dennyc

Thanks. That is what I thought. So funds depleted until such time as the WS cannot meet it's obligations. What then? What happens upon default? No need to answer as I know you are asking that same question.

I'm probably being a bit slow here but I would like to see the entire new proposal laid out in full so I can see exactly what is still included, and what is not. Detailing only the changes does not paint the full picture. Far from it. Let's see exactly what the Society is giving up and what they would be committing to. Without getting distracted or hung up on that 51% concession. And if that prolongs matters. tough! These are not changes that can be allowed to be blustered through to suit the Chairman or anyone else Off the top of my head. Does the Society still require to more or less match the Sheep input on an annual basis? Thus reducing Society Funds? At year 6, the conversion to Shares rather than the writing off 50% of the outstanding debt sounds better. At least it is not a complete write off of an asset. But do we still have to match others buy up of Shares through earlier years. Thus depleting Society Funds. "The increase in the Well Society shareholding would not require the Well Society to invest any additional sums to the original proposal". That suggests to me that the original payments are still included. Might just be my reading of it of course. What exact Exec Boardroom powers will the Society hold? Looks like very little because despite being majority Shareholder, Boardroom decisions are not to be made on a shareholding basis, but rather by a show of hands. And if that show of hands is 50/50 then MB as Chairman has the casting vote. A bit arse for elbow for me. The majority shareholder should have the casting vote. Looking forward, is it still the intention that any monies provided to the Club will be on a loan basis? Essential to preserve Society assets just in case they are needed for a rebuild.. Exactly how is Fir Park to be protected moving forward? At present MFC own Fir Park, but the WS hold a registered first charge over it in view of the loan funding provided to the Club (The outstanding Loan). In effect that means the ground cannot be used to secure outside finance without the approval of the Society as first charge holder. Anybody can check Companies House and they will see that the Charge was signed off by A Burrows in 2016 to cover monies borrowed by the Club. If that Loan debt is extinguished in full (and the Exec Board could elect to do that on a show of hands when in funds), does that mean the WS could then not block any attempt to use FP as Security for external finance. Thus putting it at risk should disaster happen? I'm no property lawyer but why not include a condition that, Club debt or no Club to the WS, Fir Park cannot be remortgaged without the agreement of the Society, notwithstanding any Exec Board vote. I accept I may be being overly cautious and apologies if any of my concerns have already been addressed ( even as I was typing)and resolved. But I am still dubious despite these apparent concessions.

Dickie and Feely agreed to it, so McMahon will say the Society were consulted. And I'm not saying that is a valid argument, but he will dress it up that way. Barmack might even have genuinely understood that to be the case given their position within the Society and that they were introduced to him as Society Board Members. The fact it appears they did their own thing without reference to their WS Board colleagues will be conveniently ignored. I also think the outstanding Loan is an issue and the Exec Board want it gone asap. That would further weaken the Society's position. Ironic if they use the Society share purchase money to repay the balance. All set up for a majority shareholding and Fir Park to fall into Barmack's hands.

Spot on David. All to the point and exactly how every fan I have spoken to sees things. I've picked out one paragraph just to add that I think it is not only the Club's assets that need protecting. This proposal would vastly reduce/eliminate funds held by the Society as monies would be committed to match EBs input and to purchase any new shares not taken up by existing Shareholders....... should any funds be available. And there is a strong possibility that Members' contributions well drop off considerably. The sop that monies from transfer income might be set aside for the Society clearly recognises that possibility. Kind of ironic as well, the Club hands cash to the Society so we can hand it straight back to them. And that's not even looking at the ludicrous condition that the Society write off a huge chunk of money owed to it by MFC.

What is to stop McMahon, Dickie, and others from taking up the new shares, as will be their right. And then selling them to Barmack? Is there anything to stop Barmack hoovering up shares increasing his holding to a majority. Maybe I'm missing something here.

The Club Board are taking it for granted that existing Ordinary Shareholders can afford to purchase new Shares or actually want to. To match Barmack and preserve a majority. The Well Society do have funds available to purchase new shares, but in time those funds will dry up. Especially if subscriptions drop off as a result of this investment offer. And they will. Unlike the other 29%, the WS are being forced to buy the shares to retain a majority. Using up funds. What choice will they have? End result, empty coffers for the Society. And what about the other 29% of Shareholders? Who knows for sure that they will take up their new shares. So the Society can buy them as well. More funds gone forever, if there are actually any available I see this whole thing as a not so subtle way for the Club Board to access whatever funds the Society has left, having previously been allowed to help themselves to a substantial sum outwith terms that were originally agreed. Monies gone forever as 'donated' rather than 'loaned'. Recent changes to the WS Board have attempted to address that practice and so protect fans' donations. That has not gone down well. Not for me, and in my opinion anyone who signs up to this can forget all about fan ownership. Eventually that status will just become part of our history.

Apologies. My error

If you sell a player or get sponsorship, do you eventually have to return the money? Yes the Loan was income and has to be shown in year end figures. Is it truly a profit though? If you get a Bank Loan, is that part of your earned wages? it is income. The Club could have pointed out to fans that the £3.5m profit included Loan funds received and was not all profit generated from general business. They did reveal that fact in the Account notes, but not in the headline press release. " We made £3,5m Profit". So fans thought we earned £3.5m that year. From normal footballing activities. I certainly did until I looked at the Accounts today. Folk cannot have it both ways. If you build in the loan as income resulting in raised profit figure then fair enough. But you cannot just say ignore improvement costs funded by that loan when you incur a loss in future years. As a few on here are saying. " We did not really make a loss because we spent money on the pitch". Anyway, we are allowed to see it differently. No harm in that.

Not dressing it up. Actually confirming what you suggested. Was only shown as just under £2m though so would not have been a loss had it not been included as income. Still is misleading whatever the figure used though.

I think as the Loan was treated as income, then the improvements must be treated as expenditure. That will feed through future annual results thus affecting profit (or loss) outcomes. It must be accepted practice and was explained in the notes to the Accounts. But is was not specifically pointed out to the fan base when the results were declared. So I agree the headline profit quoted in press releases was misleading, whether that was intentional or not is up to individuals to decide.

Have a look at Accounts to 31 May 2021. Note 3 as an explanation. Confirms your thoughts I believe. £4m was included as Other Operating Income which contributed to a profit of £3.5M. A profit seen as outstanding. That £4m included a Grant (later explained as the Govt Loan) adjusted to £1.8m for accounting purposes. The balance of £2.2m was a Covid Insurance payout. Had the Govt Loan not been recorded as income, the annual profit would have been £1.7m, which more accurately reflects Trading Income, including insurance pay out. Signed off by Auditors so must be accepted practice. But how exactly you can treat a repayable loan in the same way as a non repayable Insurance pay out beats me. The insurance pay out being fair enough as it replaced potential income lost due to Covid. Bottom line, the profit quoted was artificially but legally inflated. In my opinion of course. My take on it anyway.

Entirely as I see it. We agree. The only thing I would add is that since last year's changes to the WS Board, the new regime has been trying to effect change whilst battling internal barriers (Hopefully those barriers will soon be history). Seeking a return to original operating principles and testing more closely any request from MFC or other bodies for the release of those monies. So that is to their credit. It does strike me that it is no coincidence this attempt to diminish the Society further comes at a time when uncomfortable questions were being posed and the Club Board's influence within the Society was under threat. Suddenly the Society is not as compliant and so McMahon etc are under pressure.

Oh I know the PSC thing is not the important thing right now. But it does support our view that the WS is being marginalised by the Exec Board and has been for a wee while. I think it highlights a disrespect of the fan Membership and weakens their position in the eyes of outsiders.

Not able to check your calculations but this could be very significant. We discussed earlier the WS being recently removed as a Person of Significant Control (PSC) and the confusion that exists about that non status. Seemed illogical to us. Company House guidelines state a 25% Shareholding is necessary to be recorded as a PSC. So falling to 22% would automatically rule the Society out. Might not be to the forefront given everything that is going on but it does add to the concerns. And does tie in with the Society being sidelined. Struck me that the WS hold substantial funds at present. So I wonder if the Board have sought proper independent (emphasis on independent) legal advice regarding the proposal and it's implications. They can easily afford it and would seem like a logical step. Apologies if that has already been covered.

Cheers David. I did the same search and like you could find nothing to confirm payments directly to Clubs. Unlike the FIFA and UEFA sites which specifically confirm such payments. It is a FIFA recommendation to all regional authorities so hopefully that carries some weight. A few years ago CONMEBOL was under severe financial pressure and had difficulties paying out for a number of their tournaments. Since then however the have secured substantial television deals/sponsorships which were believed to have put them in a good place. Fingers crossed.

No offence meant to anyone, and i know this won't be well received, but do we actually know what powers the Society has with regard to the football Club? We are all hung up on majority shareholding and seem to be assuming that what we say is what happens. 100%. On every matter. That as majority owners we dictate. For instance, what % of Shareholders is required to bin an Exec Board Member? Not saying it is, but it could be 80%. Built into the constitution. If you think about it, when the WS was created and moving towards 50% plus, the Exec Board would have been crazy to give that 50% plus the right to sack any one of them at the slightest excuse. That's like turkeys voting for Christmas. It's fairly common for different actions to require different %s to vote in support. Just saying we need to be cautious in what powers we assume the Society has. I do agree it is about time they started using those powers though. I'm certainly not defending the Exec Board, far from it, but I do think we need to know our facts before laying into the WS Board/

If The WS Board have pointed out the undervaluation as they see it, does that not give them and their Members a valid reason to reject the offer? So putting it to a vote with that undervaluation on show might actually help to achieve the outcome you want by swaying some folk that are undecided. Of real interest to all, should be the hinted at financial situation the Board Finance person referred to as being a major factor leading to that low valuation. I think in his response to Vietnam91? On P&B maybe.

To confirm this. I was a bit concerned to hear they had been unlisted so contacted Society. Tom Feely told me the Society had been on and off as Persons with Significant Control (PSC) over the years as there was a view within the WS that they should be listed. Companies House records confirm that on/off situation over the years. So there is confusion. I was also told by Tom that In their last correspondence with Companies House the Club had been advised that if they continued to list the Society as a PSC, then they could be penalised. I pointed out the St Mirren situation and did not really get an answer other than "We are only doing what we are told". I was never told why in fact the WS did not qualify. Investigation via Companies House site. I confirmed there are several factors taken into account as to when a PSC situation would apply. One is indeed share holding % but 25% and NOT 75% is the cut off. Please note though that % share is not always the deciding factor or the only qualification required. The entitlement to vote at Board Meetings and also the power to add and remove Board Members come into play. In short, someone might have 50% Shareholding and not qualify. Someone with 25% but who can vote and/or dismiss and appoint Board Members would qualify. I do not know the full list of powers which the Society hold. I do know the Shareholding % more or less. But does anyone know for a fact that they are entitled to appoint or dismiss Exec Board Members or even that they do carry a vote as Society Reps? Either might be the deciding factor. No doubt someone will be able to unearth exactly what powers the Society hold. One thing for sure, it is not as simple as shareholding %. Oh, and the PSC criteria applies to Groups as well as individuals. I did wonder about that but the WS is a Body that would qualify. I have never gotten to the bottom as to why the Society is not listed as a PSC. I did wonder if the terms which were agreed when the WS was founded were such as to ensure it did not qualify. Perhaps by withholding certain Powers? Most likely the power to remove a Board member? One for the new Society Board to investigate via their legal support. All very complicated and clear as mud I'm afraid.

Thanks for that. Makes their vote even more unacceptable to my mind.

Cheers. I was thinking that loyalties might lie with whichever Board they were appointed to in the first instance. Trying to find a reason for them going against the majority view of the Society Board when voting on the Exec Board. Also trying to convince myself they might not just do what the Club Chairman dictates. Alternatively they might be privy to information that has not been made public. Hopefully all becomes clear soon. The Club update perhaps.

I'm not convinced they even voted in accordance with their own personal viewpoints. Were either on the MFC Board prior to being placed on the Society Board? In which case one or both might just have elected to vote with their original buddies to whom loyalties still lay. Might explain why neither has outlined their reasons for ignoring the views of the Society when it came to that vote. Just a gut feeling on my part though. But I was not surprised at how Dickie in particular voted. In hindsight two existing Society Board members should have joined the Exec Board with two of their existing Members joining the Society Board. Two voices on each Board providing the thoughts of the other Board. Might still have been a 5-2 Exec Board in favour but at least the Society stance would have been recorded for all to see. Similarly I would have understood the 2 Exec Reps voting 'No' in a Society Board vote. Apologies if that does not make too much sense. I know what I mean, but explaining it is a challenge. Somebody else will likely put it more simply.

I hope this update will include the up to date financial position which I believe was used as one of the main reasons for the low value placed on the Club. If it does not, then it should do as the Financial Secretary openly introduced that factor without actually quoting figures. So, on the grounds of being open and above board the current situation should be no secret. I'm pretty sure the potential investor will have seen those figures. If not, he is not as astute as made out. It is all covered on previous chat either on here or on P&B if anybody wants to check. I'm far from convinced that the Society will have had much input to the update. Hopefully I'm wrong in that though.

So essentially some sort of debt needs to remain to secure that safeguarding Charge over Fir Park. Which was the reason we asked for it all those years ago. With no debt, how can we guarantee any new Board (as majority shareholders?) would not simply apply to have it removed? Thus exposing Fir Park to all sorts. Currently, if the Exec Board wanted to Mortgage FP to secure finance I understand the WS as 1st Charge holders would have to agree? But I'm no property lawyer. That Charge together with the debt also ensures that the WS would be more than just ordinary creditors were the Club to fail. Otherwise it would be so much in the £ rather than full repayment. Essential to assist with any 'new' Club arising from the ashes. Worst case scenario of course but it was a consideration and a sensible move. I was actually relieved when it was confirmed the Club owed a sizeable amount to the Society, for the very reasons above. I did wonder if the reason Les H and Jim McM moved the Society away from the original loaning agreement was a long term game looking at freeing the Charge. Credit to the new Society Board for driving a move back to the original set up. And no, I don't believe you are being cynical at all. Either that or we both are.

Don't worry. You can fill your boots if we sign a Salmon, Trout or Pike.

The part about the Society charge over the Stadium raised alarm bells with me. By whatever means, if the outstanding Loan disappears does that mean the Charge falls automatically? Perhaps like someone repaying a Mortgage. The point being that the Society do not own FP, they hold a charge over it in view of the outstanding debt. That situation needs looked at by someone far more legally aware than most of us. Getting that Charge agreed several years ago was driven by Society members and was not intended from day one. I know that for sure because I (and others) raised that point directly with Tom Feeley. In fairness, several months later it was in place as a much needed safeguard.