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BREAKING NEWS!! EFL -12 Points - Full Written Explanation Thread


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Surely if you’re going to be punished for PnS (when you’ve spent more money than you should on expensive players) then you should be punished whilst you’re still playing those expensive players - seems only fair (ie the season after 2017/18) not 3 years later. 
 

That should be the basis of our appeal 🤗

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6 minutes ago, mkowl said:

 

I will re-read again but it says that a property lawyer was not consulted in the drafting of the Heads of Term. The lawyer we used was not from that specialism. KM drafted it but she is qualified in Belgium.

 

To give context a client of mine bought a field for 1m for housing and the heads of term were about 3 pages long. The actual contract about 150 pages in the end.

 

 

 

 

 

 

 

 

 

 

Forgive me, but what criteria does a HoT have to meet to be considered acceptable, legally speaking? I may be looking at it simplistically, but the HoT that is quoted in the report, while brief, is surely still binding as it says the sale is unconditional (or words to that affect - I am at work so I am quoting from memory here), thus is enough? Or are there stipulations that the HoT must meet to be considered legally valid, binding, etc?

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3 minutes ago, Jimbob1867 said:

I posted this on the appeal thread but should probably have posted here:

 

My two penneth.  I am a lawyer for what it's worth.  

 

Some good points made on this thread about the EFL eg failing to investigate Charge 2 properly, accusing Chansiri of faking how bad his English is, trying to pick when to deduct points so as to relegate us etc.  I won't comment on these further.  

 

HOWEVER - what seems clear to me is what an utter poo show things are in terms of how the club is run.  I also don't think they have a leg to stand on with respect to an appeal.  We brought this on ourselves and it seems to have been totally avoidable if we'd had competent people dealing with this.

 

The club keeps saying they proceeded because they had EFL and auditor sign off.  However: (i) the EFL basically said they would sign off if there was a binding contract before 31 July with sufficiently certain terms (particularly as to price) - and it turns out there wasn't; and (ii) the auditors included an Instructed Assumption that the heads of terms was a binding contract dated 15 July - which, it turns out it wasn't.  In fact it seems the heads of terms, while binding, had insufficient certainty as to price, and was not entered into before 31 July, but was entered into on 15 August and backdated to 15 July.  On that basis I don't think the EFL has done an about turn in relation to what they initially said would be acceptable, which seems to be the crux of our defence (although you can certainly question their motivation for only looking at this months and months later).

 

It's beyond all comprehension why the club thought a backdated contract would be acceptable from a legal point of view.  Apparently the club didn't take any decent legal advice on how to deal with this.  

 

We should have been on top of this well before the deadline and not be relying in August on an email exchange with the EFL to say this was all ok.  We seem to have got away with charge 2 partly because the EFL didn't investigate properly at the time and partly because of our own incompetence ie it seems the heads of terms was backdated but because in emails and meetings after 15 July we made clear there wasn't a binding agreement (why would you do that if you were trying to demonstrate everything had been signed off before 31 July?!) then we can't be guilty of having deliberately misled the EFL.  If we'd just backdated the heads of terms and stuck to the script throughout that it had been signed on 15 July, and not on 15 August as seems to be the case, I think we might have fallen foul of charge 2 as well.

 

There don't appear to be any realistic grounds for a reduction in the points deducted, only that we be found not guilty, which doesn't seem at all likely.  

 

We should just accept this and move on and PLEASE, DC, appoint some competent people to run the club.

 

The incompetence shown by our club is almost beyond words. You don't buy a house without getting the correct legal advice and guidance, never mind a business asset worth millions. Then to simply not understand the implications of delaying the completion is naive.

 

Unless their is something not included in that report, or some legal aspect I wouldn't know about (I'm not a Lawyer), then if I was DC, I would keep my counsel and accept the decision. 

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So the day before Jos had the team running out at Wigan in August 2018, DC was meeting the EFL in Preston, chatting about player sales and 'options' to avoid FFP breaches.

 

The club then bobs over some half-baked HoTs to the EFL for a ground sale, six days after the deadline for the accounts' submission, with a date of 15 July. You have to wonder what on earth was DC and his advisors were thinking. Surely we could have sorted this out in May/June to meet the criteria?

 

In his defence, you can only assume that the club thought the EFL had accepted the HoTs, as nothing more was said from either party until he club announce the ground sale in May 2019.

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7 minutes ago, axolotl said:

 

 

Forgive me, but what criteria does a HoT have to meet to be considered acceptable, legally speaking? I may be looking at it simplistically, but the HoT that is quoted in the report, while brief, is surely still binding as it says the sale is unconditional (or words to that affect - I am at work so I am quoting from memory here), thus is enough? Or are there stipulations that the HoT must meet to be considered legally valid, binding, etc?

 

My understanding is not much at all.

 

HoTs just caature the key details which the lawyers can turn into a draft contract. My understanding is it's only binding until contracts are exchanged.

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29 minutes ago, cowl said:

 

The adjectives I'd use are pragmatic (under Harvey) and principled (under Parry) - and that's also if I'm feeling kind.

 

I don't actually think they're vindictive now - at least that's not their main drive, even if in effect their resulting behaviour has had the appearance of being vindictive. I just think that in the zeal to stand for some principles (and, more to the point, to be seen to stand for them) they've partially lost sight of what their responsibility as an institution is.

 

If Parry wants to come in and tighten up the ship, then that's fine, but he has to acknowledge that the breaches that took place under the previous management of the EFL are from the past and he has to live by them. The EFL is the EFL. The EFL isn't Rick Parry, and he can't be making this a personal war against right and wrong or however else it is that he perceives his role here.

That's a very balanced and fair minded point of view. Rare today.

The problem I have with the way this has been prosecuted, is that Parry is clear that the problem is parachute payments. Previous massive FFP cheats (£7m fine) Bournemouth are coming down with £45m in their back pocket and an ability to lose another £40m plus next year alone. The P&S EFL £39m cap is driving the ground sales. Making an example of SWFC and Derby - as seems to be clearly the intention - will not make any difference at all. Except to certain interested and over-influential EFL parties. 

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Guest Grandad
1 minute ago, Animis said:

 

My understanding is not much at all.

 

HoTs just caature the key details which the lawyers can turn into a draft contract. My understanding is it's only binding until contracts are exchanged.

 

Its a legal document required by the auditors to include the sale in the accounts for the year.

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15 minutes ago, axolotl said:

 

 

Forgive me, but what criteria does a HoT have to meet to be considered acceptable, legally speaking? I may be looking at it simplistically, but the HoT that is quoted in the report, while brief, is surely still binding as it says the sale is unconditional (or words to that affect - I am at work so I am quoting from memory here), thus is enough? Or are there stipulations that the HoT must meet to be considered legally valid, binding, etc?

There are legal requirements for something to constitute a contract eg offer, acceptance, consideration (ie the agreement to pay a price for the stadium) but the issue here is it seems to fail for legal certainty because it says the price shall be no less than £40m.  It doesn't say how it is determined if the price is more than that, based on what criteria etc.  It's like me agreeing to buy apples from you and saying nothing more.  What apples?  When? How many? etc etc. No lawyer (assuming they don't want to be sued) would have said that HoT was acceptable in the circumstances.  It shouldn't have been too difficult for the HoT to include a mechanism to determine the eventual price eg say it will be the higher of £40m or valuation amount determined by xyz valuer to be provided no later than X date.  That would have just left the minor detail of the HoT being signed at least 15 days too late 

:duntmatter:

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9 minutes ago, Nero said:

That's a very balanced and fair minded point of view. Rare today.

The problem I have with the way this has been prosecuted, is that Parry is clear that the problem is parachute payments. Previous massive FFP cheats (£7m fine) Bournemouth are coming down with £45m in their back pocket and an ability to lose another £40m plus next year alone. The P&S EFL £39m cap is driving the ground sales. Making an example of SWFC and Derby - as seems to be clearly the intention - will not make any difference at all. Except to certain interested and over-influential EFL parties. 

 

Oh, I agree about the bigger picture, certainly with regards to the parachute payments - I have no doubt they're the source of much of the financial instability for the clubs in the EFL.

 

Many are saying we've broken the rules (so therefore...), but for me, the rules themselves are highly questionable. Well meaning, perhaps, but in practice they've caused a lot of problems as clubs chase promotion to the Prem.

 

And indeed, given that Parry does acknowledge parachute payments as being a problem, he should be looking to do far more to address it.

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4 minutes ago, Grandad said:

 

Its a legal document required by the auditors to include the sale in the accounts for the year.

 

yes, providing they turn into a contract, which I assume in our case, is the case - we await the 2018/19 to clarify the full deal.

 

So, the HoTs 'reserved' a position with the EFL, but obviously now in the wrong year for our FFP position.

 

My general pointis they don't hold any legal authority in a property transaction basis.

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Item 19 indicates the panel were asked to reach a decision quickly...

 

By whom and is there a risk this gave rise to the consideration and ultimately a decision being ‘rushed’?

 

Some ‘finer details’ etc. Not being included..

Where ’Finer’ details are often crucial.

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5 hours ago, A12owl said:

Can you summarise the 41 pages in just a few sentences MP? 

Yep. EFL spent so much time chasing individuals over misleading them/obstructing them (charges later dropped  EFL), that they lost sight of the P & S   charge until it was too late to bring proceedings in a timely manner to dock points from us in 2018/2019, which would not have relegated us in that year.

There is also a further 10 page document beyond the 41 pager.

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Reading this it seems like it was made clear to us what conditions we had to fulfill to get the sale in the P and S for the right year, but we didn't do it in the time frame stipulated. Hence we cant include it in that year and were over in that period. Take the punishment and move on FFS. 

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As bad as the EFL have performed in all this, the overriding concern for me is that why we were in the dock in the 1st place will get forgotten. The ‘scandel’ will be tomorrow’s chip paper. The way the club is run needs to be addressed ASAP. We can’t carry on like this and expect things to change. 

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1 minute ago, vulva said:

As bad as the EFL have performed in all this, the overriding concern for me is that why we were in the dock in the 1st place will get forgotten. The ‘scandel’ will be tomorrow’s chip paper. The way the club is run needs to be addressed ASAP. We can’t carry on like this and expect things to change. 

 

Agreed, been panning the EFL personally for the past 24 hours, but we also have to get our own house in order going forward. 

 

Getting the right people in the right structure should help sort it, and it's not rocket science to achieve. 

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Well I've read it in full, as interesting as it is, I again would be worried about Wednesday's next move.

 

Firstly, the sale and lease includes Wednesday paying £3m a year to Sheffield 3 Ltd(Para 105), with Wednesday paying for maintenance too (Para 122).  That was based on a £40m valuation, not the £60m that it became.    Whether these numbers are followed through to reality now, I don't know, but that's what Wednesday said to the EFL would be.  

 

Secondly, the valuation of £60m is plucked out of the air it seems.  £37m-£42m seems to be the vague figure mentioned throughout, but £60m was the final price.   No valuation of Hillsborough was carried out that I can see, or if it was carried out, Wednesday didn't show it to the EFL.  There doesn't seem to have been any attempt to apply a true valuation and see the numbers for what they are, more a see a problem number and see the valuation for what it needs to be.

 

Thirdly, para 2 it states that he EFL were out to help Wednesday in Autumn 2018.  From that point on, the club dithered and delayed and tried to get a solution/valuation sorted as it was looking at how others (Villa) had managed to get away with it, and follow their example. 

 

Fourthly, we were creating documents and backdating them (Para 102, Para 54, 55) to the previous accounting year.  The Heads of Terms, was not done that is legally satisfactory until after the relevant accounting period (Para 101) and that no legally binding document existed for the right accounts.  Annex 2 shows Wednesday had two Head of Terms documents dated 15th July 2018, but one sent to the EFL on the 15th August 2018 (£37.5m+) and the other higher figure (£42m+) sent on the 17th of August 2018.   

 

Fifthly, the auditors were happy, as long as there was a valid valuation of Hillsborough and a legally binding agreement was in place in the correct period.  There wasn't ever such a valuation.  But, even if the auditors were happy as Larry and the EFL accepted it without looking further, the EFL would be wrong (Para 76).

 

Finally, Wednesday relied on unqualified and inexperienced solicitors to carry this transaction out, and it shows.    Staggeringly incompetence.

 

I can't be arsed to spell out the rest as it's less important, but simply put, if the Heads of Terms can be proven to have been valid on 31 July 2018, then Wednesday have a chance with an appeal.  But with numerous Heads of Terms documents changing, but the date remaining as 15 July 2018 (Annex 2), it's highly suspicious.   If both had been created on the 15th of July 2018 as they claim, then why on the 15th of August would Wednesday send to the EFL the lower one that had already been superseded by the higher figure one?

 

From start to finish, we've acknowledged that we are going to or are falling foul of the P&S rules.  We know it, it shows throughout the document.  Yet all we could do is try and game the figures to meet the rules.  We just did it badly, and at the wrong time.

 

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1 minute ago, Manwë said:

Well I've read it in full, as interesting as it is, I again would be worried about Wednesday's next move.

 

Firstly, the sale and lease includes Wednesday paying £3m a year to Sheffield 3 Ltd(Para 105), with Wednesday paying for maintenance too (Para 122).  That was based on a £40m valuation, not the £60m that it became.    Whether these numbers are followed through to reality now, I don't know, but that's what Wednesday said to the EFL would be.  

 

Secondly, the valuation of £60m is plucked out of the air it seems.  £37m-£42m seems to be the vague figure mentioned throughout, but £60m was the final price.   No valuation of Hillsborough was carried out that I can see, or if it was carried out, Wednesday didn't show it to the EFL.  There doesn't seem to have been any attempt to apply a true valuation and see the numbers for what they are, more a see a problem number and see the valuation for what it needs to be.

 

Thirdly, para 2 it states that he EFL were out to help Wednesday in Autumn 2018.  From that point on, the club dithered and delayed and tried to get a solution/valuation sorted as it was looking at how others (Villa) had managed to get away with it, and follow their example. 

 

Fourthly, we were creating documents and backdating them (Para 102, Para 54, 55) to the previous accounting year.  The Heads of Terms, was not done that is legally satisfactory until after the relevant accounting period (Para 101) and that no legally binding document existed for the right accounts.  Annex 2 shows Wednesday had two Head of Terms documents dated 15th July 2018, but one sent to the EFL on the 15th August 2018 (£37.5m+) and the other higher figure (£42m+) sent on the 17th of August 2018.   

 

Fifthly, the auditors were happy, as long as there was a valid valuation of Hillsborough and a legally binding agreement was in place in the correct period.  There wasn't ever such a valuation.  But, even if the auditors were happy as Larry and the EFL accepted it without looking further, the EFL would be wrong (Para 76).

 

Finally, Wednesday relied on unqualified and inexperienced solicitors to carry this transaction out, and it shows.    Staggeringly incompetence.

 

I can't be arsed to spell out the rest as it's less important, but simply put, if the Heads of Terms can be proven to have been valid on 31 July 2018, then Wednesday have a chance with an appeal.  But with numerous Heads of Terms documents changing, but the date remaining as 15 July 2018 (Annex 2), it's highly suspicious.   If both had been created on the 15th of July 2018 as they claim, then why on the 15th of August would Wednesday send to the EFL the lower one that had already been superseded by the higher figure one?

 

From start to finish, we've acknowledged that we are going to or are falling foul of the P&S rules.  We know it, it shows throughout the document.  Yet all we could do is try and game the figures to meet the rules.  We just did it badly, and at the wrong time.

 


I just can’t see us winning an appeal. Yes the EFL have been a shambles, I don’t think anyone could argue they haven’t but the fact is we have massively gone over FFP and I don’t believe an appeal will change that. The amount we have gone over equals -12 points. How can that be reduced? 

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7 minutes ago, Manwë said:

Well I've read it in full, as interesting as it is, I again would be worried about Wednesday's next move.

 

Firstly, the sale and lease includes Wednesday paying £3m a year to Sheffield 3 Ltd(Para 105), with Wednesday paying for maintenance too (Para 122).  That was based on a £40m valuation, not the £60m that it became.    Whether these numbers are followed through to reality now, I don't know, but that's what Wednesday said to the EFL would be.  

 

Secondly, the valuation of £60m is plucked out of the air it seems.  £37m-£42m seems to be the vague figure mentioned throughout, but £60m was the final price.   No valuation of Hillsborough was carried out that I can see, or if it was carried out, Wednesday didn't show it to the EFL.  There doesn't seem to have been any attempt to apply a true valuation and see the numbers for what they are, more a see a problem number and see the valuation for what it needs to be.

 

Thirdly, para 2 it states that he EFL were out to help Wednesday in Autumn 2018.  From that point on, the club dithered and delayed and tried to get a solution/valuation sorted as it was looking at how others (Villa) had managed to get away with it, and follow their example. 

 

Fourthly, we were creating documents and backdating them (Para 102, Para 54, 55) to the previous accounting year.  The Heads of Terms, was not done that is legally satisfactory until after the relevant accounting period (Para 101) and that no legally binding document existed for the right accounts.  Annex 2 shows Wednesday had two Head of Terms documents dated 15th July 2018, but one sent to the EFL on the 15th August 2018 (£37.5m+) and the other higher figure (£42m+) sent on the 17th of August 2018.   

 

Fifthly, the auditors were happy, as long as there was a valid valuation of Hillsborough and a legally binding agreement was in place in the correct period.  There wasn't ever such a valuation.  But, even if the auditors were happy as Larry and the EFL accepted it without looking further, the EFL would be wrong (Para 76).

 

Finally, Wednesday relied on unqualified and inexperienced solicitors to carry this transaction out, and it shows.    Staggeringly incompetence.

 

I can't be arsed to spell out the rest as it's less important, but simply put, if the Heads of Terms can be proven to have been valid on 31 July 2018, then Wednesday have a chance with an appeal.  But with numerous Heads of Terms documents changing, but the date remaining as 15 July 2018 (Annex 2), it's highly suspicious.   If both had been created on the 15th of July 2018 as they claim, then why on the 15th of August would Wednesday send to the EFL the lower one that had already been superseded by the higher figure one?

 

From start to finish, we've acknowledged that we are going to or are falling foul of the P&S rules.  We know it, it shows throughout the document.  Yet all we could do is try and game the figures to meet the rules.  We just did it badly, and at the wrong time.

 

and answer this: if you were in charge and the heads of terms was signed on 15 July and you knew the deadline was 31 July and, assuming you were not incompetent, would you have:

(a)  immediately sent the signed HoT to the EFL and ask them to confirm it's acceptable; or 

(b) on numerous occasions between 15 July and 15 August, have meetings and email communications with the EFL referring to the fact there was no binding agreement, then produce an agreement on 15 August which contradicts all of that, and appears to have been signed before the deadline - oh, coincidentally on the 15th of the previous month as well.  

 

Answer (a) - you are far too competent for us, please apply elsewhere.

Answer (b) - when can you start! 

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21 minutes ago, Manwë said:

Secondly, the valuation of £60m is plucked out of the air it seems.  £37m-£42m seems to be the vague figure mentioned throughout, but £60m was the final price.   No valuation of Hillsborough was carried out that I can see, or if it was carried out, Wednesday didn't show it to the EFL.  There doesn't seem to have been any attempt to apply a true valuation and see the numbers for what they are, more a see a problem number and see the valuation for what it needs to be.

 

If the stadium sale had been carried out correctly and accepted by the EFL, I wonder what our financial position relating to P&S regulations would have been the following year?

:ph34r:

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