Topic: Liverpool owner Hicks selling Texas Rangers shares

[R.A.La]

I see. Thanks

[west_london_red]

While it's quiet...i have a question (sorry not got a clue about the world of finance)

Someone said earlier in the thread that if Hicks went bankrupt, that the other tumor would then take over his share of LFC. But wouldn't that be an asset that his creditors would want sold off to recoup some money?

Ta in advance.

Not that straight forward.

Kop Holdings owes money to the banks, not Gillet or Hicks. If one of them cant pay the loans, and the other one covered both of them, they would then have to decide amoungst themselves how ownership is adjusted.

If one of them has the money and the other one doesnt, then Kop Holdings would still be in breach of its loan agreement unless additional investors can be found.

It would not be the case that if one defaults, that the other automatically becomes 100% owner.

[Graham Smith]

You need to differentiate between the agreement between them both (their shareholding agreement) and the result of a bankruptcy. This is further complicated by the fact that they could go bankrupt in either or both jurisdictions (UK and US).

Shareholders' Agreement

It wouldn't be unusual for the agreement between them to have some mechanism to deal with the bankruptcy or death of either party - usually this would be that the share has to be offered to the survivor or non-bankrupt.

If this existed then a "fair" market value would have to be established and there'd be a deadline by which the survivor or non-bankrupt would have to purchase the shares. Any payment for the shares would go to the Trustee in bankruptcy or person entitled to his estate.

However this would be further complicated by any loan agreement with the Banks - no doubt they have some provision in place to make certain that their security (the shares) couldn't be transferred without their agreement or payment in full of what was due to them in the evnt of a personal bankrupcty or death.

Bankruptcy

If one of them went bankrupt in this country then any of their personal assets are fair game for a trustee to seek to get hold of - but they must be personal assets.

So, the company's assets (the Club) would not be claimable as they are owned by the company - but the shares owned by the individual in the company would be fair game and could be realisable as per above.

All of this is based upon personal bankruptcy - the insolvency of the companies is a whole different kettle of fish as to what the result of that would be.

[guyko21]

I think it's reasonable to assume that any potential suitors are biding their time until it's squeaky bum time for H&G as the July deadline approaches. 

The re-fi is highly unlikely to happen on terms that they could handle, hence the mad scramble to dispose of their other assets, which no-one wants at their unrealistic prices.  Furthermore, even if they dispose of their assets on time, they're so leveraged, combined with the fact that the asset values are (a) depressed anyway and (b) depressed even further as any sale of them would be akin to a fire-sale, that such disposals wouldn't actually release that much cash anyway. 

So, it looks like we're stuck with this waiting game until July and all we can do is pray that H&G run out of options and blink first.

[Gromit]

I think it's reasonable to assume that any potential suitors are biding their time until it's squeaky bum time for H&G as the July deadline approaches. 

The re-fi is highly unlikely to happen on terms that they could handle, hence the mad scramble to dispose of their other assets, which no-one wants at their unrealistic prices.  Furthermore, even if they dispose of their assets on time, they're so leveraged, combined with the fact that the asset values are (a) depressed anyway and (b) depressed even further as any sale of them would be akin to a fire-sale, that such disposals wouldn't actually release that much cash anyway. 

So, it looks like we're stuck with this waiting game until July and all we can do is pray that H&G run out of options and blink first.

Apologies if you've already answered this before guyko, but what do you or your contacts think will happen if H&G simply say to the banks, "we can't afford your new terms, but here's what we can do"... 

is it more likely the banks (not wanting the hassel of owning a football club) give in to H&G or will they 'repossess ' the club and sell us on?

thanks.

[Something Else]

I think it's reasonable to assume that any potential suitors are biding their time until it's squeaky bum time for H&G as the July deadline approaches. 

The re-fi is highly unlikely to happen on terms that they could handle, hence the mad scramble to dispose of their other assets, which no-one wants at their unrealistic prices.  Furthermore, even if they dispose of their assets on time, they're so leveraged, combined with the fact that the asset values are (a) depressed anyway and (b) depressed even further as any sale of them would be akin to a fire-sale, that such disposals wouldn't actually release that much cash anyway. 

So, it looks like we're stuck with this waiting game until July and all we can do is pray that H&G run out of options and blink first.

i would hope at this point, any potential new owners were getting ready to go through dd

[guyko21]

Apologies if you've already answered this before guyko, but what do you or your contacts think will happen if H&G simply say to the banks, "we can't afford your new terms, but here's what we can do"... 

is it more likely the banks (not wanting the hassel of owning a football club) give in to H&G or will they 'repossess ' the club and sell us on?

thanks.

I think the banks would force a sale.  We're desirable to the right owners who don't need an immediate cash return.  The banks do not want to re-fi H&G.  Credit is still very tight and their track record is abysmal.  Re-fi on favourable terms is apparently out of the question. 

Seems that H&G are playing a game of brinkmanship but as ever with these two charlatans, I don't think they appreciate (a) how the world has turned full circle and (b) the kind of businessmen they're now up against. 

[lfctitch]

i would hope at this point, any potential new owners were getting ready to go through dd

Got to agree with you, any reasonable new owners would want to spend at least a month on Due Diligence, I can't quite remember how long Dubai were, but it was quite a while, where as Hicks and Gillett had completed with 3-4 days roughly. I think it would have to start within the next 2 weeks; thus allowing enough time for all the paper work, lawyers involved, signatures. Its a lengthy process, I doubt potential new owners will wait much longer before the move is made.  I honestly believe if there is anybody out there then we should here either way by mid-June. And I doubt; if DD is being done, that something or someone wont leak it to the press. And as yet nothing has leaked.

If it has all been done behind closed doors, and is to be announced later; it is possible, however it worries me, if RBS do refinance we will hear about it by the end of this month, and GG and TH will be rubbing there hands together.

[kopside]

Kuwaitis are in the UK apparently.. dont know nothing else

[Something Else]

If it has all been done behind closed doors, and is to be announced later; it is possible, however it worries me, if RBS do refinance we will hear about it by the end of this month, and GG and TH will be rubbing there hands together.

If they were refinancing and it went through it would e leaked, straight away in order to show other people/ banks, investors etc, hey look we are ok, they back us etc

[shelovesyou]

If they were refinancing and it went through it would e leaked, straight away in order to show other people/ banks, investors etc, hey look we are ok, they back us etc

Thats a very good point SE , good man (or woman of course)   
We know now how these wasters work and they wouldnt be able to resist leaking it ,
time is running out for them . . .

[shelovesyou]

Kuwaitis are in the UK apparently.. dont know nothing else

What ? the ones who want to buy the club ? or just random Kuwaities in general ? 

[zamagiure]

Kuwaitis are in the UK apparently.. dont know nothing else

An invasion

[Ronnie1932]

What ? the ones who want to buy the club ? or just random Kuwaities in general ? 

[lfctitch]

Kuwaitis are in the UK apparently.. dont know nothing else

I saw a Kuwati the other day, very nice fella indeed.

[Something Else]

Kuwaitis are in the UK apparently.. dont know nothing else

your a daily mail reader arnt you.

Has one taken your job?

[lfctitch]

If they were refinancing and it went through it would e leaked, straight away in order to show other people/ banks, investors etc, hey look we are ok, they back us etc

You make a good point. But I have to ask - Surely RBS have said one way or another by now? And if there are certain things they have to attain to, why aren't GG and TH doing even more? They seem rather quiet, apart from the show at Arsenal.

[lfctitch]

your a daily mail reader arnt you.

Has one taken your job?

How posh are you; 'Has One'

Your a Independent reader.

[Something Else]

How posh are you; 'Has One'

Your a Independent reader.

yes im the posh kuwati who took his job

You make a good point. But I have to ask - Surely RBS have said one way or another by now? And if there are certain things they have to attain to, why aren't GG and TH doing even more? They seem rather quiet, apart from the show at Arsenal.

They may well have, the way i see it is their is an offer to refinance on the table, but the terms are not agreeable with the americans, too much guarantees and equity required etc. Yanks then playing a bargaining game and RBS out for what they can get, if the yanks can agree to a deal that RBS feel is no risk, then RBS will refinance as its almost free profit

However i think that there is a better chance of a buyout....

Yanks has little equity, guarentees the banks value and would accept

[lfctitch]

yes im the posh kuwati who took his job
They may well have, the way i see it is their is an offer to refinance on the table, but the terms are not agreeable with the americans, too much guarantees and equity required etc. Yanks then playing a bargaining game and RBS out for what they can get, if the yanks can agree to a deal that RBS feel is no risk, then RBS will refinance as its almost free profit

However i think that there is a better chance of a buyout....

Yanks has little equity, guarentees the banks value and would accept

Do you believe any of the so called buyers are really interested? Or is it so far all idle speculation? Do you expect the Kuwati's (if anyone) or somebody completely out of the blue?
Do you think any of the so called buyers have been planted by GG and TH?
How will they play the PR game over the next month?

[4pool]

You need to differentiate between the agreement between them both (their shareholding agreement) and the result of a bankruptcy. This is further complicated by the fact that they could go bankrupt in either or both jurisdictions (UK and US).

Graham

Isn't Kop Holdings Ltd registered in the Cayman Islands or some such and not the UK or the USA?

[Something Else]

Do you believe any of the so called buyers are really interested? Or is it so far all idle speculation? Do you expect the Kuwati's (if anyone) or somebody completely out of the blue?
Do you think any of the so called buyers have been planted by GG and TH?
How will they play the PR game over the next month?

Baring in mind we have been linked with a fair few "buyers" i would not be suprised if some used it just as a way of exposure, and then at other times the yanks leaked buyers coming in in an attempt to get more interested, trying to wip up some interest.

There are less people interested in buying us than 18 months ago thats for sure, and i would imagine those who are still interested would have differing business plans now compared to then...

Dont know who is about and who is interested, however i would not be suprised if new owners are in place by the middle of June with some signings announced the first or second week of June.

[No666]

According to a respected poster on TIA the Al Kharafis are in the UK atm. Assume those are the Kuwaitis Kopside was referring to. (I've got lost amongst the names - are they the rich ones we thought had dropped out, or the poor ones who have a parliamentary impasse to occupy their minds?)

[lfctitch]

According to a respected poster on TIA the Al Kharafis are in the UK atm. Assume those are the Kuwaitis Kopside was referring to. (I've got lost amongst the names - are they the rich ones we thought had dropped out, or the poor ones who have a parliamentary impasse to occupy their minds?)

There the rich ones... £9 billion or something.

[kopside]

your a daily mail reader arnt you.

Has one taken your job?

SHOWMETHEMONEY off TIA thanx

[Something Else]

SHOWMETHEMONEY off TIA thanx

should one be impressed by this information?

[electricghost]

Thats a very good point SE , good man (or woman of course)   

Depends who you ask. Fry would probably go with woman 

[RedBoywonder]

should one be impressed by this information?

I suggest one takes it with the usual pinch of salt.

[maj]

Kuwaitis are in the UK apparently.. dont know nothing else

No disrespect, but this means sweet f all. id love to know who so called leaked they are in the uk

[maj]

should one be impressed by this information?

Didnt showmethemoney say something was gonna happen 2 weeks?

[shelovesyou]

should one be impressed by this information?

to be fair he's a genuine poster on there ,
not one to post for the sake of it and I think he has
good contacts in the financial world

[Graham Smith]

Graham

Isn't Kop Holdings Ltd registered in the Cayman Islands or some such and not the UK or the USA?

Mel, they are but I was dealing with the personal insolvency of either of our owners not their corporate holdings or investments.

[manifest]

Graham

Isn't Kop Holdings Ltd registered in the Cayman Islands or some such and not the UK or the USA?

ahh yes...the cayman island tax loopholes that obama expressly referred to as needing to be closed cos corporations in america are paying 2.3% tax rate and impoverishing the rest of the nation. The noose on the likes of hicks is finally being tightened. 

[kopside]

should one be impressed by this information?

I dont know how one should be impressed, i just passed on the information... I will second that SMTM is a good poster Imo.

[Liverbird 2010]

Whats happenin kiddos back from my hols, BTW sheikh Mo was in our hotel with his entourage I was scared shitless didnt say a word. Any news?

[manifest]

the usual rollercoaster lynds. the only thing of substance is Hicks defaulting on a $10 million interest payment on his american sports teams, and gillett trying to sell his socks, knickers and well, anything.....some very bad news on their financial fronts, which definately puts them under more pressure our end. Otherwise, speculation city.....

[Jack Slater]

While it's quiet...i have a question (sorry not got a clue about the world of finance)

Someone said earlier in the thread that if Hicks went bankrupt, that the other tumor would then take over his share of LFC. But wouldn't that be an asset that his creditors would want sold off to recoup some money?

Ta in advance.

What I said was that we dont know what Kop Holding's company rules say about bankruptcy.  It is the actual constitution of the company which is crucial first and foremost.

Some company's have rules which say that shares in the company automatically revert to the company in the event that the shareholder becomes bankrupt.  So if Kop has that rule, and if TH became personally bankrupt in the next couple of weeks, then his shares go back to the company, and GG would therefore own 100% of the issued shares.  If he wanted to sell half (or all), no-one could stop him.

Alternatively, if Kop does NOT have that rule, then TH's shares would go to the insolvency practioner appointed to handle TH's affairs (called "trustee in bankruptcy" in the UK; dont know what the US terminology is).  In that case, the shares could only be sold by the Trustee with GG's agreement.   So if GG wanted to buy them, he could. 

What the Trustee would NOT be obliged to do would be to help Kop find half of the (approx £320m) debt owed to RBS/Wachovia.  So, almost certainly, GG would be happy to agree to TH's shares being transferred to any new investor willing to help clear Kop's debt.  The Trustee would also be happy with that arrangement, since it would stop the personal guarantees being triggered, and thus stop TH's debts increasing.

So, one way or the other, GG would have  control over who he shares ownership with (or else who he sells to 100%). 


But as I said before, I dont think that this scenario is at all likely.  I dont think that TH will become personally bankrupt before July.

[Jack Slater]

is it more likely the banks (not wanting the hassel of owning a football club) give in to H&G or will they 'repossess ' the club and sell us on?

The banks wouldnt have any hassle of "owning".

If they choose to exercise their security, then they have an administrator appointed who would have the right to sell players or other assets individually, and to sell the club as a going concern.

The administrator can run the club in the sense of paying other debts, if they choose to.  ie if they feel that it is necessary to do so in order to preserve the value of the club as a going concern.

If this happens, LFC will, in any case, be banned from signing new players.  So the administrator wouldnt have the hassle of trying to make new signings even if they wanted to (which they wouldnt).

We'd also have a 9 point ban.


If Kop Holdings does not pay every penny on the exact date that the debt is due, then the banks will have the right to appoint an administrator (with court approval) immediately if they choose to.   The banks might not choose to straight away.  They might give G&H a bit of grace to come up with the funds, &/or allow G&H to enter an arrangement with new owners who'd pay off the debt.  But the banks dont have to allow any grace period if they dont want to.  Almost certainly a grace period would only be allowed if EITHER a large (£50m say) payment was made in July, OR there was absolute proof (ie a letter of intent) that a new buyer would step in within a few weeks.

[Gromit]

The banks wouldnt have any hassle of "owning".

If they choose to exercise their security, then they have an administrator appointed who would have the right to sell players or other assets individually, and to sell the club as a going concern.

The administrator can run the club in the sense of paying other debts, if they choose to.  ie if they feel that it is necessary to do so in order to preserve the value of the club as a going concern.

If this happens, LFC will, in any case, be banned from signing new players.  So the administrator wouldnt have the hassle of trying to make new signings even if they wanted to (which they wouldnt).

We'd also have a 9 point ban.


If Kop Holdings does not pay every penny on the exact date that the debt is due, then the banks will have the right to appoint an administrator (with court approval) immediately if they choose to.   The banks might not choose to straight away.  They might give G&H a bit of grace to come up with the funds, &/or allow G&H to enter an arrangement with new owners who'd pay off the debt.  But the banks dont have to allow any grace period if they dont want to.  Almost certainly a grace period would only be allowed if EITHER a large (£50m say) payment was made in July, OR there was absolute proof (ie a letter of intent) that a new buyer would step in within a few weeks.

Is this similar to the situation West Ham are facing?

"West Ham United's outgoing owner, Bjorgolfur Gudmundsson, has revealed that his personal liabilities stand at £301m and admitted he has no idea whether he is bankrupt or even if he will be able to keep his home. A group of his creditors, led by the Icelandic bank Straumur, is expected to take control of West Ham shortly after the end of the season, ending Gudmundsson's association with the club."

http://www.guardian.co.uk/football/2009/may/07/west-ham-united-ownership-bjorgolfur-gudmundsson

I have been wondering what, if anything, Gillette and Hicks will lose if the banks repossess us.  Personal guarantees have been mentioned before, but does this mean they will actually lose money from their own pocket?  If not, then I guess they can leave this hanging until the very last minutes of the loan deadline.

[Jack Slater]

Is this similar to the situation West Ham are facing?

Not exactly the same.  Not if he is the sole owner of the shares. 

I dont know the details of WHam's situation.  But one issue (injustice?) is this.  If the owner of a club company is an individual  (eg Abramovic  - dont know about the Wham guy) who goes bankrupt, then the club isnt penalised, so long as the club company doesnt go insolvent.

But if the owner of the club company is another company (like the LFC company is owned by Kop), and the owner goes insolvent, then the club company is penalised (points deduction, transfer ban).  TH or GG going personally insolvent is OK though - just so long as Kop doesnt  (and "insolvency" includes having an administrator appointed, even if the administrator eventually satisfies all the creditors).

I have been wondering what, if anything, Gillette and Hicks will lose if the banks repossess us.  Personal guarantees have been mentioned before, but does this mean they will actually lose money from their own pocket?  If not, then I guess they can leave this hanging until the very last minutes of the loan deadline.

If Kop fails to meet its debts, then the personal guarantees may be triggered.  ie TH and GG may have to stump up their own cash.

The problem is that BEFORE that happens (ie before GG and TH actually have to write a cheque), the bank is likely to have an administrator appointed meaning that LFC will face the consequences mentioned above.

The amount that GG & TH will eventually have to pay is the outstanding debt after the bank has sold Kop &/or its assets, plus added on all its legal costs and late fees, etc.  (Up to a limit of about £220m jointly).