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Loans/ Debt to the owners

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Hep said:
I'm not defending the owners, I'm explaining how a very common accounting practice shouldn't be the next thing some of the fans get riled up about.

I asked the question, why is it a problem. No answers yet....
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It's been answered elsewhere.
 
Hep said:
It makes no difference.

The club they own, owe money to them. It's a frequently used accountancy method known as a directors loan.

Can anyone explain why they think it's an issue?
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Of course it makes a difference.

Investment is investment… cash injection.

A loan has a significant impact on the company books and valuation to any new investor or buyer.
 
Clavas said:
So the Chancers:
  • took ownership with the club debt free and "offset" the purchase price using the clubs own money
  • oversee it produce the worst team (year after year) in terms of league position in its 143 year history
  • and now have the club in debt
And people still defend them
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The club stooges do and there are a few on here....
 
Clavas said:
So the Chancers:
  • took ownership with the club debt free and "offset" the purchase price using the clubs own money
  • oversee it produce the worst team (year after year) in terms of league position in its 143 year history
  • and now have the club in debt
And people still defend them
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I know let's protest.

Oh wait we don't want to sound like mags.🤷‍♂️
 
West_Winger said:
Not if they’ve taken the money personally out of whichever company they transferred it to. All that would happen is it would get taxed on them personally as a distribution.
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The parachute money was owed back to the club which means they could not then deem an investment as a expense, of they loan the club the money they can use that as a tax write off.
 
Grumpy Old Man said:
It's possible money has come in as loans; the alternative is that it has been gifted (there are precedents for this). Given the sources of the money, I find the idea of gifts, shall we say, improbable.

Should it emerge that Chris is right on this as seems the more likely scenario, then pressure needs to be exerted by RAWA and others for this debt to be capitalised, that is, turned into share capital. It would then be possible only for cash to be recovered by way of a higher sale price for shares down the line.
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I need someone to explain all of this in simple bullet points. I haven't a clue what is going on even after reading @Grumpy Old Man post.
 
Super Mario said:
The parachute money was owed back to the club which means they could not then deem an investment as a expense, of they loan the club the money they can use that as a tax write off.
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I’m talking about the £20 million (I think it was) that was taken out of the club and then written off by the company.

The parachute money is something else.
 
Ted Lassos Tache said:
Of course it makes a difference.

Investment is investment… cash injection.

A loan has a significant impact on the company books and valuation to any new investor or buyer.
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It's net neutral, if they inject cash as shares, the club is worth more and any new investment would attract a lower % of shares.
 
West_Winger said:
I’m talking about the £20 million (I think it was) that was taken out of the club and then written off by the company.

The parachute money is something else.
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Eh, that's the same same thing isn't it? The parachute money was the 20 million taken out.
 
Hep said:
It's net neutral, if they inject cash as shares, the club is worth more and any new investment would attract a lower % of shares.
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Aye but again, they inject money, the club is worth more = they get more when they sell. But the money they put in was meant to be paying back the parachute money, so the first £20m or whatever it is that they put in shouldn't find its way back to them, it was meant to be putting the club's own money back in
 
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