Killie debt deal could avoid Administration

[Footballfirst]

From a Sunday Post article re the possible write down of Killie's major debt.

 

http://www.sundaypos...-plans-1.162896

 

It is difficult as a Hearts fan to see this move in a good light, considering our current position. However for Killie it would be a great move if it came off. For BoS, it may be that they feel that they will get more money back than through administration. I guess everyone's view would be tinted by the team that they follow.

 

 

Critics blast Kilmarnock debt write-off plans

 

By Andrew Picken, 8 December 2013 10.01am.

 

Premier League strugglers Kilmarnock are set to have millions of pounds worth of debt written off ? at the taxpayer?s expense.

 

The Sunday Post can reveal that the Bank of Scotland ? part of Lloyds Banking Group ? is considering writing off the majority of the ?9 million debt owed by Kilmarnock as part of a deal to settle the club?s future.

 

It is understood owner Michael Johnston has put a proposal to Lloyds, which is 32.7% owned by the taxpayer after the Government?s 2008 bail-out, that will see just a fraction of the debt taken on by Johnston and co-director Billy Bowie.

 

The football club would then be left with no bank debt, instead owing the cash ? between ?1 million and ?2 million to Bowie and Johnston in a ?soft? loan.

 

Johnston is under fire from a large section of the Ayrshire team?s fans who want him to give up control of the club and sell his stake to a community-led consortium. But it is understood that even if the club is sold to fans? groups and local business leaders, most of the club?s bank debt is still likely to be written off.

 

Critics last night hit out at the prospect of a taxpayer-funded bank, wiping out the debt.

 

Eben Wilson, director of campaign group Taxpayer Scotland, said: ?Taxpayers, as shareholders in this bank, should be wary that any write-offs do not benefit one individual.

 

?We need all toxic loans made in a time of madness to be made visible and accounted for.

 

?Whether clearing out toxic loans or standing firm on our behalf is the best course of action is up to the bank, but we hope that they will recognise we want the money back that has kept them trading in the past few years.?

 

The Sunday Post understands bosses at Lloyds have already classified Kilmarnock?s debts as ?impaired? ? an accountancy term for a debt unlikely to be repaid in full.

 

However, this does not mean they have given up on getting some of the money owed.

 

It is thought the plan being worked on is to try to avoid any prospect of the club going into administration, a move which would wipe out much of the money owed to the bank.

 

Paul Goodwin, head of Supporters Direct, which helps start football fan ownership schemes, said: ?A deal has to be struck with the bank but the hard reality is that no matter what the outcome is, the club has big debts which need to be addressed.?

 

Kilmarnock chairman Michael Johnston failed to respond to a request by The Sunday Post for a comment.

 

Lloyds Banking Group declined to comment.

[mattyw_1874]

From a Sunday Post article re the possible write down of Killie's major debt.

 

http://www.sundaypos...-plans-1.162896

 

It is difficult as a Hearts fan to see this move in a good light, considering our current position. However for Killie it would be a great move if it came off. For BoS, it may be that they feel that they will get more money back than through administration. I guess everyone's view would be tinted by the team that they follow.

As a tax payer I was a lot more pissed off at Rangers and HMRC than I ever will be with Killie. Essentially they are getting ?2 million for the 9 back, but if Killie go into admin they would be lucky to get that as for me it would be liquidation time for Killie.

[jambo89]

Oh dear. This could get messy!

 

I hope that we as hearts fans don't start acting like the sevco fans did with all this "it's no fair" stuff.

 

Having said, that it's not fair!!

[kettering jam tart]

One thing it will certainly do if the bank go ahead and write off the debt, it will open a massive can of worms that other clubs will use to try and do the same thing. In our case it was alot different but i think the least hearts could have done would have been to challenge the debt. But hey what do i know!

[Dusk_Till_Dawn]

None of our business.

[kingantti1874]

From the viewpoint of the league this should be treated as a points deductible event.. It is a CVA in all but name

[GavK1012]

None of our business.

 

Correct....spot on.....lets try and show a little class and not bleet on about others and how we were treated etc eyt....it would only be jealousy of the highest order...good luck to them......

[Footballfirst]

From the viewpoint of the league this should be treated as a points deductible event.. It is a CVA in all but name

 

They can't really do that otherwise Hearts would have been in administration years ago.

 

We had two debt for equity swaps for ?22M and three debt write offs totaling ?18M during the Vlad years.

[KF87]

 

Don't like the ethics of this, however I'm sure as you will understand yourselves, if it safeguards the future of the club then I won't be too upset. And it does mean that the bank get some of their money back rather than the alternative.

 

If it goes ahead I can see us being stuck with MJ forever though...

[scottish_chicP]

Someone who works for HMRC told me last night the shit will hit the fan around March. I don't want another club to go into admin but if it saves us....

[frankblack]

Its irrelevant if they go into admin or not. Our manager can't get us any points and we are in freefall.

[kingantti1874]

 

 

They can't really do that otherwise Hearts would have been in administration years ago.

 

We had two debt for equity swaps for ?22M and three debt write offs totaling ?18M during the Vlad years.

 

Hearts owner wrote off debt owed to his Companies, Killie are asking a publicly owned bank to write off debt. I think they are 2 distinct events.. Why are they signing players like kris boyd when struggling this badly.. I hold no grudge against Killie, but it is a bit unfair

[Rudolf's Mate]

As much as I'd love to criticise, I don't think I can!

 

They're doing no different from many, many other companies up and down the country. It rankles because of our situation but if we weren't in this would we really be bothered?! Probably not.

 

 

Sent from my iPhone using Tapatalk

[Paulie Walnut]

Nothing to do with us and if they pulled it off well done, but the facts are that this kind of deal will never happen legally. I would be utterly astonished if BOS done a deal like this considering the billions of other bad loans they have out there, it would set a precedent for them that would ultimately collapse the bank.

 

I would suggest that the 'journalist' who wrote that piece has been feed this by Johnson as an idea and he has taken it to print.

[amadjambo]

 

 

Hearts owner wrote off debt owed to his Companies, Killie are asking a publicly owned bank to write off debt. I think they are 2 distinct events.. Why are they signing players like kris boyd when struggling this badly.. I hold no grudge against Killie, but it is a bit unfair

 

Barr and Bouzid too. The sort of experienced players we can't sign.

[Tommy Brown]

I have no desire to see Killie go out the game.

 

The Sunday Post understands bosses at Lloyds have already classified Kilmarnock?s debts as ?impaired? ? an accountancy term for a debt unlikely to be repaid in full.

 

I would imagine nearly every football club in the UK have these "impaired" debts.

 

If they were to pull off this deal, there must be stringent rules on debts ever mounting up again.

[KF87]

 

Nothing to do with us and if they pulled it off well done, but the facts are that this kind of deal will never happen legally. I would be utterly astonished if BOS done a deal like this considering the billions of other bad loans they have out there, it would set a precedent for them that would ultimately collapse the bank.

 

I would suggest that the 'journalist' who wrote that piece has been feed this by Johnson as an idea and he has taken it to print.

 

Jim Spence (I think) reported that the bank were desperate to get some of this money back and were preparing to leave Scottish football etc, so might be summat in it.

[Paulie Walnut]

Hearts owner wrote off debt owed to his Companies, Killie are asking a publicly owned bank to write off debt. I think they are 2 distinct events.. Why are they signing players like kris boyd when struggling this badly.. I hold no grudge against Killie, but it is a bit unfair

 

Have i just stumbled on to Hibs.net? Thats the kind of push they come out with.

[Guest oldcastlerock2012]

Not a hope of this happening. What this shows is just how desperate Killie's situation is. No wonder Johnston was a leading voice in trying to keep Rangers in the SPL.

[Independence]

None of our business.

 

Correct and good luck to them despite ....1965!

[KF87]

 

 

 

Barr and Bouzid too. The sort of experienced players we can't sign.

 

Can't comment on Barr and Bouzid as I don't know about their wages.

 

But been heard that Boydie is on more than last season but still bonus based, and stayed with us so he could stay close to his family

[kingantti1874]

 

 

Have i just stumbled on to Hibs.net? Thats the kind of push they come out with.

 

Hearts are in administration and have lost our entire 1st team squad and will be relegated Barr a miracle. Killie are in effect proposing a CVA without the points deduction, good luck to them if they get away with it but I think it's a valid point.

[Jambos1983]

So this would be a creditor voluntarily agreeing to take a hit on a debt?

[GBJambo]

So this would be a creditor voluntarily agreeing to take a hit on a debt?

 

Yes

[Jambos1983]

 

 

Yes

 

Big can of worms about to opened then

[Guest oldcastlerock2012]

Hearts are in administration and have lost our entire 1st team squad and will be relegated Barr a miracle. Killie are in effect proposing a CVA without the points deduction, good luck to them if they get away with it but I think it's a valid point.

 

Can't see how a publicly funded bank can be seen to write off a debt like that. It would be far more damaging and expensive long-term than any initial hit. Admin for Killie looks like a given to me. Basically they seem to be saying to the bank "We're heading for admin and you'll get nothing so why not do a deal now?"

[Footballfirst]

BoS/HBOS/Lloyds do have a history of doing deals like this, particularly debt for equity swaps. e.g. Murray International Holdings.

 

RBS have recently been in the news for bullying small businesses into doing deals.

[amadjambo]

So this would be a creditor voluntarily agreeing to take a hit on a debt?

 

A largely tax payer owned creditor.

 

Good luck to Killie if they pull it off, but I'm actually annoyed that MJ expects the taxpayers to take a hit but not himself. Why isn't he writing off the debt to himself at the same time?

[Chewie]

In the end, it probably wouldn't matter if Killie went into administration, as we'd probably get relegated anyway.

 

 

We've cocked up majorly so far this season and I can't see it getting any better. Plus, their squad is probably better than ours too.

[Jambos1983]

In the end, it probably wouldn't matter if Killie went into administration, as we'd probably get relegated anyway.

 

 

We've cocked up majorly so far this season and I can't see it getting any better. Plus, their squad is probably better than ours too.

 

No danger. If they went into admin they'd go down. If they can get a cva without officially going in to admin they've played a blinder. It stinks though

[Jabba]

 

 

Can't see how a publicly funded bank can be seen to write off a debt like that. It would be far more damaging and expensive long-term than any initial hit. Admin for Killie looks like a given to me. Basically they seem to be saying to the bank "We're heading for admin and you'll get nothing so why not do a deal now?"

 

I would imagine most lenders would be happy to take a reduced settlement figure for a third of a debt rather than take 5-10% a few months later. It would be naive to think that this is a precedent.

[kingantti1874]

 

 

Can't see how a publicly funded bank can be seen to write off a debt like that. It would be far more damaging and expensive long-term than any initial hit. Admin for Killie looks like a given to me. Basically they seem to be saying to the bank "We're heading for admin and you'll get nothing so why not do a deal now?"

 

Banks wrote down bad debt every day, it's just that in the past they could afford to hang on and therefore make debtors think twice.. These days, they just want to move on... My point is, Killie should be facing the same sanctions hearts are

[Footballfirst]

It's certainly something that the SPFL and SFA need to look at. FFP and the game's integrity relies on their being no sugar daddies or "unfair" shedding of debt.

 

As I posted earlier Hearts did benefit from debt write offs, so we don't really have any right to call foul on any similar deal the Killie can come up with.

 

I don't know what sanctions would be appropriate for such events, e.g. points deductions, transfer embargoes etc. I would guess that raising money through a share issue to pay off debt would be ok, but it's all a bit of a minefield.

[The Old Tolbooth]

Us Hearts fans have no right to take any moral high ground ffs

 

Let's just take our punishment gracefully unlike the currant buns, move on, and concentrate on getting the club back for good and starting again.

[Victorian]

This IS our business actually. Hearts would have every right to get clarification regarding the SFA's / League's standpoint on such a scenario for a club.

 

It's not about crying foul. It's not about being like Sevco fans. It's not about trying to find a loophole to save our own necks. It's about asking the question of the authorities to see what their opinion is regarding the possible circumvention of insolvency event rules.

 

We were criticised in some quarters for seemingly delaying administration to avoid instant relegation. We have the right to ask whether or not the authorities will look upon this kind of thing as administration dressed up as something else.

 

I invite the 'it's no oor business' gang to get off their perches and look at this from OUR BEST INTERESTS.

[kingantti1874]

Us Hearts fans have no right to take any moral high ground ffs

 

Let's just take our punishment gracefully unlike the currant buns, move on, and concentrate on getting the club back for good and starting again.

 

I don't think anyone is taking the moral high ground tbh. We were messed over financially and are now paying for it.. Fair doos, don't see why we can't have a wee moan if another club gets away with it at our expense.. As I say fair play to Killie if they pull it off have no wish to see another club hit rock bottom

[The Old Tolbooth]

I don't think anyone is taking the moral high ground tbh. We were messed over financially and are now paying for it.. Fair doos, don't see why we can't have a wee moan if another club gets away with it at our expense.. As I say fair play to Killie if they pull it off have no wish to see another club hit rock bottom

 

The way I see it is that if they manage to broker a deal with their creditors to stave off administration and/or liquidation, then good luck to them. Our situation was far worse than theirs, and far more complicated too for us to even consider going down a similar route, although I wouldn't be surprised if the SFA invent another ruling to punish Killie as they appear to change rules to suit themselves.

[jamboinglasgow]

It's certainly something that the SPFL and SFA need to look at. FFP and the game's integrity relies on their being no sugar daddies or "unfair" shedding of debt.

 

As I posted earlier Hearts did benefit from debt write offs, so we don't really have any right to call foul on any similar deal the Killie can come up with.

 

I don't know what sanctions would be appropriate for such events, e.g. points deductions, transfer embargoes etc. I would guess that raising money through a share issue to pay off debt would be ok, but it's all a bit of a minefield.

 

Have to admit thats where I am at. We cant really complain about this. If Killie arrange it then fair play to them.

 

But as you say the SPFL have to look into this, I dont think they would do anything in this exact case, but they may need to consider whether future occasions deserve any punishment.

[kingantti1874]

 

 

The way I see it is that if they manage to broker a deal with their creditors to stave off administration and/or liquidation, then good luck to them. Our situation was far worse than theirs, and far more complicated too for us to even consider going down a similar route, although I wouldn't be surprised if the SFA invent another ruling to punish Killie as they appear to change rules to suit themselves.

 

We are brokering a deal with our creditors - It's all terminology but it's be daft it to ask the question, personally - after the money I (we) have collectively had to invest to ensure our survival I don't think it's out of order to hope that we escape relegation by any means possible

[Geoff Kilpatrick]

Pity HBoS wanted Tynie sold ten years ago.

[The Old Tolbooth]

We are brokering a deal with our creditors - It's all terminology but it's be daft it to ask the question, personally - after the money I (we) have collectively had to invest to ensure our survival I don't think it's out of order to hope that we escape relegation by any means possible

 

I see your point mate, and it would be daft for Hearts not to at least make enquiries into the legalities of this I guess, but I just think that we've been so badly run that we need to take our punishment and get on with it, I'm with you on the score that if another club goes into administration and it saves us, then tough shit on them though

[Ibrahim Tall]

Nice one, think i might go into the local hbos branch and offer ?5,000 upfront in exchange for my whole mortgage.

[Diadora Van Basten]

It sounds more like wishful thinking from Killie and I can't see the bank of Scotland accepting it because of the precedent it would set.

[portobellojambo1]

As much as I'd love to criticise, I don't think I can!

 

They're doing no different from many, many other companies up and down the country. It rankles because of our situation but if we weren't in this would we really be bothered?! Probably not.

 

 

Sent from my iPhone using Tapatalk

 

This. The only reason some are getting a bit upset is because of the position we are in. If we weren't in administration I don't think we would be bothered at all. And lets not forget the Kilmarnock fan who has posted on this thread has pointed out the major drawback in this action, Kilmarnock will remain lumbered with someone they desperately want to get rid of.

 

And if I were a shareholder in BoS and was told that as part of a debt cleanup project either next to nothing or ?2 million could be recovered it wouldn't be a difficult decision. Putting Kilmarnock out of business by insisting on Liquidation/wind up, then getting little financial return isn't going to benefit Lloyds shareholders in the slightest.

[Hungry hippo]

The debt being marked as impaired means nothing. I will be stunned if Lloyds agree to such a significant write off as suggested in the article. I do think the bank will want to restructure in a way that avoid insolvency if possible.

 

The article is very vague about the stage of discussions and likelihood of agreement between Killie and the bank.

 

I personally think if they could strike a deal then there should not be any sanctions but can't see the vast majority of the debt being written off by the bank. The main reason for this being the precedent that would be set.

[super_vlad]

This only amuses me because it was hbos who forced Murray to sell to Whyte in the first place!!

[DETTY29]

Killie cant suffer an insolvency event until the Court of Session is involved. And this is what they are trying ti avoid. And therefore no points deduction.

 

We gained from being with UKIO and not HBOS at the start of the Romanov regime, but its bitten us in the erchie this type of deal couldn't have been negotiated a couple of years ago. Hey ho.

 

At this rate Hibs could be the only team in Scotland with a debt they can serve to the detriment of on pitch capability.

 

Hey ho.

[Jarhead]

It might be splitting hairs but we did not have a debt write off. We had a debt for equity swap.

Ourselves, Dunfermline and Rangers all have a right to question this as all our roads to ruin started with HBoS.

[Rocco_Jambo]

There's no insolvency event so shouldnt be any sanctions. If a bank or any other creditor is willing to amend the credit agreement they have with Kilmarnock then that's a matter for them. We did the exact thing to our advantage by negotiating with Sevco to get the Templeton money in advance rather than instalments. It happens in business.

[Allowayjambo1874]

No issue if Killie can pull it off though it means that MJ has got a get out of jail free card and will smugly remain there which will annoy their fans intensely. I can see them down to 3k average next year! However does the bank just accept peanuts from every club now and write off all the debts? If I was chairman at another club I would be marching in to BOS and asking for loan/overdraft to be written off too.

 

One thing that's not been mentioned though is the ?4m hotel that they own. Why write of ?9m when you can possibly get a third of that back without even affecting the football club.