this if we go bust rubbish

[JohnM]

Lots of misinformation going on here.

Administration happens on one of two ways. First, the directors conclude the company is insolvent and cannot meet its debts as they fall due. Secondly, a secured creditor concludes that there is a serious risk of default. In our case that means Short or SBC are parties who could do it.

You come out of administration in one of four ways, two of which are slight variants.

1. The administrator can trade his way out of trouble, the creditors are paid, and the company is handed back to the owners. If you think this ever happens, you probably believe in the Tooth Fairy.
2. The creditors agree to a creditors voluntary arrangement (CVA). This usually means agreeing to instalment payments, or exchanging some debt for shares in the company.
3. The trade and assets are sold on to a new company (newco). This continues the business of the old company under new owners. The old company is liquidated and the proceeds given to creditors in accordance to legal precedence.
4. The company can't be sold or rescued, is liquidated, and the business ceases to exist.

Most football clubs have exited via route 3. The chances of 1 are non-existent, and of 2 vanishingly small.

Short loses control of the club in options 3 and 4. As an unsecured creditor, he almost certainly loses everything. The best he could expect is about 5p in the pound on the £69m debt. The £101m share capital is gone.

There will come a stage (possibly after January and a sale of Watmore and Kone) where there are almost no sellable assets left and there is still no buyer. The money on his loan is effectively already "lost" (because there is no credible way of getting it paid back any more) it is simply that the loss has not yet been crystalised. At that stage all he is doing is ploughing more money in to cover the ongoing losses. Even if that is done by "loan" (which it probably is) it is lost the second it is "loaned" because it is never coming back. Ignoring that it is the club we support, it makes more sense to stop his losses increasing. Without his ongoing support the directors would have to conclude the club can not pay its debts as they fall due. In administration I agree 3 is more likely than 4, but 4 is far from inconceivable.