pure terms we cannot treat it as more than suggestive.

I'd say there is a step in between the charge being removed on some entities and definitively being able to say the loan has been repaid but I am probably more sceptical than average when it comes to this kind of thing. The debt can still exist without the charge (or with a reduced charge).

There's a decent chance it has been paid off (or at least reduced) in some manner but I wouldn't say it's a fact.

[ClaretTony]

In the past, some supporters wanted the club to be run by people from Burnley, and didn't trust outsiders.....some of those people still exist, which is what I think the poster was alluding to

Says more about them than anything

[Chester Perry]

I'd say there is a step in between the charge being removed on some entities and definitively being able to say the loan has been repaid but I am probably more sceptical than average when it comes to this kind of thing. The debt can still exist without the charge (or with a reduced charge).

There's a decent chance it has been paid off (or at least reduced) in some manner but I wouldn't say it's a fact.

Which is why I am tending to give more weight to the TISE delisting/cancelation of November 17 2022 and believing that is when the debt was cleared

There is public record linking other such events for MSDUKH on TISE and confirmation of MSD UK Holdings Limited debt being repaid in full with the cases of both Derby and the first loan from them by West Ham.

[Nori1958]

Not sure where Garlick was from exactly, but he was always thought of as 'local'. How he treated the club in fattening it up for market (whilst everyone thought it was our relegation rainy day fund) just shows being local means nothing.

Alan Pace could've been born on Harry Potts Way or Timbuktu. I don't care what it says on his passport, I care about how he runs the club and keeps it safe whilst it's under his ownership.

Agreed

[Nori1958]

Says more about them than anything

Couldn't agree more.....but they exist unfortunately

[SouthLondonexile]

Kieran is basically very relaxed about it

This video of an interview with Kevin McGuire has been really helpful - to me - in understanding the transfer embargo placed on BFC by the English Football League.

[Royboyclaret]

I'd say there is a step in between the charge being removed on some entities and definitively being able to say the loan has been repaid but I am probably more sceptical than average when it comes to this kind of thing. The debt can still exist without the charge (or with a reduced charge).

There's a decent chance it has been paid off (or at least reduced) in some manner but I wouldn't say it's a fact.

Exceptional contributions on this thread from Chester and aggi......as always.

The debt has been cleared......in full.

[beddie]

Exactly like us Huddersfield have also failed to submit their accounts on time and have been placed under an immediate transfer embargo.

[ecc]

Sorry about this but have the EFL actually issued a statement today?