fat_tony Posted August 25, 2009 Report Share Posted August 25, 2009 I was having a chat with a Dons fan workmate and he mentioned to me that ourselves, Hearts and Hamilton were all declared bankrupt. This came as quite a shock to me as I was under the impression that we had been operating at a small profit the last few years. Obviously I thought he was at the wind-up so I asked him for a source and was given this link to a report by Equifax into the credit status of SPL and EPL clubs: Equifax Report Now, I'm afraid I'm not that familiar with all the terminology in the financial world but the statement below Motherwell is as follows: *Motherwell Football and Athletic Club Limited is a company voluntary arrangement, so automatically given zero points and insolvency rating. I'm just curious as to whether this is actually the case and if so, what impact does this have on the running of the club? Also, due to the number of sizeable transfer fees we've received over the past couple of years, would the club not be doing reasonably well? And what would be the reasons for voluntarily declaring bankruptcy? Like I say, I may just have the wrong end of the stick with this but it caught my interest and I was curious as to whether this was a recent development or whether we have been operating this way for some time. Quote Link to comment Share on other sites More sharing options...
unknown Posted August 25, 2009 Report Share Posted August 25, 2009 Would the CVA not be from when we went into administration? I presume we would keep that until we have paid off the creditors what they are owed. Quote Link to comment Share on other sites More sharing options...
fat_tony Posted August 25, 2009 Author Report Share Posted August 25, 2009 Would the CVA not be from when we went into administration? I presume we would keep that until we have paid off the creditors what they are owed. That makes sense to me, like I say I don't really have a clue when it comes to financial wheelings and dealings. Quote Link to comment Share on other sites More sharing options...
daver Posted August 25, 2009 Report Share Posted August 25, 2009 I think if you've been in administration (which might be the voluntary agreement as Motherwell put themselves in the hands of the administrator) in the recent past then you have a zero credit rating for a set length of time. I have absolutely no accountancy training though so may well be wrong. Quote Link to comment Share on other sites More sharing options...
weeyin Posted August 25, 2009 Report Share Posted August 25, 2009 I think all it means is that they don't award us a score because we were in administration a few years back. It doesn't mean we're bankrupt now, just that we don't have a credit score. Quote Link to comment Share on other sites More sharing options...
Ya Bezzer! Posted August 25, 2009 Report Share Posted August 25, 2009 This is a good analysis of our accounts that explains everything so people like me (us) can understand it. http://www.football-finances.org.uk/motherwell/index.htm Quote Link to comment Share on other sites More sharing options...
TheLip69 Posted August 25, 2009 Report Share Posted August 25, 2009 Company voluntary arrangement is where the company agrees to pay a proportion, or all, of it's debts from any future profits. This stops creditors from potentially winding up the company to obtain what is owed and keeps a viable company trading through lean times. Obviously with current profits being used to clear old debts places like Equifax are not going to give them a rating as a going concern. It's better for the creditors as well, talking hypothetically if winding up a company is going to net you 2p in the £ against your debts then if a company says we are going to take CVA and pay you 50p in the £ it's easy to see why it's an acceptable practice. Quote Link to comment Share on other sites More sharing options...
daver Posted August 25, 2009 Report Share Posted August 25, 2009 This is a good analysis of our accounts that explains everything so people like me (us) can understand it. http://www.football-finances.org.uk/motherwell/index.htm The administration and interest payment pages on that site make very interesting reading and certainly opened my eyes to the situation the club was/is in. I had never heard about the agreement reached in 2004 and it's surprising to read we paid 20p in the pound to our creditors. I'm sure other clubs like Dundee and Livingston paid much less but we seemed to receive much more flak in the media. I think I'll have a look at some of our competitors now. Edit: it's also interesting to see no directors have taken a salary since administration although it does wonder if this through love of the game or embarassment at the administration position. From the payroll section, I'm sure McGhee is a better manager than Malpas but he was certainly helped by the wage bill for 2007 increasing from £2.4m to £3.4m in 2008 (at over 100% of income)! Quote Link to comment Share on other sites More sharing options...
steelboy Posted August 26, 2009 Report Share Posted August 26, 2009 From the payroll section, I'm sure McGhee is a better manager than Malpas but he was certainly helped by the wage bill for 2007 increasing from £2.4m to £3.4m in 2008 (at over 100% of income)! what school did you go to? the graph shows that wages as a percentage of turnover was around 75%. that's still higher than the recommended level but given we turned a profit and that the increased wages that season also contributed to the extra income from the nancy game and the transfer fees of porter, quinn and clarky and it has to be seen as shrewd investment. Quote Link to comment Share on other sites More sharing options...
daver Posted August 26, 2009 Report Share Posted August 26, 2009 My school was so shite they knocked it down! Yeah, you're right, I've looked again and I did read it wrongly. My other point still remains though that McGhee was allowed to spend more than Malpas. Even if he did manage to invest the money well and the club was able to recoup the money later it was still a risk and one they didn't appear to want to take with Malpas. Thinking back though, the wage rises for the management team would have had a big impact on those figures. Quote Link to comment Share on other sites More sharing options...
wunderwell Posted August 27, 2009 Report Share Posted August 27, 2009 Not sure if this has been posted. The only relevance being that John is still actively being entrepreneurial and in this enviroment that is good to see http://thescotsman.scotsman.com/business/M...ners.5575458.jp Quote Link to comment Share on other sites More sharing options...
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