share pools/board decisions

[Jacko51]

 

Out of interest, does anyone know if the existing 'vote of no confidence' board's shares are held in their own name, so they may be personally liable, or are they held by a 'nominated limited liability company'??

 

All of the current directors hold their shares in their own names according to the share register.

[MagicFlask]

Interesting stuff.. if the worst were to happen, and if (it should never come to this) administrators were called in, is it only the remaining directors who would be held jointly and severally liable for any guarantees (the point I'm getting to, is are all the ex -directors safe from being sued, eg, the directors that have resigned over the past year, would they be safe, also the directors voted-off at the last EGM? (if this were so, then the few remaining directors would become 'ever more financially responsible' for their guarantees to the club.. suddenly perhaps I can see why Mr Bratt is not able to say anything much at the moment- he and other directors may be under immense strain.. if it were me I'd just be tempted to stay in bed under the sheets.. if Micky has gone into this with his eyes wide open, he must be very confident that he can make the team perform so entertainingly and so well this year that we'll get bumper crowds and the club will progress and prosper... (is that bordering on over-confidence or arrogance if that were the case?) )

 

Going into administration would only make them personally liable (IMO) if they acted negligently in allowing this to happen......or if they were trading illegally. They would still be liable for any guarantees they'd signed up to personally as a director - but not for the debts of the company as a whole....

 

Would be interesting to see what happened....

 

I think ( not checked) being voted off/removed as a Director removes the responsibility, but not sure....resigning appears not to do that, though, could still be held liable.....that might also explain a few things!!

 

PS I'm not an "expert" on this - I did work as an accountant for a few years, and have a law degree from the 70s, but I'm looking this up on the web as I go.....so it's not cast iron.....

[N.kent]

How about trying to raise the 50k via the supporters club ?

1000 x £50 = 50k in theory but there are some local business men out there who may like to donate ie Rob Lee needs to build bridges and offer an Olive branch according to most he got 10k over the odds for his shares an email to him asking him for a donation to help end the Judas saga.

Also a question i have is In business law i thought one solicitor can not act for 2 parties in a business deal.Did MA sign any commitments to join the board blindly or did he have the clubs solicitor acting for himself and the Club at the time off joining the board.

[MagicFlask]

I think the 50k sponsorship issue's a bit of a red herring unless we can find someone willing to sign up for the guarantees and financial side of it....whoever it is would need to do due diligence first, or risk losing house, whatever.....

[paulnv]

I'm pretty sure that under company law ( so the articles don't apply) the sponsor can't guarantee - they are not responsible as a director for the company, and the liability rests with the director in person, hence the recommendation on insurance and getting advice...so MA is in the same boat.....

 

I don't believe that Company Law has anything to say on it, nor is it necessary. It may be in the articles, but frankly it is up to the directors to determine what they believe is fair amongst them and what the lender is willing to accept. I would have thought that Broxap set a precedent but I have no idea whether Mudie or Broxap gave guarantees if at all.

 

Anyone can give guarantees - ideally the director because he is party to the decisions, but in some cases the guarantors are not directors and rely on information fed back to them. Guarantors tend to be those with the deepest pockets, since a joint and several from a pauper is worthless. I don't see any problem with the guarantee being provided by the sponsor as long as both the sponsor and the director are happy with the arrangement.

[tisdeano]

How about trying to raise the 50k via the supporters club ?

1000 x £50 = 50k in theory but there are some local business men out there who may like to donate ie Rob Lee needs to build bridges and offer an Olive branch according to most he got 10k over the odds for his shares an email to him asking him for a donation to help end the Judas saga.

Also a question i have is In business law i thought one solicitor can not act for 2 parties in a business deal.Did MA sign any commitments to join the board blindly or did he have the clubs solicitor acting for himself and the Club at the time off joining the board.

 

Putting 50k in right now is not the way forward in my opinion

[Stone Valiant]

I don't believe that Company Law has anything to say on it, nor is it necessary. It may be in the articles, but frankly it is up to the directors to determine what they believe is fair amongst them and what the lender is willing to accept.

 

Company Law always supercedes the Articles of Association. AoA have to be drawn up within the framework of Company Law

[paulnv]

Does it constitute negligence if, as a director, you state publicly that you have no interest in Board Room matters and are not likely to participate in any discussion to do with the running of the business other than those directly related to on-field matters??

 

This is not a get-out clause although those directors specifically resposible for certain areas of business like the sales director could be deemed more exposed where a "problem" stemmed from a sales transaction. In genearl terms it's all for one and one for all, but as I have said before, the specific guarantee is the worry, negligence is rarely proved.

[paulnv]

Company Law always supercedes the Articles of Association. AoA have to be drawn up within the framework of Company Law

 

Agreed - now show me where there is anything in Company Law on this subject - that is my point.

Is there anything in the articles? - there is certainly nothing in Table A so that would require something specific that has been included because the problem has been forseen. If there is something in the articles however then it is straightfrorward.

[MagicFlask]

I don't believe that Company Law has anything to say on it, nor is it necessary. It may be in the articles, but frankly it is up to the directors to determine what they believe is fair amongst them and what the lender is willing to accept. I would have thought that Broxap set a precedent but I have no idea whether Mudie or Broxap gave guarantees if at all.

 

Anyone can give guarantees - ideally the director because he is party to the decisions, but in some cases the guarantors are not directors and rely on information fed back to them. Guarantors tend to be those with the deepest pockets, since a joint and several from a pauper is worthless. I don't see any problem with the guarantee being provided by the sponsor as long as both the sponsor and the director are happy with the arrangement.

 

We maybe need to distinguish between guarantees of existing liabilities etc. which directors may have to give, which presumably a sponsor could give on their behalf, and the director's liability for the company as a whole caused by illegal trading or negligence.

 

In spite of the fact that creditors tend not to pursue debts in that way, the administrator has a responsibility to maximise the benefits on their behalf, and so negligence by directors could well be in their interest to pursue - especially if the directors do have funds that can be pursued....people have been known to lose homes etc

 

All in all, it would have been wise for MA to get his guarantee in writing from Meigh, if that's the case......

[geosname]

In the articles [i think] it states that DIRECTORS shall take on guarantees... it doesnt state sponsors.

[paulnv]

We maybe need to distinguish between guarantees of existing liabilities etc. which directors may have to give, which presumably a sponsor could give on their behalf, and the director's liability for the company as a whole caused by illegal trading or negligence.

 

In spite of the fact that creditors tend not to pursue debts in that way, the administrator has a responsibility to maximise the benefits on their behalf, and so negligence by directors could well be in their interest to pursue - especially if the directors do have funds that can be pursued....people have been known to lose homes etc

 

Agreed but bear in mind

- the percentage of those directors (collectively)that have paid up on the guarantees - almost 100%

- the percentage of directors that have been sued for negligence - close to zero. I know it is a legal possibility but I have personally no experience of it at all.

[tisdeano]

In the articles [i think] it states that DIRECTORS shall take on guarantees... it doesnt state sponsors.

 

yes Geo

 

is this evidence of the board hiding behind the articles when it suits I wonder.............

[paulnv]

In the articles [i think] it states that DIRECTORS shall take on guarantees... it doesnt state sponsors.

 

If that is definitely the case then I would think that the directors have a problem however I do get the impression that the legals are being made up as they go along.

[MagicFlask]

Agreed but bear in mind

- the percentage of those directors (collectively)that have paid up on the guarantees - almost 100%

- the percentage of directors that have been sued for negligence - close to zero. I know it is a legal possibility but I have personally no experience of it at all.

 

If you add into that equation the Shadow directorship position, then I reckon NLV made a very wise decision......interesting discussion....