Top photoshopping!

No it wouldn't be an offence because there would be no false representation. Silence cant amount to a representation unless in response to a direct question. There would only be a problem if the council actively misled the Allams as to their intentions for the company after any transfer of the SMC.

I think this is just confusing the issue, there will be no transfer of the SMC, it is a private FM company owned by a third party and nothing what so ever to do with the council, It's the lease and the FM contract that falls within the remit of the council, so should a court find The SMC in breach and the lease and contract revert back to the council the company (SMC) would still exist and be registered at company's house albeit without the contract, where they went with any attached debt and as a trading entity is entirely their business, and what the council did with the contract is theirs.

I think we were talking about the scenario where the council accepted Allam's offer to take the SMC. As you rightly say the key to it all is whether the council could lawfully terminate the lease. If it can and if it chooses to do so (and I accept it may not want to) it could cost Allam a lot of money.

Representation can be expressed or implied (Section 2 (4)). If the Council bought the SMC the clear implication, unless stated otherwise, is that it would continue trading. Putting it into liquidation shortly afterwards would be false representation under the terms of the Act.

As phil webbo says it is irrelevant as the Council aren't going to buy the SMC.

What is more relevant though is will the freehold of the KC remain with the Council or be transferred to the new sports and leisure company? Will the council via its new company offer tenancies to Hull FC and Hull City AFC for continued use of the KC if it terminates the lease?

I'm sure they would. What would be interesting though, is whether this time they'd do it to be more attractive to the clubs or more attractive to potential operators. The indications seem to be that the council would again seek to protect themselves from losses, by finding somebody to manage it - perhaps after a transitional period under council control.

Difficult negotiation. The clubs could make a reasonable case that they should get existing terms. Though I think all sides could benefit from a simplified deal.
The stadium needs the clubs and the clubs need the stadium. The clubs might push for a better deal, but the council can't to run it a big loss, either politically or economically. And apparently doesn't want to be stuck holding the baby. The council might ideally want more from the clubs, but there's a limit to what Hull FC, in particular, can afford and City will see no reason why they should pay more.
Perhaps, the deal could or should be made directly between the clubs and the new operator. That'd be an intriguing game of chicken. But it'd probably pan out alright. Mutually assured destruction, innit?

Lets try again to put this right. again as I understand things from when it was set up

The user agreement for both City and FC is with the council, its signed up for twenty five years, with a further twenty five years on the table with safeguards on price built in. The SMC operates the stadium complex on behalf of the city council and has no input on what the clubs have to pay rent.

There's also European law and any ramifications from the investigation into Swansea City's deal over their ground. You'd hope that if the Council terminate the lease they have a vision for the development of the site to bring in additional income to ensure the rents for City and FC remain affordable. Otherwise the full costs of maintaining an aging stadium will fall on both clubs.

A third party would only be interested in running the complex if it was profitable and that means being able to increase the rents of both clubs if costs rise.

Its alright jumping up and down over the way Assem Allam runs the KC but you need to know what the alternative is. Bartlett took money out of the SMC in loans and salary. I see no sign of that under Assem Allam. If fact Hull City Tigers Limited appears to be funding its operating shortfall with loans.

The SMC runs the KC on its own behalf because it is the leaseholder. It isn't an agent for the Council. The terms of the lease set out what it can and can't do. I'd be surprised if the user rights are with the Council but I'm not sure. The Council briefing papers on the KC make no mention of an agreement between the clubs and it. It is more likely that they are with the SMC. Assem Allam mentioned honouring the contract between Hull FC and the SMC in one of his interviews.

On another point I'm sure if Assem Allam could blame the Council for the money the SMC allegedly loses from putting on FC matches he would have done so.

Surely it is in the councils best interests and indeed primarily that of the citizens of Hull to terminate the lease (legally of course). The damage that has being done by the SMC, not only financially with regard to the debts accrued (and would be further into the future) that has a hefty whiff of skullduggery about it but also to the users, Hull FC being one of the prime targets for fallout from the actions of the owners of the SMC.

With all the other aspects of the negativity and heavy handedness toward the community at large (threats to pull the soccer club out amongst many others) and would continue to be affected into the future by allowing the SMC to retain the lease it would seem prudent and the best all round for the city of Hull to have the contract terminated..or do the council think everything will be fine and dandy once they've helped the plunderer to get what he wants anyway??