No they are not. No rule of law says that new company, buying a business out of insolvency, is either repsonsible for paying the debts of its previous owners, or for suffereing a financial or perforance penalty for so doing. It is only responsible for its own future actions.

They are the supposed rules of the RFL. Except they are not even that, since you will not find the 6-point sanction or any mitigation or any financial penalty set out anywhere in the RFL bye-laws or Operation Rules. It is totally down to the RFL discretion.

Bradford and the RFL aside I think the rules on this need looking at as it's seems far to easy to run up massive amounts of debt, walk away from it and just start again.

[i[size=200=#FF0000AMEN TO THAT!!!!![/size[/i

Precisely what I have been asserting. Need to be able to deter - and punish - those who DO that. Not those who try to clean up the mess they left.

btw...what I DO totally agree with, is that the same people should not be allowed to start up again having defaulted on their debt. And indeed, I think that is one thing the RFL will always ensure. If only because they'll likely lose any public sector funding otherwise. I always assumed that this was the reason the RFL took steps in Bulls last administration to that looked for all the world a marker to prevent any of the former shareholders buying the business.

TBH I was talking OUTSIDE RL or even sport but in general business.

And absolutely. It is a scandal when it (all too often) happens. And we all probably know people who have either done it or suffered from it.

There ARE various legal provisions to attempt to curb the wost abuses. But the law has to strike a balance between stifling rescues and genuine attempts to start over again on one hand, and phoenix bandits screwing their creditors on the other.

War story example: I remember going to a creditors meeting in London of an agricultural equipment dealer once. Owed us about £50k IIRC, a lot more to the bank and lots to a whole string of creditors. The insolvency practitioner spent ages telling us how he had a proposal to sell the business to a new company, for £x which would have meant a dividend of maybe 25p in the £ - if we were lucky. We were told this was the best deal available, and that otherwise it would be liquidation an we'd get nothing. It was a CVA being proposed, to take the business out of insolvency.

It all sounded like a best-efforts job. And it transpired the bank had already indicated their agreement. As had HMIT (as was, then) as it was then a preferential creditor enjoying Crown Preference. They needed 75% by value of the creditors to agree. They already had about 60%. There were about 30 creditors represented there. The two directors were telling bthe meeting how they had since both found jobs as repairmen for another company. They assumed agreement would be a formality.

They reckoned without me.

I spend about an hour firing questions at the insolvency practitioner and the two directors. Gradually dismantling their story about what they said had led to the downwall (all bad luck, of course...) and what the future intentions were. Seemed that the company these two bandits had "found jobs with" was the Newco, wanting to buy the business (cheaply). And, after a lot of evasion, I finally got them to admit that Newco was owned by their wives...

Oh what a tangled web we weave...

Anyway, the proposal was voted down. I got the plaudits from the meeting (although we still got paid sod all in the end...) and the eternal hatred of those who had convened it.

But nothing much has happened since to stop that sort of banditry. The nearest thing has been the abolition of Crown Preference, which has made HMRC far more activist and challenging now (and rightly so) as well as some widening the scope of when you become personally liable. We have seen the impact of the former in sport generally and certainly in RL. And I'm really not sure what you CAN do, if you want to retain an environment for people to take risks and be able to make mistakes, and learn from them and start over. Alhough makinging the directors automatically personally liable for any taxes collected (PAYE, VAT etc - money that was never theirs in the first place) if they are not paid within 7 days of the tax being collected from employees or customers, might concentrate minds?

But I wish you could. Because, when it happens, id does my chuffing head in.

Derision again? The last refuge of the incompetant.

You really do come across as a rather sad and pathetic creature, you know. I have long thought you must have mental health issues.

The example I quoted (there are many I could have used) was to provide information on the sort of things that go on, to anyone who might have found it helpful. But also to show people that, unlike you, clearly, I might just know what the hell I am talking about.

The voice of experience? You were the one who initially said that I added so little to so many threads....and if you're doing to call someone incompetent then at least learn to spell it!


What was that about derision again?


Nope. You know a little bit about what is going on, which more often than not, is far more dangerous than knowing nothing. Unless you have your cheque book out and are buying the current "entity" then you do not know what is going on. A knowledge of business law, or a limited idea what has gone on before does not put you in a position where you can dictate to or lecture others. You overwhelming sense on "importance" together with your following of posters asserting your superiority with attacks on anyone who dares question you simply points to an overriding sense of self importance that is not mirrored in the majority of others opinions of you.

In short, I applaud your defence of the club you support and have patently been involved in, more than your average "fan", but your constant denial of any wrongdoing, specifically with the punishment being passed along regardless of the number of owners, smacks of a loss of a grasp on reality.

The Bulls could change hands 20 times this week.....the penalty for their misdemeanours will follow them whomever is picking up the tab and that, I am afraid, is the reality of what has gone on here....no matter how many ways you try to paint it.

See......not sad, not pathetic and not DICTATING either.....just delivering a dose of reality.


Now...where's that Collection Bucket?......

Sorry......but it's just too beautiful to not re-post!

Sorry......but it's just too beautiful to not re-post......AGAIN!

It is worthy of its own thread, but I doubt the powers that be would allow it....

This is what should have been brought in as soon as the '50% of income' salary cap idea failed.
A bond/guarantee/insurance system would also make us best buddies with HMRC, which is where I think the problem lies and where the pressure is on the RFL to sort out the whole mess and stop clubs from failing to pay their taxes or other creditors.
One problem could be, at what point do you make the club stump up the bond? can you impose it on existing owners or do you need to wait for a change of ownership?

Gutterfax’s hypocrisy on this thread is hilarious, The king of the ellipsis............... taking........... the mick about someones spelling/grammar, and Mr ‘Mail Merge, look at how many NZ dollars I earn, I have Ian Lenegans phone number dontchyaknow’ having a pop at someone for posting something a little ‘look at me’

Well done Adey, you have managed to be called self-aggrandizing by a guy who makes Bono look humble.

That was a deeply moving anecdote. I am sure your dumb acolytes will think it marvellous.

I think it could be improved if you end it with - in best Alan Partridge mode - "Needless to say I had the last laugh."

HTH Adeypartridge!

Good point.

Change of ownership, for sure.

I'm not sure you could, in equity, impose it on existing owners? That would be unfair, bit like retrospective taxation, and very bit as unfair as punishing new owners for the sins of the old? In that case, maybe use my alternative of more extensive independent financial supervision, paid for initially by the RFL?

You'd not have to impose it on ANYONE of course, if they committed to maintaining a set minimum level of shareholders' funds. Well-structured clubs like Leeds, or ones where their owner has formally subodinated his loans (like Hudds used to be - not sure opf current situation) - would not be affected anyway, since they would already meet the funding criterion.

I think this is where it went very very badly wrong when licensing was brought in. Had one of the conditions for being awarded (and retaining throughout the Licence period) a SL Licence been you must maintain a set mimimun amount of shareholders' funds, or a suitable bond or guarantee instead, and that this would be reviewed quarterly and the results made public at least to all the clubs, then I doubt we could have seen the train crashes we have.

Or, at least, action could have been taken much much earlier, before most of the damage was done. And, in particular, secret loans to clubs, like the one that did SO much damage to Bradford by postponing the day of reckoning, could thereby not have happened.

The oblem, of course, was that there was - and remains - so little real money in the game, that you'd likely have ended up with a SL of half a dozen clubs.

If you want to go down that sort of route, there's a pretty simple and better alternative:

The RFL withholds some of every club's Sky money distribution.

Then, every month, every club has to advise the RFL of what their income tax & National Insurance Contributions bill is that month after they run their monthly payroll. The RFL then pays it direct to HMRC without delay (using the withheld Sky money) as agent for the club.

Would be a very simple process to operate.

The devil would be in the detail, including the risk of the RFL being seen as "shadow directors". And, for the larger clubs, the amount would probably be more than the current Sky distribution. But my initial reaction is I very much like the sound of that.

Its too simple and straightforward and sensible though. So stands no chance of getting adopted.

I think that's a dreadful idea - one of the issues in running any business is being able to manage your cashflow, putting in some artificial constraint like an RFL holding account would seriously compromise the director's freedom of action.
Surely we just have to accept that, just like any other business there will be good management and poor management, some will succeed and some will fail.
If not, then rather than have the RFL acting as a giant piggy bank why not go to a situation, like in the US, where all the players are actually employed by the RFL and out on a draft to the clubs? Then the directors of the clubs can just manage the pie stalls - oh wait a minute.....

The thing is, though - the PAYE - or at least the PAYE other than the Employers' NIC element - was never the company's money in the first place. It was deducted from employees, and effectively held in trust pending payment. That is what makes it different to other creditors.

Once you have paid your employees, it is not your money any more.

Not paying this part of your PAYE on time is no different in my view to not paying your employees on time. People rightly go apoplectic when a business uses money due to employees for other more pressing demands. How is this any different?

If companies want to avail themselves of a loan from the taxpayer, then go through it through the proper channels. And I'm saying that as someone many years in business, some of which have been having to mange extremely tight cash flow situations.

If a club genuinely has difficulty, then the answer is straightforward. See if you can agree with the RFL about advancing Sky money. That puts the RFL in the place of HMRC as a creditor of the club, but you are keeping HMRC off everyones' backs.

Surely PAYE contributions are no different to vat ?
Once goods/services are paid for, all businesses are merely tax collectors, on behalf of the government.

Quite right, and as far as PAYE and NI is concerned there is a delay between collection and payment due date, which depending upon your actual pay date can be well over a month - that cash is better off in your own bank than in an RFL holding account. I'm not advocating not paying it on time, merely making the point that in any business cash is king and you want to be in control of it.

While I accept much of what AdeyBull has said in that post, there's no answer to why should RL businesses be treated any differently to any other business!

Very fair point about the timing differences. The PAYE is die 22nd month following. If the RFL deducted it from a Sky distribution due 1st of the month, then you have lost the use of money you are entitled to use - as long as not beyond the due date - for 22 days.

So, lets make it so either:

1 - The RFL deduct it from the NEXT month's payment - so all clubs get an interest-free loan of the amount of their PAYE bill for 6-9 days

or

2 - The RFL advances the affected clubs an amount equal to an average month's PAYE payment. Same result eitehr way.

Would something like that make it more equitable?

Very different
1. only collected quarterly
2. the gross VAT will have input VAT deducted from it so till you get to the end of the quarter there isn't a known amount.

Either of those would obviously work, but then the RFL is acting as a bank for those businesses - you call them "affected clubs" - what about the RL clubs that are well run and don't need such molly-coddling, how do they feel when they see incompetence elsewhere being effectively waved away?
What penalty should "affected clubs" have to pay for being spoon-fed in such a way - interest at x% over base?

That should help them.
Firstly, tighten their cash flow and then charge interest for doing so, nice.
Do you work for a pay day lender, interest at 4999% APR ?