dicksojo Posted August 12, 2013 Share Posted August 12, 2013 Someone has appealed against the appointment of the Ubig administrator - we don't know who or why. As a Ubig administrator is therefore not formally in place yet it is not surprising they haven't voted. I agree with others that Ukio's agreement to proceed with CVA discussions is hardly big news (though obviously preferable to the alternative!)and doesn't mean a price has been agreed. Also Ubig's vote in favour will be needed for a CVA to be approved. Correct me if I am wrong but Ubig are in liquidation and Ukio Bankas are in administration. Admistration means trying to save the business as a going concern. Liquidation means realising all assets the company (Ubig) have in order to return some of the funds owed to creditors. Floating charge is with Ubig and stadium is valued at ?5m therefore liquidator has a duty by law to re-coup as much as possible for creditors. The liquidator has the option on an asset worth ?5m (Tynecastle) if a CVA was to be agreed with liquidator it would have to be dependent on BDO offering ?5m (value of Tynecastle, or a little less due to work and hassle liquidator would need to work through to realise ?5m from Tynecastle). Liquidator of Ubig by law has to recoup as much as possible for creditors, this means BDO will need to offer in the area of ?5m after they have bought Ubig's shares for a nominal price with the promise of taking on the debt. This is based on my understanding of insolvency practice in the UK. Anyway, the whole of that was just to say that this news, even though it is promising, is not the main hurdle that HMFC and BDO have to jump. In fact this means relatively little as once agreement with Ubig is made the pence in the pound settlement will be based solely on the agreement with Ubig. Ubig are holding the cards here, their liquidator needs to get as much money back as possible and they have option over an asset valued at ?5m which by law they must try to pursue. If numbers are to believed total debt to Ubig is ?18m, liquidator whill accept ?5m (approximately 30% of the total debt owed). This 30p in the ?1 will be applied across the rest of the creditors as in a CVA position the same "agreement" must be applicable across all creditors. As Ubig and Ukio own over 75% of the debt they can agree or disagree to 30p in the ?1. If total debt is ?28m then 30% of this is ?8.4m whhich will be needed to agree a CVA. This announcement is good news but the big news would be if Ubig came along and made sounds as to what they would accept in exchange for debt and shares of HMFC. Sorry to put a downer on this guys and if my understanding is completely wrong then I am happy to be proved wrong! Link to comment Share on other sites More sharing options...
Don Dan Posted August 12, 2013 Share Posted August 12, 2013 The have not noticed as they are to busy arguing amongst themselves over their own future. Results all round for us. Christ, this has been a horrible weekend for the scoobydooers. Link to comment Share on other sites More sharing options...
Martin_T Posted August 12, 2013 Share Posted August 12, 2013 Correct me if I am wrong but Ubig are in liquidation and Ukio Bankas are in administration. Admistration means trying to save the business as a going concern. Liquidation means realising all assets the company (Ubig) have in order to return some of the funds owed to creditors. Floating charge is with Ubig and stadium is valued at ?5m therefore liquidator has a duty by law to re-coup as much as possible for creditors. The liquidator has the option on an asset worth ?5m (Tynecastle) if a CVA was to be agreed with liquidator it would have to be dependent on BDO offering ?5m (value of Tynecastle, or a little less due to work and hassle liquidator would need to work through to realise ?5m from Tynecastle). Liquidator of Ubig by law has to recoup as much as possible for creditors, this means BDO will need to offer in the area of ?5m after they have bought Ubig's shares for a nominal price with the promise of taking on the debt. This is based on my understanding of insolvency practice in the UK. Anyway, the whole of that was just to say that this news, even though it is promising, is not the main hurdle that HMFC and BDO have to jump. In fact this means relatively little as once agreement with Ubig is made the pence in the pound settlement will be based solely on the agreement with Ubig. Ubig are holding the cards here, their liquidator needs to get as much money back as possible and they have option over an asset valued at ?5m which by law they must try to pursue. If numbers are to believed total debt to Ubig is ?18m, liquidator whill accept ?5m (approximately 30% of the total debt owed). This 30p in the ?1 will be applied across the rest of the creditors as in a CVA position the same "agreement" must be applicable across all creditors. As Ubig and Ukio own over 75% of the debt they can agree or disagree to 30p in the ?1. If total debt is ?28m then 30% of this is ?8.4m whhich will be needed to agree a CVA. This announcement is good news but the big news would be if Ubig came along and made sounds as to what they would accept in exchange for debt and shares of HMFC. Sorry to put a downer on this guys and if my understanding is completely wrong then I am happy to be proved wrong! All of the above falls down because it is Ukio and not UBIG who have the floating charge and furthermore UBIG are not currently in liquidation. Link to comment Share on other sites More sharing options...
Don Dan Posted August 12, 2013 Share Posted August 12, 2013 Beat me to it Ukio have the floating charge as well as the shares to cover debt. All of the above falls down because it is Ukio and not UBIG who have the floating charge and furthermore UBIG are not currently in liquidation. Link to comment Share on other sites More sharing options...
Hartley Jambo. Posted August 12, 2013 Share Posted August 12, 2013 Yes. It would be interesting to know what exactly the creditors were voting on. I suspect something like "to accept BDO's interim report and note the intention to proceed towards making a CVA proposal". I doubt BDO gave them the opportunity to vote for liquidation! I'd think that was right, the BDO report that was put up on here basically said it was th consider the joint administrators proposals and whether to form a creditors committee. You had to be a creditor to get the proposals. As you say, I don't think BDO would propose liquidation given we are still negotiating towards agreeing a CVA and exiting admin. P.S. I'm not claiming to be any expert on this by any means, just trying to keep up with each stage as it develops. Link to comment Share on other sites More sharing options...
dicksojo Posted August 12, 2013 Share Posted August 12, 2013 Beat me to it Ukio have the floating charge as well as the shares to cover debt. Sorry chaps my misunderstanding. Good news then!!! Link to comment Share on other sites More sharing options...
Francis Albert Posted August 12, 2013 Share Posted August 12, 2013 Correct me if I am wrong but Ubig are in liquidation and Ukio Bankas are in administration. Admistration means trying to save the business as a going concern. Liquidation means realising all assets the company (Ubig) have in order to return some of the funds owed to creditors. Floating charge is with Ubig and stadium is valued at ?5m therefore liquidator has a duty by law to re-coup as much as possible for creditors. The liquidator has the option on an asset worth ?5m (Tynecastle) if a CVA was to be agreed with liquidator it would have to be dependent on BDO offering ?5m (value of Tynecastle, or a little less due to work and hassle liquidator would need to work through to realise ?5m from Tynecastle). Liquidator of Ubig by law has to recoup as much as possible for creditors, this means BDO will need to offer in the area of ?5m after they have bought Ubig's shares for a nominal price with the promise of taking on the debt. This is based on my understanding of insolvency practice in the UK. Anyway, the whole of that was just to say that this news, even though it is promising, is not the main hurdle that HMFC and BDO have to jump. In fact this means relatively little as once agreement with Ubig is made the pence in the pound settlement will be based solely on the agreement with Ubig. Ubig are holding the cards here, their liquidator needs to get as much money back as possible and they have option over an asset valued at ?5m which by law they must try to pursue. If numbers are to believed total debt to Ubig is ?18m, liquidator whill accept ?5m (approximately 30% of the total debt owed). This 30p in the ?1 will be applied across the rest of the creditors as in a CVA position the same "agreement" must be applicable across all creditors. As Ubig and Ukio own over 75% of the debt they can agree or disagree to 30p in the ?1. If total debt is ?28m then 30% of this is ?8.4m whhich will be needed to agree a CVA. This announcement is good news but the big news would be if Ubig came along and made sounds as to what they would accept in exchange for debt and shares of HMFC. Sorry to put a downer on this guys and if my understanding is completely wrong then I am happy to be proved wrong! Ubig isn't in liquidation but is, subject to an appeal, in administration (or heading that way) and it is Ukio who hold the security over Tynecastle. But there is a germ in what you say about possible complications, which others have raised before. If via their security over Tynecastle, Ukio can recover more via liquidation than via a pence in the ? CVA settlement, then they may have an incentive to go down the liquidation route. The Ukio administrators statements haven't suggested this so far, and I don't think anyone really knows what the nature of Ukio's security over Tynecastle is, and how easily it would be realised. On another point of clarity, I don't think the shares are relevant - no-one is getting anything for them whatever happens! Link to comment Share on other sites More sharing options...
Hartley Jambo. Posted August 12, 2013 Share Posted August 12, 2013 Ubig isn't in liquidation but is, subject to an appeal, in administration (or heading that way) and it is Ukio who hold the security over Tynecastle. But there is a germ in what you say about possible complications, which others have raised before. If via their security over Tynecastle, Ukio can recover more via liquidation than via a pence in the ? CVA settlement, then they may have an incentive to go down the liquidation route. The Ukio administrators statements haven't suggested this so far, and I don't think anyone really knows what the nature of Ukio's security over Tynecastle is, and how easily it would be realised. On another point of clarity, I don't think the shares are relevant - no-one is getting anything for them whatever happens! One other point which I don't fully understand from reading the BDO report is the preferred part. It says if we exit via an agreed CVA then it doesn't apply. If we don't then an amount declared by BDO will be given to unsecured creditors. Now does this include Ubig? It's to do with there being a floating charge, can anyone explain what it means? Currently Ukio stand to keep it all via the secured debt is my take, is that right? I can't get the search tool to find the thread or post, but I definitely read it on here. Link to comment Share on other sites More sharing options...
Francis Albert Posted August 12, 2013 Share Posted August 12, 2013 One other point which I don't fully understand from reading the BDO report is the preferred part. It says if we exit via an agreed CVA then it doesn't apply. If we don't then an amount declared by BDO will be given to unsecured creditors. Now does this include Ubig? It's to do with there being a floating charge, can anyone explain what it means? Currently Ukio stand to keep it all via the secured debt is my take, is that right? I can't get the search tool to find the thread or post, but I definitely read it on here. Like you I am no expert and just trying to keep up. Anyway (as much as to encourage anyone to correct me as anything else) my understanding is that if a CVA is agreed there will be a preferred bidder at some stage (the one whose bid serves as the basis for the CVA proposal) but no preferred creditor - they will all get the 5p or 10p in the ? or whatever is agreed. But if we go into liquidation and the assets are sold off to the highest bidders then Ukio may, as a result of the security they hold, have a call on whatever Tynecastle fetches (in effect they will in be a preferred creditor, ie a secured creditor). The rest (the unsecured creditors) would get a share of what's left, likely to be close to zero, if anything. Link to comment Share on other sites More sharing options...
colinmaroon Posted August 12, 2013 Share Posted August 12, 2013 On the other hand FoH may be told "you're heading in the right direction but you have a bit to go". I am not getting too carried away by the fact that Ukio have agreed to continue to consider a CVA - what was their alternative? Liquidation, which were the last reported words out of their mouth, if I remember correctly. If there's no change, at least it seems that we've moved from glass half empty to glass half full. Link to comment Share on other sites More sharing options...
Francis Albert Posted August 12, 2013 Share Posted August 12, 2013 Liquidation, which were the last reported words out of their mouth, if I remember correctly. If there's no change, at least it seems that we've moved from glass half empty to glass half full. Yes, but it wasn't an option available to them today. (My glass is one of those squashy thin plastic things you take on picnics or into pub gardens from which it all too easy to spill things!). Link to comment Share on other sites More sharing options...
Gershwin Posted August 12, 2013 Share Posted August 12, 2013 Link to comment Share on other sites More sharing options...
Malmaroon Posted August 12, 2013 Share Posted August 12, 2013 One other point which I don't fully understand from reading the BDO report is the preferred part. It says if we exit via an agreed CVA then it doesn't apply. If we don't then an amount declared by BDO will be given to unsecured creditors. Now does this include Ubig? It's to do with there being a floating charge, can anyone explain what it means? Currently Ukio stand to keep it all via the secured debt is my take, is that right? I can't get the search tool to find the thread or post, but I definitely read it on here. My understanding is that because Tynecastle is subject to a standard security (formal charge) rather than being caught under the floating charge then the preferred part does not apply as the fixed charge holder i.e. UKIOS gets everything from the CVA. That is the unsecured creditors are screwed. Otherwise no fixed charge holder is going to agree to a CVA and split the proceeds when they hold a fixed charge on the property which they can try to realise to cover their debt. However I am no insolvency expert and my experience of this is mainly pre-administration days Link to comment Share on other sites More sharing options...
Hartley Jambo. Posted August 12, 2013 Share Posted August 12, 2013 Like you I am no expert and just trying to keep up. Anyway (as much as to encourage anyone to correct me as anything else) my understanding is that if a CVA is agreed there will be a preferred bidder at some stage (the one whose bid serves as the basis for the CVA proposal) but no preferred creditor - they will all get the 5p or 10p in the ? or whatever is agreed. But if we go into liquidation and the assets are sold off to the highest bidders then Ukio may, as a result of the security they hold, have a call on whatever Tynecastle fetches (in effect they will in be a preferred creditor, ie a secured creditor). The rest (the unsecured creditors) would get a share of what's left, likely to be close to zero, if anything. That's near my understanding but under an agreed CVA won't Ukio get all the money, assuming the CVA doesn't exceed the secured debt amount which is unlikely. Doesn't the secured creditor take preference in either case? Otherwise who would loan money secured against a property? More than happy to be corrected. My concern was do we need Ubig to vote for an agreed CVA to get the required %. If so does the "preferred part" means that it may be not in their interest. I'll try to find the report and quote it, it's easy to read, just don't know what it really amounts to. Link to comment Share on other sites More sharing options...
FarmerTweedy Posted August 12, 2013 Share Posted August 12, 2013 Correct me if I am wrong but Ubig are in liquidation and Ukio Bankas are in administration. Admistration means trying to save the business as a going concern. Liquidation means realising all assets the company (Ubig) have in order to return some of the funds owed to creditors. Floating charge is with Ubig and stadium is valued at ?5m therefore liquidator has a duty by law to re-coup as much as possible for creditors. The liquidator has the option on an asset worth ?5m (Tynecastle) if a CVA was to be agreed with liquidator it would have to be dependent on BDO offering ?5m (value of Tynecastle, or a little less due to work and hassle liquidator would need to work through to realise ?5m from Tynecastle). Liquidator of Ubig by law has to recoup as much as possible for creditors, this means BDO will need to offer in the area of ?5m after they have bought Ubig's shares for a nominal price with the promise of taking on the debt. This is based on my understanding of insolvency practice in the UK. Anyway, the whole of that was just to say that this news, even though it is promising, is not the main hurdle that HMFC and BDO have to jump. In fact this means relatively little as once agreement with Ubig is made the pence in the pound settlement will be based solely on the agreement with Ubig. Ubig are holding the cards here, their liquidator needs to get as much money back as possible and they have option over an asset valued at ?5m which by law they must try to pursue. If numbers are to believed total debt to Ubig is ?18m, liquidator whill accept ?5m (approximately 30% of the total debt owed). This 30p in the ?1 will be applied across the rest of the creditors as in a CVA position the same "agreement" must be applicable across all creditors. As Ubig and Ukio own over 75% of the debt they can agree or disagree to 30p in the ?1. If total debt is ?28m then 30% of this is ?8.4m whhich will be needed to agree a CVA. This announcement is good news but the big news would be if Ubig came along and made sounds as to what they would accept in exchange for debt and shares of HMFC. Sorry to put a downer on this guys and if my understanding is completely wrong then I am happy to be proved wrong! Thankfully, it is! You need to find a better information source than gubbed5-1inthebiggestderbyofalltime.net! Link to comment Share on other sites More sharing options...
FarmerTweedy Posted August 12, 2013 Share Posted August 12, 2013 Ubig isn't in liquidation but is, subject to an appeal, in administration (or heading that way) and it is Ukio who hold the security over Tynecastle. But there is a germ in what you say about possible complications, which others have raised before. If via their security over Tynecastle, Ukio can recover more via liquidation than via a pence in the ? CVA settlement, then they may have an incentive to go down the liquidation route. The Ukio administrators statements haven't suggested this so far, and I don't think anyone really knows what the nature of Ukio's security over Tynecastle is, and how easily it would be realised. On another point of clarity, I don't think the shares are relevant - no-one is getting anything for them whatever happens! Yes they have! It was only a week or so ago that this place went into utter meltdown when the Ukio administrator stated quite unequivocally that they would need a CVA offer to be worth as much to them as they think they'd realise from a liquidation, or it's into the blender we go! Link to comment Share on other sites More sharing options...
FarmerTweedy Posted August 12, 2013 Share Posted August 12, 2013 Like you I am no expert and just trying to keep up. Anyway (as much as to encourage anyone to correct me as anything else) my understanding is that if a CVA is agreed there will be a preferred bidder at some stage (the one whose bid serves as the basis for the CVA proposal) but no preferred creditor - they will all get the 5p or 10p in the ? or whatever is agreed. But if we go into liquidation and the assets are sold off to the highest bidders then Ukio may, as a result of the security they hold, have a call on whatever Tynecastle fetches (in effect they will in be a preferred creditor, ie a secured creditor). The rest (the unsecured creditors) would get a share of what's left, likely to be close to zero, if anything. According to this... http://www.bbc.co.uk/sport/0/football/23494323 ...the Dunfermline CVA included a differentiation between preferred and non-preferred creditors. I'd be surprised if any CVA for us didn't do likewise. Link to comment Share on other sites More sharing options...
Malmaroon Posted August 12, 2013 Share Posted August 12, 2013 The big difference is this "Dunfermline's situation is complicated by their stadium being owned by a separate company, East End Park Ltd, which is being handled by a different administrator, KPMG." Link to comment Share on other sites More sharing options...
Francis Albert Posted August 12, 2013 Share Posted August 12, 2013 My understanding is that because Tynecastle is subject to a standard security (formal charge) rather than being caught under the floating charge then the preferred part does not apply as the fixed charge holder i.e. UKIOS gets everything from the CVA. That is the unsecured creditors are screwed. Otherwise no fixed charge holder is going to agree to a CVA and split the proceeds when they hold a fixed charge on the property which they can try to realise to cover their debt. However I am no insolvency expert and my experience of this is mainly pre-administration days So why would the unsecured creditors vote for a CVA? Link to comment Share on other sites More sharing options...
Francis Albert Posted August 12, 2013 Share Posted August 12, 2013 According to this... http://www.bbc.co.uk/sport/0/football/23494323 ...the Dunfermline CVA included a differentiation between preferred and non-preferred creditors. I'd be surprised if any CVA for us didn't do likewise. There seem to be a few differences between our case and Dunfermline's not least that 80% of the debt seems in effect to have been forgiven by one creditor. Will a preferred/non-preferred distinction rely on the goodwill of the creditors (Ubig's administrator in practice) agreeing to it? Unclear why that turkey should vote for Christmas. My recollection of the Rangers case was that there was no preferred/non-preferred creditor distinction but I could be wrong. Link to comment Share on other sites More sharing options...
Hartley Jambo. Posted August 12, 2013 Share Posted August 12, 2013 Found the bit from BDO report. Under the provisions of the Section 176a act of the insolvency act 1986, the joint administrators must state the amount of funds available to unsecured creditors in respect of the prescribed part. This provision only applies where the company has granted a floating charge to a creditor since 15th September 2003 Since the company has granted a floating charge after this date, the provisions of the prescribed part will apply. Please note that should the company exit administration via a Company Voluntary Agreement (CVA) then the above would not apply. So if a CVA is agreed then it doesn't applying my take. If one isn't then BDO should tell the unsecured creditors what their pot will be. So is there a scenario where Ubig get nothing from a CVA as it goes to Ukio, but if they vote to reject a CVA do they get something from the preferred part. How does BDO calculate the preferred part, is it worth anything to Ukio, and does it make any real difference as to where the money will end up anyway? Link to comment Share on other sites More sharing options...
Francis Albert Posted August 12, 2013 Share Posted August 12, 2013 Yes they have! It was only a week or so ago that this place went into utter meltdown when the Ukio administrator stated quite unequivocally that they would need a CVA offer to be worth as much to them as they think they'd realise from a liquidation, or it's into the blender we go! Fair enough, though it isn't to me entirely clear that the terms of the security they hold over Tynecastle (which we don't know in detail) means they would sweep the pot through liquidation. If that is the case then it seems the other creditors are going to have to vote for a CVA that gives them close to nothing, otherwise the blender looms! Link to comment Share on other sites More sharing options...
livingstonjambo Posted August 12, 2013 Share Posted August 12, 2013 So why would the unsecured creditors vote for a CVA? Because UBIG is the largest unsecured creditor who are in turn in huge debt to Ukio, thus will do as the Ukio admins want. Link to comment Share on other sites More sharing options...
Hartley Jambo. Posted August 12, 2013 Share Posted August 12, 2013 So why would the unsecured creditors vote for a CVA? I don't think matters in our case, don't we get the required 75% (?) from the Lithuanians anyway. Dunfermline got a CVA at 0p in the pound as there was nothing of value to liquidise in their case, with the ground being separate. Link to comment Share on other sites More sharing options...
Francis Albert Posted August 12, 2013 Share Posted August 12, 2013 Because UBIG is the largest unsecured creditor who are in turn in huge debt to Ukio, thus will do as the Ukio admins want. Let's hope so. Link to comment Share on other sites More sharing options...
Francis Albert Posted August 12, 2013 Share Posted August 12, 2013 I don't think matters in our case, don't we get the required 75% (?) from the Lithuanians anyway. Dunfermline got a CVA at 0p in the pound as there was nothing of value to liquidise in their case, with the ground being separate. We need approval from both Ukio (secured) and Ubig (unsecured) to get a CVA. But if as advised Ubig's administrator will just do what Ukio's administrator tells them then it doesn't matter. I have my doubts its that simple - it depends on Lithuanian insolvency law and the rights of Ubig's creditors other than Ukio (of which I suspect there are some). Link to comment Share on other sites More sharing options...
kingantti1874 Posted August 12, 2013 Share Posted August 12, 2013 Christ Francis, ever think of posting anything positive in these threads Link to comment Share on other sites More sharing options...
Watt-Zeefuik Posted August 12, 2013 Share Posted August 12, 2013 I can't find any report of this online (and of course I'm too far away to pick up the radio signal), but from what it sounds like this is very good news. The Ukio administrators have three options in the long run that that they could instruct BDO to do: 1) Name FoH preferred bidder for CVA 2) Name Five Star Football (Massone) preferred bidder for CVA 3) Reject all bids, instruct BDO to prepare club for liquidation The reports this morning (citing anonymous sources, so who knows) were that BDO wanted the Ukio administrators to toss out FSF/Massone for, frankly, failing to do anything they were asked to do. It sounds like that may not have happened yet. This report sounds like the Ukio administrators have endorsed continuing to pursue at least one of options 1) or 2), and while 3) remains a possibility, it shows that the Ukio administrators see value in continuing to pay BDO to work towards a CVA. The reason the unsecured creditors would vote for a CVA is there's a small chance they might get a penny or two on the pound, whereas with liquidation, likely everything would go to Ukio as the secured creditor. Hopefully the next steps would be seeing FoH named as preferred bidder, then agreeing on the CVA. If both of those happens, we're out of administration, saved, and on our way to glory. Link to comment Share on other sites More sharing options...
Francis Albert Posted August 12, 2013 Share Posted August 12, 2013 Christ Francis, ever think of posting anything positive in these threads I'd love to share the OP's view, just as I'd have loved to welcome administration with the "one bound and we are free" optimism so many did on here. Instead I am still searching for the clarity we were promised. Link to comment Share on other sites More sharing options...
FarmerTweedy Posted August 12, 2013 Share Posted August 12, 2013 The big difference is this "Dunfermline's situation is complicated by their stadium being owned by a separate company, East End Park Ltd, which is being handled by a different administrator, KPMG." That is a difference in the situations of the two clubs, but it doesn't explain why their CVA would differentiate between preferred and non-preferred creditors while ours wouldn't. Link to comment Share on other sites More sharing options...
kingantti1874 Posted August 12, 2013 Share Posted August 12, 2013 I'd love to share the OP's view, just as I'd have loved to welcome administration with the "one bound and we are free" optimism so many did on here. Instead I am still searching for the clarity we were promised. I have no idea what your on about tbh.. Link to comment Share on other sites More sharing options...
Geoff Kilpatrick Posted August 12, 2013 Share Posted August 12, 2013 So why would the unsecured creditors vote for a CVA? It doesn't matter. Provided Ukio and UBIG do so the 75% hurdle is cleared. Link to comment Share on other sites More sharing options...
Watt-Zeefuik Posted August 12, 2013 Share Posted August 12, 2013 Unsecured creditors are SOL one way or the other. They stand to do ever so slightly better in a CVA. Under liquidation, the secured creditors get all the money until their debt is paid, then the unsecured creditors get a crack. Given that there's ?18M in secured debt, it will never reach that point. Link to comment Share on other sites More sharing options...
Captain Canada Posted August 12, 2013 Share Posted August 12, 2013 I hope this time next year we're all just discussing football rather than finance. Link to comment Share on other sites More sharing options...
FarmerTweedy Posted August 12, 2013 Share Posted August 12, 2013 So why would the unsecured creditors vote for a CVA? Firstly, they'd get nothing from liquidation either, so would have no good reason to vote against. Secondly, in this case UBIG own shares as well as being a creditor, and as well as a CVA proposal, there's likely (I think) to be an offer of a certain amount (probably not much) for UBIG's shareholding, which would be conditional on the CVA proposal being passed, which would actually give UBIG a reason to accept. Thirdly, again in this case, and again it's a case of I think UBIG's own debt is mainly to Ukio Bankas, and the UBIG admins will probably be under a lot of pressure to follow the Ukio Bankas admin's lead. Link to comment Share on other sites More sharing options...
Francis Albert Posted August 12, 2013 Share Posted August 12, 2013 It doesn't matter. Provided Ukio and UBIG do so the 75% hurdle is cleared. Is Ubig a secured creditor? Link to comment Share on other sites More sharing options...
Geoff Kilpatrick Posted August 12, 2013 Share Posted August 12, 2013 Is Ubig a secured creditor? Yes, but their security is the second ranked charge after Ukio, which effectively makes them unsecured. Link to comment Share on other sites More sharing options...
Francis Albert Posted August 12, 2013 Share Posted August 12, 2013 I have no idea what your on about tbh.. Others seem to have no difficulty. Would the use of more emoticons help? Link to comment Share on other sites More sharing options...
Footballfirst Posted August 12, 2013 Share Posted August 12, 2013 Is Ubig a secured creditor? Here is an extract of the assignment of the security from UBIG to Ukio on 6/12/12. It also shows the ranking between the securities, being : 1. Ukio's Standard Security 2. Ukio's Floating Charge 3. UBIG's floating charge. For the purposes of reading the document, the Assignee is Ukio, the Assignor is UBIG and the Chargor is Hearts. The value of the transaction was ?6.8M. The document doesn't cover the transfer or pledge re Hearts shares which seems to have taken place between December and April. The transfer of the balance of the ?15M of debt must also have been a later transaction. Link to comment Share on other sites More sharing options...
Hartley Jambo. Posted August 12, 2013 Share Posted August 12, 2013 Yes, but their security is the second ranked charge after Ukio, which effectively makes them unsecured. What do Ubig have their debt secured against, what makes it the 2nd ranked? As said just looking to get up to speed. Link to comment Share on other sites More sharing options...
Geoff Kilpatrick Posted August 12, 2013 Share Posted August 12, 2013 What do Ubig have their debt secured against, what makes it the 2nd ranked? As said just looking to get up to speed. See FF's post above. In the UBIG fantasy accounts, it is probably secured against HMFC shares! Link to comment Share on other sites More sharing options...
Footballfirst Posted August 12, 2013 Share Posted August 12, 2013 What do Ubig have their debt secured against, what makes it the 2nd ranked? As said just looking to get up to speed. Basically Hearts borrowed money from UBIG which UBIG had in turn embezzled borrowed from Ukio. So Ukio are at the top of the food chain and therefore can eat as much of the cake as they want before anyone else gets even a smell of it. Link to comment Share on other sites More sharing options...
Hartley Jambo. Posted August 12, 2013 Share Posted August 12, 2013 See FF's post above. In the UBIG fantasy accounts, it is probably secured against HMFC shares! So if I've read it correct and it's the second ranked as you say, does that mean the floating charge and the preferred part comes into play as I've mentioned above? Link to comment Share on other sites More sharing options...
Geoff Kilpatrick Posted August 12, 2013 Share Posted August 12, 2013 So if I've read it correct and it's the second ranked as you say, does that mean the floating charge and the preferred part comes into play as I've mentioned above? Yes. Based on what the rumoured offers are, Ukio can scoop the lot. Link to comment Share on other sites More sharing options...
portobellojambo1 Posted August 12, 2013 Share Posted August 12, 2013 In terms of who is first or second creditor does it really play a significant part at this end. There is only going to be one pot of money available, one offer, by whoever is deemed the preferred bidder, and that if it is to be split will be dealt with once it arrives in Lithuania. In terms of UKIO preferring the CVA route the only thing it could suggest is they do not believe that liquidating the club is going to achieve a higher pot of money, and it may be in their interest to get everything settled as quickly as possible to keep BDO's costs as low as they can, as those costs will be a deduction from the overall amount realised (and it appears their costs are very roughly ?100k per month). Link to comment Share on other sites More sharing options...
Hartley Jambo. Posted August 12, 2013 Share Posted August 12, 2013 Basically Hearts borrowed money from UBIG which UBIG had in turn embezzled borrowed from Ukio. So Ukio are at the top of the food chain and therefore can eat as much of the cake as they want before anyone else gets even a smell of it. Thanks that seems to confirm what I was thinking, that Ukio get the pot up to the value of their secured debt. Given the CVA won't cover the secured part then they get the CVA value, is that right? Link to comment Share on other sites More sharing options...
Geoff Kilpatrick Posted August 12, 2013 Share Posted August 12, 2013 In terms of who is first or second creditor does it really play a significant part at this end. There is only going to be one pot of money available, one offer, by whoever is deemed the preferred bidder, and that if it is to be split will be dealt with once it arrives in Lithuania. In terms of UKIO preferring the CVA route the only thing it could suggest is they do not believe that liquidating the club is going to achieve a higher pot of money, and it may be in their interest to get everything settled as quickly as possible to keep BDO's costs as low as they can, as those costs will be a deduction from the overall amount realised (and it appears their costs are very roughly ?100k per month). The only significance it will play is securing UBIG's shares and support for a CVA. UBIG still remains the wildcard in all of this. Link to comment Share on other sites More sharing options...
Footballfirst Posted August 12, 2013 Share Posted August 12, 2013 Yes. Based on what the rumoured offers are, Ukio can scoop the lot. But therein lies Ukio's quandary. If Ukio scoop the lot, then the unsecured creditors (including UBIG) would be minded to reject the CVA, thus it would fail. If a CVA fails, then there is no deal and money up front for Ukio*. All they would have is Tynecastle and the club would be liquidated, or have the assets/brand newco'd a la Sevco. *Technically Ukio could also claim the cash that remains within the club (e.g. from post admin Season Ticket sales, however, BDO would have first call on those funds to meet their expenses as administrators and/or liquidators. Link to comment Share on other sites More sharing options...
Geoff Kilpatrick Posted August 12, 2013 Share Posted August 12, 2013 But therein lies Ukio's quandary. If Ukio scoop the lot, then the unsecured creditors (including UBIG) would be minded to reject the CVA, thus it would fail. If a CVA fails, then there is no deal and money up front for Ukio*. All they would have is Tynecastle and the club would be liquidated, or have the assets/brand newco'd a la Sevco. *Technically Ukio could also claim the cash that remains within the club (e.g. from post admin Season Ticket sales, however, BDO would have first call on those funds to meet their expenses as administrators and/or liquidators. Quite, so the question remains what the claims and counter-claims are between Ukio and UBIG. If Ukio effectively call the shots with UBIG, then they can secure UBIG supporting 0p in the ? dividend and claim the proceeds. If not, interesting times remain. Link to comment Share on other sites More sharing options...
Footballfirst Posted August 12, 2013 Share Posted August 12, 2013 Thanks that seems to confirm what I was thinking, that Ukio get the pot up to the value of their secured debt. Given the CVA won't cover the secured part then they get the CVA value, is that right? See my last post if Ukio intend to claim all the proceeds (i.e. there will be no CVA in that event) Link to comment Share on other sites More sharing options...
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