Confused - Did we start debt free????

[Rick]

Julian said we started with a clean slate.

As far as I was aware, the former holding company of Bradford City was declared bankcrupt and all debts were written off, then the football league membership was transfered across to a new company which now holds Bradford City's registration.

Can anyone shed anylight on this because we hear different stories all over the place and we still have massive debts to cover.

[Ed]

Not debt's but MASSIVE over heads.

[Rick]

So what is our break even figure. For the last 3 seasons we've averaged a gate of around 8,000 for the season.

[Herr Doktor]

I always thought that a CVA reduced the debt but did not get rid of it completely. That debt and the repayments associated with it then transfer to the new company. If a CVA was to get tid of a debt in it's entirity, companies could just run up debt and then right it off without having to worry about any comeback.

The second CVA we had will have reduced it further but there will still have been some element of debt/repayment to contend with along with the day to day running costs of the club as it si today.

[Rick]

I always thought that a CVA reduced the debt but did not get rid of it completely. That debt and the repayments associated with it then transfer to the new company. If a CVA was to get tid of a debt in it's entirity, companies could just run up debt and then right it off without having to worry about any comeback.

The second CVA we had will have reduced it further but there will still have been some element of debt/repayment to contend with along with the day to day running costs of the club as it si today.

In the copy of the CVA it said that nearly all were getting 0p in the pound and the debt carried across to the new company was next to nothing. Thats how I understood it.

[beerbantam]

In the copy of the CVA it said that nearly all were getting 0p in the pound and the debt carried across to the new company was next to nothing. Thats how I understood it.
As did i!

[Rick]

As did i!

It probably was the way it was but the club has been run like a circus for the last few years saying that debts from the previous admins still exist is an easy way to cover up failure.

[ernie06]

As chuckle states on the OMB - we where debt free and a clear way forward.... we where all mugs NOT to ask what direction the way forward was!!!!

We where also told that gates of 7,000 where a good gate to run at financially at this level and we would break even on these numbers- clearly not as we have since been told that we had a deficit of £600K....so windass wages, Windass fee, the £400K + for JJ and the franchise glut that has taken place should have us well secure financially?????

[Herr Doktor]

I don't wish to doubt either you Ernie, or chuckles for that matter, but I don't see how we could have been debt free. This should hopefully shed some light on CVA's for anyone who is interested.

What Is A Company Voluntary Arrangement?
A legally binding agreement between a company and all or certain of its preferential and unsecured creditors whereby the company makes a formal offer towards repayment of its liabilities. A totally flexible arrangement, the CVA does not have to provide for full repayment of all liabilities only more than could otherwise be expected were the company to proceed into liquidation.
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Who Can Benefit From A Company Voluntary Arrangement?
Below are examples of those companies that may expect to benefit from the CVA procedure. At Harrisons we understand that no two companies are identical, therefore if your company doesn’t fit into these categories, do not hesitate to engage us to undertake our free business review.

Young companies who have experienced trading difficulties since start up, who are forecasting increased future profitability but remain under severe creditor pressure.

Companies who have experienced one off problems such as bad debts that have seriously affected the financial position of an otherwise historically profitable business.

Companies that need to restructure including introducing redundancy measures to return to profitability but do not have the cash required to undertake the restructuring process.

Companies that wish to wind down trading in an orderly fashion thus enhancing the return to creditors as a result of increased asset realisations thus avoiding the stigma and costs associated with liquidation.

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The Procedure in Brief
Proposals for a CVA are usually made by directors of a company unless it is subject to an Administration Order or a Liquidator has been appointed in which case the duly appointed Administrator or Liquidator may seek the agreement of a CVA.

In practice, CVA proposals are drafted by the directors with the assistance of a Licensed Insolvency Practitioner known as the Nominee.

The proposals are then circulated to court, creditors (including prospective and contingent creditors) and the shareholders, calling meetings of creditors and shareholders on a minimum clear 14-day notice period.

More often than not proposals, once approved, provide for a stay of execution from creditors to enable the company to continue trading, a percentage of profits generated post CVA being paid to the Supervisor of the CVA for a period designated within the proposals for the benefit of the creditors included in the CVA.

A CVA is a totally flexible procedure, can simply be utilised to avoid the higher costs of liquidation and can on occasions be combined with the introduction of one of the refinancing products contained within this web site.

The CVA is subject to agreement of 75% in value of those creditors entitled to and who vote either in person or by proxy at the meeting.

Requires the approval of the majority in value of shareholders.

Directors remain in control of the company after the approval of the CVA.

More often than not upon approval of the CVA the Nominee becomes Supervisor whose responsibility is to ensure compliance with the proposals and distribution of the funds to creditors.

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Key Components for a Successful CVA
Honesty and transparency as to the affairs of the company within the proposals.

It must offer a higher return to creditors than could otherwise be expected were the company to proceed into insolvent liquidation.

If the CVA is based on continued trading, a viable business that can return to profitability and sufficient working capital.

Be realistic, unless there are extraordinary grounds for the failure of the business such as experiencing bad debts, creditors will rightly be sceptical of proposals including projections which show significant profits being generated without adequate explanation.

Determination and hard work of all parties.

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Advantages of CVA
The Company
Companies may now make an application to court for a moratorium preventing creditors from taking enforcement action against it whilst proposals for a CVA are put to creditors, (see newspage). The benefit of the moratorium will be to provide additional breathing space between filing in court of the proposals and the date of the creditors’ meeting, a period which, prior to the introduction of the moratorium often resulted in creditors instigating enforcement action, to secure their position outside of a CVA.

The scope of the moratorium is similar to an administration moratorium (see administration section)

Provides breathing space once the CVA is in place, to reorganise and restructure the company without the threat of creditor action.

Costs are significantly less than those that would be expected to incur in an Administration.

No requirement to advertise either on letterhead or in newspapers that the company is subject to a CVA. Please note however, if wishing to benefit from the moratorium when it becomes law, you will be required to disclose the fact that the company is subject to the moratorium on all documents circulated by it during the normal course of trading.


Directors
The directors remain in control of the day-to-day affairs of the business.

The Supervisor is not required to undertake an investigation into the affairs of the company and unlike a liquidation is not required to submit a report to the Disqualification Unit of the Department of Trade and Industry.

A supervisor cannot bring fraudulent or wrongful trading actions against directors, nor can a Supervisor bring an action pursuant to S238, 239 and 212, transactions at an undervalue, preferences or misfeasance. Please refer to Director’s responsibilities page within this web site.

Provides directors with continued income.


Creditors
Provides an opportunity to recover more of the money lost than could otherwise be expected in a liquidation.

If continued trading of the company is envisaged enables the creditor at its discretion to continue a trading relationship with the company benefiting from future sales.

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Disadvantages of CVA
The Company
Many CVA’s fail due to the high level of expectations and strict conditions imposed by creditors.

Difficulties are often encountered by the company in obtaining credit from suppliers post CVA, resulting in it experiencing cash flow difficulties. This can lead to early failure of the CVA.

Directors
Creditors often seek to restrict the level of directors remuneration and benefits often resulting in them becoming disillusioned with the whole procedure resulting in early failure of the CVA.

Creditors
No opportunity for full investigation into the affairs of the company.

Supervisor unable to pursue directors for action in relation to fraudulent or wrongful trading, transactions at undervalue, preferences or misfeasance.

If you want to check where it came from, here's the link.

http://www.harrisons.uk.com/jkcm/default.aspx?pg=47

[biliousbantam]

But isn't CVA different to administration? I thought city had a CVA and could not maintain it, therefore going into administration. I could well be wrong here but I thought it was the new company was formed to come out of administration and that was the vehicle for getting rid of the debt.

[Ed]

The stuff about Rhodes putting us into administration for his own gain is bollocks, legally he had todo it. If Gibb was no longer involed or Rhodes then the CVA they were working under was illegal, Just remember who it was who turned upto a board meeting and handed in his resignation at the end with his fellow friend/business man/accountant!

[ernie06]

It was Junior who apprered in the press and said we where debt free - hence the new company forming etc.

I only got involved in fund raising - not the financial aspect of what was going on - as I trust no one with my money - except myself - lol

It was a fresh debt free start to a new Bradford City - and we have been scrimping and scraping ever since - trying out dodgy deals and working with dodgy "wanna bee" football chairman in a desperate search for salvation.

[ernie06]

BUT Ed - ask yourself why he handed in his resignation- maybe he saw the club heading down this slipery slidey slope we seem to have been on under junior.

I am sure he was financially astute enough and has had some good background training in how to run a sucessfull bussinessto see the light for the trees - things he porposed and suggested where put to one side and Junior would not let go - so the parting of the waves ensued....almost a loss of a club and a comedy of errors ever since.

try reading that without the blinkers.

[baldbantam]

Thing is. the last administration wasn't a CVA. If you go through a CVA, then the same company comes out the other side still trading. That's not what happened.

The company at that point in time was liquidated, and an entirely new company was formed. To the best of my knowledge, that new company was entirely debt free, although saddled with large overheads in terms of the rent and some high earners left on the wage bill.

[Spoonhead]

Thing is. the last administration wasn't a CVA. If you go through a CVA, then the same company comes out the other side still trading. That's not what happened.

The company at that point in time was liquidated, and an entirely new company was formed. To the best of my knowledge, that new company was entirely debt free, although saddled with large overheads in terms of the rent and some high earners left on the wage bill.

That's how I understood it.

So what I can't understand is and I think this is Ricks point too, if we were debt free when we started again, surely we knew how much the rent was going to be on the stadium, the wage bill, and the general running costs etc? So why aren't we breaking even when it was said that an average gate of 7000 would be good enough?

[Dr Wisey]

did the FL not put stipulations about certain creditors being paid? - I can't recall now other than to say it's been one big fck up since.

[tony d]

So in summary of all those cracking posts...

No fooker has a clue ..All we have is the idle chit chat and hush hush insider bleating we normally get..

Some feed off that others just wish someone would finally set the record straight...

[Herr Doktor]

Thing is. the last administration wasn't a CVA. If you go through a CVA, then the same company comes out the other side still trading. That's not what happened.

The company at that point in time was liquidated, and an entirely new company was formed. To the best of my knowledge, that new company was entirely debt free, although saddled with large overheads in terms of the rent and some high earners left on the wage bill.

Looks like we were both right Baldy if the BBC is anything to go by. They say there was a CVA then an administration after which, came the £900,000 buy out by Rhodes that cleared the debt.

http://www.bbc.co.uk/bradford/sport/2004/07/a_crisis_12.shtml

I have always liked Rhodes and still believe he is doing his best for the club but you do have to wonder what is going on down at VP for us to still be in the position we are.

[Dr Wisey]

we do old boy we do :-(

[Rick]

So in summary of all those cracking posts...

No fooker has a clue ..All we have is the idle chit chat and hush hush insider bleating we normally get..

Some feed off that others just wish someone would finally set the record straight...

This is probably the one major reason that Rhodes won't take part in a fans forum because this no doubt would be question number one and when we got an answer to it Rhodes could be in for a very hard time answering the answers that followed.

[enoch]

Hi Guys I did post a similar question on the OMB the other day..........

There is definitely something about the clubs finances which doesn't add up.
We must have one of the lowest wage bills in the division, one of the highest attendances and we had a clean slate debt free 2 years ago. We let Windass go for £150k and JJ for a sum so small JR will not make it public for fear of ridicule and we are still crying the poor tale!
Whats going on, why is it all a secret? What has he got to hide? Has he been taking money out of the club again?
As has been said above by another poster this may be the reason JR will not have an open forum and yet he will be expecting the Bradford public to bale him/City out again when it all goes tits up again.

[jimmy]

Enoch,JJ was sold for 450k with sell on clause and a promotion clause.

[enoch]

Enoch,JJ was sold for 450k with sell on clause and a promotion clause.

thanks jimmy I must have missed that.............however that makes our dire financial position even stranger.

[jimmy]

thanks jimmy I must have missed that.............however that makes our dire financial position even stranger.

I couldnt aggree with you anymore on that......Just where has the money gone from JJ,DW and the Intersonic deal?
The 600k loss was announced before those deals were struck,so it just doesnt add up.

[wykie]

JR has pocketed the money. Unpaid loans etc. The guy is going to do a runner this summer and is taking as much as he can before we go tits up. My theory anyway.

Can I say that baldy????????????????

[Parrot]

Dont forget....Deano and Wethers are still on 20k p/w...aint that right T :rolleyes:

*SOURCE=DAILY STAR* jump:tup:

[bg]

Can some one fill me on the financial situation at the club???

Have we announced losses??

[Dr Wisey]

Mystic Meg is the new club accountant

[matnab]

JR has pocketed the money. Unpaid loans etc. The guy is going to do a runner this summer and is taking as much as he can before we go tits up. My theory anyway.

Can I say that baldy????????????????

I'd go along with that. I think JRs assett stripping before trying to get someone to take the club - with no assets or sources of income other than gate money and match day sponsors off his hands.

[terrynewpack]

JR has pocketed the money. Unpaid loans etc. The guy is going to do a runner this summer and is taking as much as he can before we go tits up. My theory anyway.


Similar thoughts crossed a few minds particularly when he launched his ridiculous 'get rich' pledge scheme.

[Yeadon Bantam]

Which is another thing that doesn't add up....

even if 10,000 people pledge to sign up for season tickets we all know that only about half maybe a few more will actually buy them.

AT 138 quid if we only sell just a few more than we have done for the past 2 seasons where are we making st money from?

If we are making losses why would he have done this scheme?

Are we really in debt? are we making a loss?

IMO Nope, he maybe scare mongering?

But i don't know anything.......

[tony d]

Dont forget....Deano and Wethers are still on 20k p/w...aint that right T :rolleyes:

*SOURCE=Hull Echo* jump:tup:

Just cleared that up for you P.....

[enoch]

Just cleared that up for you P.....

never believed that anyway.............I would be surprised if its more than £2k per week. Anyway no-one seems to know where the money has gone and why Rhodes is crying the poor tale, the theory about asset stripping before he clears off is actually believable.
After starting afresh with no debt and the players on D1 contracts and the large crowds (for the division) we should be better off than most clubs in this league.

[tony d]

never believed that anyway.............I would be surprised if its more than £2k per week. Anyway no-one seems to know where the money has gone and why Rhodes is crying the poor tale, the theory about asset stripping before he clears off is actually believable.
After starting afresh with no debt and the players on D1 contracts and the large crowds (for the division) we should be better off than most clubs in this league.

He did say that he was putting no more in so that could apportion alot of the black hole...

If he no longer is paying the extras for the bills then i see where the "in the red" comes from...

As for taking some of the money from the transfers!!! Wouldn't you as the sole money man now....???

If he is going then realistically you cannot blame him ....He will think he has done his best whether that in your mind was good enough or not...

Let's hope someone feels they can take us on as a prospect...We all dream of thisbut in reality as long as it is someone with simmilar finaces as JR but a better business mind we should still go forward...

[bg]

I must be ill, I am going for a lie down; I agree with everything that tonyd just said:eek:

[Parrot]

He did say that he was putting no more in so that could apportion alot of the black hole...

If he no longer is paying the extras for the bills then i see where the "in the red" comes from...

As for taking some of the money from the transfers!!! Wouldn't you as the sole money man now....???

If he is going then realistically you cannot blame him ....He will think he has done his best whether that in your mind was good enough or not...

Let's hope someone feels they can take us on as a prospect...We all dream of this but in reality as long as it is someone with simmilar finaces as JR but a better business mind we should still go forward...

So you finally realise JRs fooking useless then?:rolleyes:

[tony d]

So you finally realise JRs fooking useless then?:rolleyes:

Can you read????

If you answer yes you must be lying P judging by your question...:rolleyes:

I think he has done all he can...In the same way as Todd...

[Parrot]

Can you read????

If you answer yes you must be lying P judging by your question...:rolleyes:

I think he has done all he can...In the same way as Todd...

In the same way that Michael Jackson would do his best at child minding???:rolleyes: