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Re: Ownership of Club Changes : Fri Jan 31, 2014 3:11 pm

Adeybull, returning on 27/11/13 and commenting on the report of Bradford Bulls (2014) Ltd being incorporated wrote:

I've stayed away from places like this since early April. Making an exception, given the potential for real damage from uninformed or malicious comment. Then, as as you were.

My take on what I have read. No inside info, nothing other than what I have read. In particular, though, the wording of the OP's post - which may or may not be a bit mischievous but certainly IMO encourages jumping to conclusions - does not necessarily say what some of you guys look to have assumed it means.

1 - Yes, a new company Bradford Bulls (2014) ltd looks to have been incorporated. Forget all the waknerage from commercial sites, just go look at Companies House http://www.companieshouse.gov.uk for free.

2 - No, this does NOT in itself necessarily signify ANYTHING. For example, it could just be to protect the Bradford Bulls company name (although I suspect more than that).

3 - I cannot conceive that there is any intent by the new board to put the CLUB (note emphasis) into Administration AGAIN. Were they to do that, it would surely be goodnight Vienna for everyone - including themselves. After all that has gone on, I think anyone would hesitate to totally rule out the possibility, but it would surely have to be a desperate last resort tied up with the situation with OK rather than the club finances?

4 - OK Bulls Ltd has a big liability - secured by a charge on its assets - to OK. We were told c.£900k, IIRC?

5 - If I was the new Board, I would do my best to move the assets and all the non-OK liabilities into a new holding or subsidiary - or even just a connected company, if OK had not put anything in place to prevent it - to separate them from the liability to OK. That way, OK Bulls Ltd becomes a company with assets of loan to/shares in/whatever Newco, and a liability to OK. Everything else is in Newco. And OK's position is not compromised because the charge on the assets of OK Bulls ltd will include on the loan to/shares in Newco.

6 - Most definitely, if I was the new Board I would want to quarantine the club going forward from anything OK and the previous owners did or might have rendered the company liable for (known or unknown to them). For example, if it transpired that OK Bulls Ltd owed someone heaps (or someone had a big claim against it) that no-one knew about or some supposedly injured party came up with, a new liability that could bring down the club, you protect against that by shifting the club into Newco. Then, should OK Bulls Ltd go bust, that does not automatically bring down the CLUB. The administrator would presumably sell the interest in Newco for the most he could get, and the CLUB - being Newco - continues.

Ok, my take on what I have read. Given the ongoing tragic comedy that has been the Bulls for the last two years it would be foolish to rule anything in or out. But maybe the possible scenario I outlined might demonstrate that this could quite easily be a very positive development (unless maybe for OK) and not necessarily indcative of anything negative?

OK. I was a bit out on some of the points - like at the time I assumed that the new Debenture was in favour of OK, not the "security company". Had I paid my £1 and found that out beforehand, the scenario I outlined would have been much closer. But I think the bones of the situation - quarantining the club from the toxic debt - is there? "Frank Whitcombe" certainly saw it similar.

If the only creditor not paid proves to be OK, well that's tough on OK but fine by me. Had he put his money in in the form of shares (as most folk assumed he had, and he did nothing to disabuse anyone of that misconception) then he'd have been lucky to have received a cent back anyway. So its the same result - "owner writes investment off after huge losses shocker" - and no reason for anyone other than OK to get on their high horse about it.

If there are other toxic creditors - and we know of at least one, and I suspect there will be other strange ones that crawled out of the woodwork after Whitcu*t went - and THEY don;t get paid in full, well given the circumstances I kikewise can't see why there should be any complaints from anyone.

If the normal trade creditors, and of course HMRC, were not to be engaged with and settlement with them made by the new company, then I would (I hope it never becomes "Will") have a serious problem. As I think would many others and certainly the RFL. Points deduction would seem inevitable in such circumstances. It is sounding like maybe that issue is indeed being addressed, but we need to await updates I guess.

What seems a certainty is that many folk, who understandably do not have a knowledge of how these things work, will inevitably jump to the expected conclusions.

Adeybull, returning on 27/11/13 and commenting on the report of Bradford Bulls (2014) Ltd being incorporated wrote: