Quote: bellycouldtackle "The reality is that the bank and other creditors with pgs covering their loans / debts will not cause a fuss because thet have been paid, the reamaining creditors will be made up of small companies and maybe larger companies who are owed ` small ` ammounts. Added together I would guess at say 1 million pounds in total for a business the size of the Bulls. If administration is entered then as is 99.9% always the case these small creditors lick their wounds and move on because if they want to call a creditors meeting and pursue the directors then guess what the costs of doing this are down to them. Whilst on the subject can you see a new investor coming in and picking up the liability for the debts, they would surely want a clean slate.'"
HMRC. And, just possibly, the Council.
The rest of the creditors...I tend to agree.
HMRC would likely be owed enough to very much NOT take it lying down. And their current policy is to be far more active and challenging than in the past, since Crown Preference was abolished and the taxpayer has been taken for a ride too many times by failing businesses, especially in the leisure industry.
I suspect any challenge would only come from HMRC, and would very much depend on how much of the total creditors they represented, how much they were owed and whether any of the monies were overdue. I suspect the latter will approximate to nil.
There are precedents for new investors picking up the debts - certainly other than any debt to HMRC - voluntarily. Usually where they perceive the need to retain the goodwill of and services of suppliers outweighs the financial benefit. Brintons Carpets was a good example of this, last year. My guess is that such debts in total are quite modest, since who in their right mind would advance significant credit to the Bulls right now? The costs of settling these trade creditors, especially local ones, could easily be less than the consequential effects on PR and goodwill if they were not settled, IMO.
And the new owners could (and surely would) agree to honour existing season tickets and prepaid sponsorships, which otherwise would of course represent significant creditors.
And would the incoming owner/s leave players and other employees unpaid? They would be creditors too in the event of insolvency.
In any case, any employees kept on would presumably be TUPEd across anyway, so that is automatic assumption of (actual and contingent) liabilities.
So yes, I certainly COULD see an incoming investor, at least one who wanted to maintain the goodwill of the fans, sponsors, players, staff, local suppliers and the wider community, deciding it was in his/her/its interest to settle various existing debts voluntarily. That is what the vehicle formed to buy the Brintons business did. Whether one WOULD is something I hope we never have to find out.
The bigger issue could be with all the other contingent creditors - such as the council under the Odsal settlement. Liabilities that would crystalise only on insolvency (same as the employee claims) Any settlement with these would I suspect consist of assuming the contract and therefore the contingent liability if the other party demanded it.
That said, the council took out a charge on the club's assets concurrent with the lease sale, so they would get first dibs after the prefs anyway.
And of course there is the matter of what the RFL would insist upon, both on its own account as a probable creditor and to protect the interest of the players and the wider game. Although the precedents there seem far less clear-cut!
