Dodgy owners

[hibeemikey21]

Personally, my knowledge of this area is limited, however, with regards to the Portsmouth situation, something that is puzzling me is; how can an owner also be a secured creditor?

Whilst owning the club, if he calls in the debt, he will owe himself. Therefore, not logical.

If the club has since changed hands, yes the security will be of value to him, but when he created the security, whilst in charge, that must have been a conflict of interests, no? He was looking out for his own interests before that of the clubs surely? :confused:

I know it can all get a bit more complex ala the Hearts model, i.e. Romanov holding the securities with seperate companies, not himself personally, but how can owners get away with this?

[hibee_nation]

Personally, my knowledge of this area is limited, however, with regards to the Portsmouth situation, something that is puzzling me is; how can an owner also be a secured creditor?

Whilst owning the club, if he calls in the debt, he will owe himself. Therefore, not logical.

If the club has since changed hands, yes the security will be of value to him, but when he created the security, whilst in charge, that must have been a conflict of interests, no? He was looking out for his own interests before that of the clubs surely? :confused:

I know it can all get a bit more complex ala the Hearts model, i.e. Romanov holding the securities with seperate companies, not himself personally, but how can owners get away with this?

Sorry but it is well known that all the big clubs operate like this, we are just too wee to get it. :wink:

[Kaiser1962]

I view all owners who have no historic connection to the club or the area with suspicion as their motives cannot be verified. As a "business opportunity" or an "investment" it is right up there with the bacon roll counter in Tel Aviv.

The way they discard the debts of the club (like Motherwell, Livingston , Dundee, Portsmouth and many others) is also worrying as it appears that someone, somewhere is taking the hit and administration, while designed to protect a club from it's creditors till it gets on it's feet, appears to be being used as a shield to hide behind and a tool for getting rid of debt with little significant consequences to the club or it's owner.

[Viva_Palmeiras]

I think they should be licensed, chipped and put on a lead.

.... a dodgy owners

[Caversham Green]

Personally, my knowledge of this area is limited, however, with regards to the Portsmouth situation, something that is puzzling me is; how can an owner also be a secured creditor?

Whilst owning the club, if he calls in the debt, he will owe himself. Therefore, not logical.

If the club has since changed hands, yes the security will be of value to him, but when he created the security, whilst in charge, that must have been a conflict of interests, no? He was looking out for his own interests before that of the clubs surely? :confused:

I know it can all get a bit more complex ala the Hearts model, i.e. Romanov holding the securities with seperate companies, not himself personally, but how can owners get away with this?

It's all to do with corporate identity and limited liability. The club is a different legal personality from its owner(s) and its directors. It owns its own assets and can provide them as security for finance from anyone, including the owner. If the club finds itself owing more than the value of its assets then the unsecured creditors are stuffed - there is no call on the owners to pay them - but the secured creditors will get the value of their security whether or not they happen to be the owners or directors.

In theory there's no conflict of interest because the fortunes of the club are reflected in the value of the owner's investment so what's good for the club is also good for him and vice-versa. In practice it can lead to "asset-stripping" or, as I think was the case with Portsmouth, reckless gambling, but ultimately if the owner both owns and controls the club he can do as he wishes with it, separate identity notwithstanding.

[nonshinyfinish]

It's all to do with corporate identity and limited liability. The club is a different legal personality from its owner(s) and its directors. It owns its own assets and can provide them as security for finance from anyone, including the owner. If the club finds itself owing more than the value of its assets then the unsecured creditors are stuffed - there is no call on the owners to pay them - but the secured creditors will get the value of their security whether or not they happen to be the owners or directors.

In theory there's no conflict of interest because the fortunes of the club are reflected in the value of the owner's investment so what's good for the club is also good for him and vice-versa. In practice it can lead to "asset-stripping" or, as I think was the case with Portsmouth, reckless gambling, but ultimately if the owner both owns and controls the club he can do as he wishes with it, separate identity notwithstanding.

We're owned by a bank, there is no debt, etc. :brokenyam: