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Gerald Krasner Pt 4The fourth meeting with Gerald Krasner took place this evening, Tuesday 22/09/20. The telephone call lasted 46 minutes.
Full range of questions asked, all that were emailed in, some stuff, not much to be fair, was off the record
Callum Lang (question from week 3 that got missed) I needed to save the outflow of wages, the wages were really costing the club so we had to make some savings.
League 1 & 2 Being Cancelled if the reported cancellation did come about it would create turmoil, but only the High Court could stop the administration process, I don’t see what cancelling the season would achieve really, you’re going to alienate millions of people who are fans, you’re not going to save certain costs that are there anyway, like rates, stadium costs and stuff - and it will be up to the Government, the Premier League and the EFL to come up with a package and the players would have to take reduced wages.
So the administration process would carry on but under an even worse scenario.
American Bid I tried to explain, in my statement why I turned down the American offer, the Americans have gone public on this more than once and it gives me the right to respond in public, unless we pay £3.3m of administration expenses, we cannot pay the creditors 25p in the £ in law.
If the Americans want to bring that bid back and would deal with the creditors themselves I’m telling you it would be seriously looked at.
It’s come back to me, rightly or not, that the Americans were surprised that we rejected, they thought we’d make a counter offer, but we’ve laid out where we are and I have to meet a minimum standard, they got to waive in their offer the creditors position. They either up the bid by £1.3m or if they’re tied for cash on day one, the best thing to do is offer me is £2.7m and they pay the creditors £1.8m over three years, roughly, but that incurs a 15 point penalty.
Bidders Put Off Everybody has called me a liar on this, but I am an officer of the court and I cannot lie as I would be hauled before the courts, I had a bidder that I met, I had physically gone somewhere to meet, they are very rich, let’s just say that money was not the problem, they were going to bid just under £4m but were going to put £4m in their solicitors account, I spoke to their solicitor who said he’d got instructions that on Monday, he’d given his bank account details to them, he said to me that they had to have complete anonymity and this stage, until their bid was accepted by the EFL they were not going to go public. There was a very good reason for this which I cannot disclose.
When Nixon put that article account, not only them but every other bidder was onto me “what’s this, your selling for £2 million”, now this wasn’t the fans fault but Nixon not phoning up checking a story. At that stage we’d had no bid from America for £2million. We didn’t get it for another four days, so how does he know it’s coming?
These people (bidders) have got professionals monitoring the websites and social media to see what’s going on, Monday morning I got a phone call from their agent saying that they were having a rethink due to publicity and they never transferred the money. They’ve now gone and definitely not in the bidding and not coming back.
You can imagine how I felt, they had the contract, they said if we put the money in can we have exclusivity, I said no because there are other contracts out but once the money is in they are ready to sign the contract. That was the leading bid of three at the time.
His (Alan Nixon) job is to get a story, his responsibility is to check there is an element of truth in it, that’s what I’m saying.
Finance/Debt No we wouldn’t finish the season if no buyer came in, there are too many things that can effect it for me to give you a date, it’s not Christmas, it’s before Christmas in my opinion.
What do we owe? We have written off £25m the best estimate is £5.2m at the moment, which is why 25p is £1.3m (which must be paid), now there are creditors in the other companies , but I don’t have to pay them anything at this moment but I may have to do after.
Will we put a definitive amount owed on the website? No. The absolute cost depends on whether they are paying the creditors or not, this is explained in the discussion about the American bid previously. £4 million with the creditors paid by us, or £2.7 million and the new owners pay the creditors themselves.
Euxton There is a tax problem with the Euxton sale, it is in the books at £650K everybody knows it cost more than that. Anything we sold it for over £650K we’ve got a tax bill to sort out on it. We have also got creditors on the other companies and yes half of the Euxton money, but not all of it, will be used for fees. It wasn’t sold for that reason, originally it would have gone back to the Cayman Islands that money, but the owners have waived it and said we will guarantee your fee, our property companies will pay them. None of our fees will go to the football club – and I keep saying this – the legal fees is for the appeal, no other professional fees for us or the lawyers will go to the Football Club.
If we hadn’t done what we’d done and sold Euxton the Football Club still wouldn’t have seen the money because it would’ve gone to the Cayman Islands. I’m not denying that some of that (Euxton) money will have to be used for our fees and lawyers fees.
Peter Risdale I followed Risdale at Leeds United, he’s not a friend of mine despite what he says, he is a very smooth talker, but saying it (Euxton) is worth £10 million is for his own fans (PNE) consumption.
Michael Danson (Wigan Warriors investor) hasn’t been approached by us.
Streaming the games into the ground may have been possible up until today
Dean Watson going to the Ipswich game, all necessary precautions always undertaken
Transfer Fees The bidders see the individual transfer fees but not all being made public, though they will be totalled on report.
Bad News If there ever is going to be bad news I won’t be putting it on the website I will come down face to face to give and to answer questions, that isn’t a plan, it isn’t, but I’m not going to run away and only come for good news.
Fire Sale There hasn’t been a fire sale, we turned down bids for players. Let’s deal with this and the Add Ons. We came in on the 1st July knowing nothing, first thing we ask “have Junes wages been paid” no. So we’ve got 28 days to pay the wages otherwise the entire team could walk and then it’s not a fire sale it’s close the club.
So what do we do, we sell immediately two youth players and doubled the original bids that have been received, one of them before we were appointed. Brighton had made the offer, we got double the money in the end. Forget the add-ons, then we sell Gelhardt to Leeds because we were coming up to July’s wages .
The most important things were to get money to pay wages, the bill, including ground staff was in excess of £1m a month even after furlough monies were received. But there was the deferrals from March which had to be paid, and after the end of the season, everyone who was out of contract, or lefty, was entitled to an extra month’s salary at Championship rates.
So we had to sell players to meet that commitment for the three months, now we’re in the middle of Covid no clubs are getting any income, including the Premier League, if we sold any player before the transfer window came in we couldn’t get the money to pay the wages unless we sold to a Premier League club. The only people who are going to pay reasonable money are Premier League and top half of the Championship.
What we have done is refuse bid after bid to get what’s known as the add-ons, Gelhardt for example went for £800K but there are £1m of potential add-ons on that contract, the other players we’ve sold have add-ons worth up to £7m.
Strictly that money will come to us as administrators what we have said is that we need the first £250K as a buffer and we will sell you the rest for the £1. So any new owner going forward over the next five years can expect a steady stream of income all things being equal, you won’t get full amount but certainly £1m+.
The buffer, we’ve had to make some assumptions of how much we need to pay everybody, the revenue haven’t put a claim in we think that there is some they haven’t claimed yet, so we have to make allowances here and there, that’s the buffer. If we don’t spend that 250 we’ve told all the bidders “you’ll get it back”.
The add-ons are appearances, sell ons etc. A lot of people don’t understand football insolvency and it needs explaining that this is a vital asset going to the new owners.
Our fees aren’t negotiable, they are approved by creditors. Are our fees negotiable? I don’t think we are going to get all our fees, let’s put it that way.
We did a deal with the owners on the basis that if it didn’t work out we could do a million pounds worth of work and not get paid a penny.
Our fees are dependent on selling the club, if we don’t sell it we’re in trouble.Just to reiterate, debt is £5.2m @25p (£1.3m) owing and £3m is the revenue. Sale - £2.7m with them paying the creditors or £4m with admin paying the creditors.
Conflicting Statements We have been accused of putting out conflicting statements, Paul Stanley was taken out of context in a telephone call with the Guardian newspaper, he was asked an innocuous question, he was explaining like Macclesfield and Bury what happens if we don’t sell the club, he’s not saying this is a Macclesfield, things are taken out of context, headlines do not mean what he said.
Everyday we are talking to the bidders either by phone, email or via meetings, it’s a non-stop process, but as of today it hasn’t progressed to where someone is going to sign a contract.https://progresswithunity.blogspot.com/2020/09/gerald-krasner-pt-4.html?m=1
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