Takeover

[CaptainFantastico]

It’s worth bearing in mind this is a US group buying a UK based business off a complex group
of Chinese owners. It’s taking a bit longer than would’ve ideally been hoped but it’s not that surprising or room for panic

That is the complexity, I think. Three different legal areas - I presume the takeover will be subject to UK Law, though?

Fuzz - great post earlier, BTW  

No idea on that. Just relaying what I’m aware is the reason the processes aren’t going as fast as we’d all like. Probably not now helped by the obvious slow down period.

[Kit Kat Chunky]

Given there are many people on this Board who's opinion I respect (not necessarily agree with!) who are differing, it shows how difficult this process is going to be.

We all want the same outcome, let's hope the New Year will bring good news.

[Fulham Fallout]

I'm not sure getting the accounts fully 'audited' prior to takeover is as likely to be necessary as you would think.

Four reasons:

1) We're being bought for c£60m, not 5 billion! Depending on the owner and where they are getting the money from, the tolerance of risk might be greater.
2) With our overseas owners, it may not be possible to establish 'true and fair' shortly - or ever. They may decide there is a diminishing return in a lengthy financial check.
3) Due to our financial problems, the transfer window and current league position, they may decide the potential damage to 'their' club exceeds the potential damage/chance of an unexpected issue coming up in financial investigations.
4) What exactly are the terms of the takeover? It may be that certain funds are withheld. This may depend on financial results being achieved, final league position and crucially that other financial elements are as declared. I'm guessing that Lai is more than likely to sign such waivers - he is metaphorically over a barrel having to take it. His only play is to just close his eyes and pray they'll be gentle.

Frankly speaking, we are a smallish company that is not that complicated - except for ownership! The club's creditors is probably the most important and where they would start. That would have been started months ago - you'd hope! As they have recently extended more money, I'm guessing they already have. Next would be property, which again has probably already been done.

In view of the blatant disregard of company law and fiduciary duty displayed by the current owners, it would be foolhardy to proceed without independent auditors reviewing the finances before buying.  Even warranties and indemnities from the vendors would be worthless.

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It’s worth bearing in mind this is a US group buying a UK based business off a complex group
of Chinese owners. It’s taking a bit longer than would’ve ideally been hoped but it’s not that surprising or room for panic

That is the complexity, I think. Three different legal areas - I presume the takeover will be subject to UK Law, though?

Fuzz - great post earlier, BTW  

Actually that’s not necessarily the case.  It could well be, and is indeed very likely to be, Holdings selling the clean Jersey intermediate holding company to the buyer, which should be straightforward and doesn’t involve China at all, or alternatively it’s the Jersey company selling its 88% shareholding in Group to the buyer.   That Jersey company was interposed for a reason, and I suspect that was it. 

I doubt very much that anyone would be buying Holdings (the Chinese owners’ own UK holding company), as that’s where any murkiness will be.  If they are buying that company then the deal is certainly a lot more complicated.

and the auditors could be sued by the Americans, if material errors / fraud were later found to be in the audited financial historical and forecasted data. 

I think KKC stated previously that the Americans are acquiring the shares of WBA Group from holdings ltd and not acquiring the company and that a new company which will own the shares will be based in Jersey (or somewhere similar).

The Americans can’t buy Group from Holdings because Holdings doesn’t actually own Group.  Holdings owns JerseyCo, which owns 88% of Group.   They could buy JerseyCo from Holdings though, as a means of buying the 88% interest in Group.  That would make sense as it avoids the need to involve the minority shareholders in the transaction, at least at this stage

I didn’t say they were.  I said they were buying the shares of WBA group from holdings Ltd (Lai’s shares) and not acquiring the company (holdings ltd).

[fuzzbox]

Has anyone tried suing an auditor? It's the equivalent of suing a doctor, there are so many caveats and clauses regarding their 'opinion' it's bordering on impossible unless they make glaring, negligent errors. As for lai's assurances, that's why you withhold the money, rather than ask for it back!

Honestly, I'm relaxed about it. I'm confident it's going to happen - and soon. Lai doesn't have much choice any more. It's more the quality of the prospective buyer that I worry about.

[Pragmatist]

Has anyone tried suing an auditor? It's the equivalent of suing a doctor, there are so many caveats and clauses regarding their 'opinion' it's bordering on impossible unless they make glaring, negligent errors. As for lai's assurances, that's why you withhold the money, rather than ask for it back!

Honestly, I'm relaxed about it. I'm confident it's going to happen - and soon. Lai doesn't have much choice any more. It's more the quality of the prospective buyer that I worry about.

Yes I have, and yes we won but it was blatant negligence.  I share your view generally though.

[Kit Kat Chunky]

Has anyone tried suing an auditor? It's the equivalent of suing a doctor, there are so many caveats and clauses regarding their 'opinion' it's bordering on impossible unless they make glaring, negligent errors. As for lai's assurances, that's why you withhold the money, rather than ask for it back!

Honestly, I'm relaxed about it. I'm confident it's going to happen - and soon. Lai doesn't have much choice any more. It's more the quality of the prospective buyer that I worry about.

Yes I have, and yes we won but it was blatant negligence.  I share your view generally though.

Arthur Anderson wants a word

[fuzzbox]

Has anyone tried suing an auditor? It's the equivalent of suing a doctor, there are so many caveats and clauses regarding their 'opinion' it's bordering on impossible unless they make glaring, negligent errors. As for lai's assurances, that's why you withhold the money, rather than ask for it back!

Honestly, I'm relaxed about it. I'm confident it's going to happen - and soon. Lai doesn't have much choice any more. It's more the quality of the prospective buyer that I worry about.

Yes I have, and yes we won but it was blatant negligence.  I share your view generally though.

Arthur Anderson wants a word

That's why I added my own  little caveat - glaring negligence.

I've seen a number of expensive tax schemes dreamt up and sold by accountants at major firms that should have and I suspect did know better. They left their clients with huge tax problems and just walked away without any comeback.

But back to the point...

Anything to do with China and they won't guarantee anything. Which, in all fairness to them, they can't - even if they worked on it for five years. 

Any wrong opinion won't be down to negligence, so nobody will get sued.

[Midget In A Pinstripe Suit]

Added a mill or so with that win tonight

[Borin' Baggie]

The same sports lawyer that was there a few weeks ago was back again, zero idea what this means though as that's the decent of my ITK

[Brentbaggie]

The same sports lawyer that was there a few weeks ago was back again, zero idea what this means though as that's the decent of my ITK

Decent, descent or extent?