Adam Pearson Consortium



GinoBartali said:
You’re confusing two completely separate issues. The transfer of shares being one, assignment of a loan agreement being another.

You can not transfer ownership of the organisation and not deal with or discharge agreements to which that organisation is party.

The loan will be governed by a loan agreement. As is standard with any corporate finance agreement, there will be a weighty section relating to assignment of the agreement to a third party. When you secure a loan you are subject to credit approval process, the same credit approval process will have to be satisfied by any prospective purchaser and will be at the discretion of the finance provider.



But SBC might not. They want to know whomever is on the hook is good for that amount of debt.
Click to expand...

If the shares in Sunderland Limited are sold, and a loan taken out by Sunderland Limited exists, and continues to be the liability of Sunderland Limited throughout, who is the third party to whom the loan is assigned? The loan stays exactly where it always was. I'm not denying that SBC will want to be involved, I'm simply curious as to your views on the legal personalities involved. The loan, and the assets charged as security for it, remain within the same legal entity throughout. Any initial credit checks will have been against the entity taking out the loan. The loan is secured by fixed and floating charges on the assets of Sunderland Limited. There is no evidence in the charge documents of assets of any other party giving security. The situation would be very different if the loan was also secured on the assets of Drumaville Limited, or by personal guarantees from the directors of Drumaville Limited. that would indeed require an assignment of those securities to a new owner. All the indications are that the sole entity "on the hook" for the loan is Sunderland Limited. In the absence of other third party guarantees, then any new owners will have the normal protections afforded by limited liability.
 
kingkeane said:
Nixon saying the latest development on Pearson (consortium pulling out) isn't the total picture. Sounds like he's expecting more info this week.


Alan Nixon‏ @reluctantnicko 1h1 hour ago

Yes. But there’s more to this latest development than meets the eye.

See what develops in next few days.
Click to expand...

In a perfect world that would mean a wealthier consortium has gazumped them .... in the world of SAFC it probably means that due diligence has revealed a scale of financial Armageddon on a completely unprecedented scale which will ensure the club is never sold.
 
this all feels like we will be in even more shit next season than we currently are, if that is even possible.FFS.

money-fuckers wrought havoc on the economy that we are still in the hangover from, and here we have more money-fuckers allowed to use the club to its detriment. Im f***ing sick of it all.
 
Grumpy Old Man said:
If the shares in Sunderland Limited are sold, and a loan taken out by Sunderland Limited exists, and continues to be the liability of Sunderland Limited throughout, who is the third party to whom the loan is assigned? The loan stays exactly where it always was. I'm not denying that SBC will want to be involved, I'm simply curious as to your views on the legal personalities involved. The loan, and the assets charged as security for it, remain within the same legal entity throughout. Any initial credit checks will have been against the entity taking out the loan. The loan is secured by fixed and floating charges on the assets of Sunderland Limited. There is no evidence in the charge documents of assets of any other party giving security. The situation would be very different if the loan was also secured on the assets of Drumaville Limited, or by personal guarantees from the directors of Drumaville Limited. that would indeed require an assignment of those securities to a new owner. All the indications are that the sole entity "on the hook" for the loan is Sunderland Limited. In the absence of other third party guarantees, then any new owners will have the normal protections afforded by limited liability.
Click to expand...

The third party to whom the loan would be assigned would in this case be the new owner. There are a number of ways to structure an SPA (share purchase agreement), I’ve never seen one that doesn’t stipulate that it’s either a “debt out” deal, whereby the owners pay off any loans as part of the transaction and any benefit they receive is net of that Alternatively, any loan commitments transfer over to (assigned to) the purchaser. This requires the explicit consent of the lender.

How many corporate loans do you think would ever be issued if it were possible to walk away and leave loans at risk to the lender?
 
Alfa said:
In a perfect world that would mean a wealthier consortium has gazumped them .... in the world of SAFC it probably means that due diligence has revealed a scale of financial Armageddon on a completely unprecedented scale which will ensure the club is never sold.
Click to expand...
Or Short is simply asking too much (previous reports that he wanted a take from future transfers, any future success for example)
 
Didn’t this Hull feller just join this consortium recently? Mebbes he’s pulled out but the consortium still exists? Mebbes he was gonna be the ceo/chairman type and he’s decided against it.
 
GinoBartali said:
The third party to whom the loan would be assigned would in this case be the new owner. There are a number of ways to structure an SPA (share purchase agreement), I’ve never seen one that doesn’t stipulate that it’s either a “debt out” deal, whereby the owners pay off any loans as part of the transaction and any benefit they receive is net of that Alternatively, any loan commitments transfer over to (assigned to) the purchaser. This requires the explicit consent of the lender.

How many corporate loans do you think would ever be issued if it were possible to walk away and leave loans at risk to the lender?
Click to expand...

But nothing happens to the debt. The loan was made to Sunderland Limited, and remains with Sunderland Limited. For sure, the new management has the normal corporate responsibility to ensure that debts are paid as they fall due - standard insolvency law. No-one is walking away from the debt. Sunderland Limited has and will have the obligation to repay the loan, and failure by the company to do that will result in the lenders calling in their security by appointing administrators. The obligations of Sunderland Limited are unchanged by the fact that there are new shareholders. Sunderland Limited cannot walk away from the debt unless it puts itself into insolvency, and, where there is a floating charge in place, it could only appoint administrators itself with the consent of the chargeholder. You appear to be confusing sales of the assets of unlimited liability businesses with the transfer of shares in a limited company. A loan agreement exists between Sunderland Limited and SBC. The shareholders are not and will not be a party to that agreement.
 
LineMonkey said:
Or Short is simply asking too much (previous reports that he wanted a take from future transfers, any future success for example)
Click to expand...
If that were true, im not surprised that people are telling him to forget it.

Why should short benefit from someone else cleaning up his mess?
 

Back
Top