C.V.A

[Cookie]

Rumour has it that we are looking to "buy" a player. Is that possible under a CVA? Would the creditors not want to know about this and if true would they not want that "cash" to go to paying off debts rather than have it splashed out on players whilst under a CVA.

If we cannot buy a player until the CVA arrangements have been adhered to in its entirety does that therefore restrict us from actually buying a player at ANY time whilst this CVA is active?

Just wondered thats all.Is there anyone out there with deeper understanding & knowledge of this?

[BlueGate Alan]

James?????

[Cookie]

Where is James lately? Surely he's finished his paper round by now! l.o.l.

[BlueGate Alan]

Wondered that myself Tony? Made me smile when I read yr comment

[jkmaskell]

Ill look into it. I thought we were out of administration so it wasnt a problem. The CVA is just a way of paying back outstanding monies, and I thought we had paid all the money back so there would have been no problem with it. Ill get back to you on it.

[BlueGate Alan]

Welcome back James, knew you wouldnt let us down

[Cookie]

Isnt a CVA an arrangement to repay over a period of time and therefore would be similar to being bankrupt in which case the creditors would want to know why any fee wasnt offered to them in the first place.As I said again I am just curious. If we HAD paid all monies back then would that not take us out of the CVA altogether James? Welcome back! I look forward to hearing your replies on this one.

[jkmaskell]

The club isnt bankrupt, by the way. Its still solvent. There hasnt been any confirmation of the CVA being completed. Margate isnt in administration though. So financially speaking its much safer than it was.

 

The problem with all this is that Google doesnt exactly explain very well other clubs CVAs and the progress that went through.

[I am Spartacus]

A COMPANY VOLUNTARY ARRANGEMENT is by vertue of it's name a voluntary arangement between A company and it's crediotors on a specific date to freeze the debts and repay voluntary over a pecific period of time. Therefore so long as the company meets its repayment schedule any surplus of monies can be spent as liked. Therefore transfer fees would be permitted.

 

I did hear that the debt was 174k and they had every intention to repay it in full.

[Ian D]

A Company Voluntary Arrangement CVA is a procedure which enables a company to reach an agreement with its creditors about how debt is to be repaid. The CVA may provide for partial or full repayment depending on what the company can reasonably afford to pay.

 

Creditors do support CVAs if the alternative is liquidation with little or no return to creditors. The Proposal must, however, be reasonable and achievable.

 

A CVA can only be proposed by a company if it is insolvent or contingently insolvent. The CVA requires the approval of 75% of the voting creditors. If approved, the CVA binds all creditors irrespective of how they voted and allows the directors to retain control of their company.

 

A CVA aims to serve the best interests of the creditors while allowing the company to continue trading and to keep the work force in employment.

 

There are several components that are vital to a successful CVA proposal. There must be a business plan to return the company to profitability, in other words directors must accept there is a need for change. The proposal must be viable and be likely to be considered favourably by the creditors. Working capital in addition to a review of credit repayments need to be arranged.

 

So there would have been a lot of negotiations and even the possibility that the debt may have been reduced,unless of course the Tax man is involved and then this would be unlikely.

 

Also the company must be contingently insolvent to be able to get this far. That basically adds up to, if everyone asked for their money, the club would go belly up.

 

Mind you what really matters is three points on the board tonight!!

[jkmaskell]

I thought we were told that all the remaining debt would have been paid off by September...

[Cookie]

I read that too Ian but what is your answer to my original quesrtion. Can we, are we, allowed to fork out money on a new player in this situation. I see it says that we can continue to trade and keep the workforce in employment but does that include bringing on board NEW employeees with an added expense attached to it.

[Chris1]

Who was the last player we actually paid for? Was it Siggy? He was rumoured to have cost about £7500.

 

How much does that work out per goal anybody, and was he worth it? (In case you are wondering, in my opinion NO!).

[Chris1]

Ok, before you all tell me off, I have now checked Jeff's site. He scored 12 at a rate of 1 every 5½ matches, costing £625 each (excluding his wages of course). Not good value.

[Cookie]

Hes done better since he left us but then I suppose being fed the ball more than when with us thats only to be expected.

Now lets get back to CVA can we. Am still waiting for an answer to my original question and no-where above have I seen the answer.

[knighty101]

cookie i suppose as long as we meet our agreed payments we can trade as normal hireing and fireing as long as its withen our means (this is an assumption)

[Cookie]

Thank you Legend. At least thats the nearest I have got to an answer of some sort anyway.

[Chris1]

A good explanation of CVAs can be found here.

 

The key is 'The club should then be left as a solvent entity, in charge of its own finances and able to trade on'. Thus a CVA does not prevent the buying or selling of players.

[Cookie]

It is a legal procedure that allows a business in financial trouble to keep operating without being forced to sell off assets to pay debts.

 

The aim is to give a company a breathing space in which it can restructure its finances and put its business on a sounder footing.

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Thank you Chris for pointing that out but it still does not answer my question. It does say that they can keep operating without being forced to sell of assets to pay debts and it goes on to say that it gives the club a chance to put its finances onto a sounder footing. That all may be well & good but actually PAYING for a player isnt covered by the above comments.Going out and BUYING a player when monies are owed is not the same as continuing to operate and keeping finances on a sounder footing.Surely that means to cut back and NOT spend additonally to what is nessasary.I can understand payng a players wages but to give a fee up front is the worrying thing to me.Maybe there is a way round that I dont know. To those at the CVA board it might sound a bit cheeky or reckless to do this at a time when money is supposed to be at a level that allows us to pay back to the creditors at a certain rate over a certain timescale.

So though your link was helpful I still cant see where it says that actually going out and using cash to buy a player ia acceptable. Maybe I am being a little finnecky with this but I would like to know for sure.Maybe KP or the club could tell me once and for all what is acceptable and what isnt.

[Chris1]

Cookie with respect I think you are looking at the section about administration. The CVA bit is further down.

 

If I understand it correctly it is an agreement whereby the creditors hold off from making a bankruptcy petition (and so getting very little), in exchange for the club agreeing to pay its debts at a set rate. Because it is voluntary there is nothing to prevent the club trading as normal and making transfers.

 

The same can be done for individuals, in which case it is called an IVA.

 

There is still the FA transfer window to consider though.