codyscott

I don't know about business law but how can they be outright owners when they haven't paid for the club. When you buy a house the BS hold the deeds until you pay the mortgage in full so in my view they don't own the club.

You are correct. He was offered another contract but didn't want to sit on the bench.

Mark Hughes stated today that Konchesky & Schwartzer are going nowhere.

Yes

Yes

We are at level 4 apparently

A normal Corporate Finance transaction would progress as follows: 1. Corporate Financiers (CF) (Barclays Capital) begin the 'grooming' business - grooming the business for sale by focusing on the areas of the business that can be managed short term to make it more appealing to investors i.e. the appointment of an interim Chairman to oversee this process - highly likely that removing Rafa was part of the 'grooming' for a potential sale - this is classic CF activity pre-sale 2. Corporate Financiers identify potential buyers and require them to sign an NDA (non-disclosure agreement) 3. Once an NDA has been received then the potential investor is supplied with some but not all financial and corporate information in order for them to make 'indicative' bids. This allows the CF's/vendors to identify who are serious and who are not so serious bidders. This type of information supplied is normally forecast financial and business information which is drawn up by the CF's in consultation with the Board/Owners (it's usually called a sales prospectus) 4. Once 'indicative' bids have been received and considered then it is time to choose the 'preferred' bidder. This decision is taken in consultation with the CF's and the Board/Owners of the business (this decision is usually not all about the money - believe it or not a lot of people care who their business is going to and are happy to take a lower price from a higher quality investor - it's all relative of course when you're deciding between £95m or £100m - you're still getting a lot of fucking mulah either way but people do care about the purchaser. In our case this is clearly not so for G&H but would be for the other 3 as their reputation depends on it). 5. Once the preferred bidder is chosen they then sign an 'exclusivity' agreement and the process enters exclusivity. This is when due diligence (DD) begins, hopefully for both sides. Traditionally due diligence has been a process carried out by the purchaser to make sure the figures are not a lot of bullshit. More commonly vendor due diligence is being carried out to ensure that the purchaser is legitimate. 6. Once DD has been completed then the purchaser will usually negotiate their purchase price because of the results of the DD report (the DD report is prepared by another bunch of CF's). 7. Final agreement is then reached on the deal between both parties and a legal document is drawn up to secure the transaction. So basically people are fretting because last night's statement was a bit inconclusive - well that's par for the course in a CF transaction. But it shows how far down the road we are - we are within days or hours I would say of preferred bidder status and that means a deal is as good as done provided there are no horrors uncovered by the DD work.

Interview of Kenny Huang in China's "Love Basketball" magazine. He is the Advisor of (or at least help found or partly own) the magazine. The piece is carried by a number of news portal - mine is found at Sina net. It is seriously long - a quick translation below. **** Huang Jian-Hua: 50% confidence in buying LFC; UK Media’s ability shock me Aug 12, Beijing: This is an exclusive and first interview of Huang by “Love Basketball” (ANQ), a basketball magazine which he is the Advisor , on his effort to buy Liverpool FC. Huang (KH) explained that because of the confidential agreement he would not speak on the present process but would clarify some of the rumours etc. ANQ: Why have you keep silent on LFC? KH: There has always been a confidential agreement. Hence I cannot make any comment on the current process and have to go through spokesman and PR company. ABQ: So why can you accept the interview now? KH: The details cannot be divulged now. As there are too many interview requests, I feel I should say a few things through my own magazine but I can’t say a lot. ANQ: At what stage is the bidding going now? KH: Our interest in buying LFC has been recognised by the Board. At the same time, we have continued our work - researching and evaluating, the overall progress is good. However, there are quite a number of strong competitors. So there are still a lot of unknowns. ANQ: Who are your competitors? KH: From Middle East and from North America. The Indians have withdrawn. ANQ: At what position do you feel you are amongst the bidders? In the lead or what? KH: I feel everyone has a chance. Every bidder would feel they have an advantage so it is hard to say we are in the lead. We shall strengthen our communication with the Board and the Bank. ANQ: What are your advantages, you feel? KH: First we have a very strong Asian market and Chinese market which will be very helpful to Liverpool to get into these markets. However, our competitors have more preparation and more understanding of the EPL. ANQ: According to the UK media, (you want) the Board to reply you within 10 days? When would you expect the deal be done? KH: We have put forward many proposals and we have the answer: the Board has accepted our proposal (translator's note: proposal, not bid) and wish us to continue the process. We have a reply in less than 10 days. ANQ: You mean the Board has given you a positive reply? KH: Yes but there are still a lot of unknowns. The reports in UK media saying that we have won or ahead in the lead are incorrect. In fact, all our competitors are very strong. We have to recognize our position: not far ahead, nor the Board has confirmed accepting us. There is still some way to go. It was that we asked the Board to let us know whether our proposal would be overall acceptable and the Board has said yes. ANQ: There are sayings that you hope to complete the deal by the end of the month before the transfer window closes - is it true? KH: No. Of course everyone feel it would be best but there are certain unknowns. ANQ: How about the other rumoured completion date - October? KH: By October, it will be an open secret because by then the loans is due and the Bank has to call back the debt. ANQ: In the main who are you negotiating with at LFC? The Bank? Board? The American owners? KH: Mainly the Board. ANQ: There are Mainland media doubting your ability to buy LFC? KH: It is definitely not with my own money - but that of a consortium. Membership of the consortium still has to be keep confidential. ANQ: Someone has said Yang Guang of Franklin Templeton has joined the investment - is it true? KH: Yang Guang is a fund manager, the best amongst Chinese. However, it is also not Yang’s money but the consortium’s money. He’s only responsible for management. ANQ: So Yang and you are partners and co-intiators? KH: Yes, Yang is with me to protect the interests and rights of various investors. ANQ: What is the purpose of this consortium buying Liverpool? Some media said you have been deliberately pumping up publicity? KH: We must state that we have not been pumping publicity, if we were it should have started a lot earlier. We only admit our involvement after LFC said we are bidding. If you look at the reports, we have kept a low profile until the Chairman of the Board’s interview and then we admitted we are bidding. Our aims: (1) no firing up publicity (2) no interview. Many people said we seek publicity - this is wrong. On whether Huang Jian Hua is dealing with his own money: I clarify, it is not my money. It is a consortium. ANQ: How did you convince the consortium to bid for LFC? KH: This is a very good brand and the price is a lot lower than two years ago. Therefore, I feel it is a good investment project. ANQ: Any difficulties / obstacles so far? KH: Not enough understanding of the UK media. This is our biggest oversight. Everything should be confidential but the digging ability of the UK media is just out of our imagination. Our biggest puzzle is that they have known our every move. The ability of our competitors to make use of the media also out-strip us. What I do not expect is the integration of sports and media in UK is even higher than that in the US. This open my eyes but also already given me some disadvantages. Therefore we have engaged the largest PR company in the world which has a high capability in the UK. ANQ: What have been the fans’ view on the bidding so far? How do you deal with it? KH: The Bank and Board have had pressure from the media. Their attention to the media far exceed my expectation. This may be my biggest failure thus far. ANQ: The fans? What have the fans’ responses to all the news? KH: The PR company told us most of the fans are supportive although there are some noises too - that there are doubts on the depth of our pocket, and on our ability to manage (the Club). Of course we have to deal with these issues step by step. ANQ: Some Mainland fans have some doubts too? What do you hope them to understand? KH: I feel, there are many things of the EPL to learn from. This is the most successful league in the world. If we can learn of the good and not the bad, that will be good for Mainland. Their training method, advance experience and also raising the ability of players are things we can learn from. ANQ: How confident are you in a successful bid? 50%? 60%? 80%? KH: About 50%, I think. Our competitors are strong, and we do not have enough experience, especially we need to understand more on the big teams’ relationship with teh media in the UK. Also we are not well prepared enough on the triangular relationship between the shareholders, debtors and the Board. We still have a lot to do, and we do not have a great advantage as it was reported. We still have a lot to learn and review. ANQ: You have a lot of investments - how do you balance them? baseball, ANQ, Jilin Northwest Tigers (professional basketball team), NBL? KH: Everyone can see that the sport industry in China is tremendous. I want to get a hand in the biggest three sports in the world: baseball, football and basketball. There is a lot of “relationship” between the big three and these will help raise Chinese’ own industry to a very high level. On NBL, I was told the recent show was done well. Still there were hiccups (). ticket sale far exceeded expectation and ad boards were sold out. Still there are a lot of issues. This is our first year - we also have to improve sponsors’ rights and package, as well as tv broadcasting.

Posted by Bamba on RAWK yesterday. Just a quickie, brethren. I'm absolutely confident the Huang takeover is bang on course. I hate being evasive. I'd promised I wouldn't come back onto this thread until I had solid news, but I feel the anguish everyone is going through and felt I should pop in and try to calm the fear, understandable as it is. Hold your nerve and talk about football for a day or two. It's coming to a head. I really can't say any more.

I thought he wanted bids and proof of funding by Friday.

Thanks for the welcome guys. Brilliant and well set out forum.

I tried to post the links but as I am new I can't. Neither should have passed the fit & proper test. Tom Hicks' net worth, as calculated by Forbes, is in the hundreds of millions but that by itself is a deceiving figure. What is determined as worth and the actual amount of worth that can be easily gotten at a moment’s notice can be and usually are different stories. As Dan McGraw, in an article titled “Is Tom Hicks Going Broke?” (7/02), wrote, “Net worth is one thing; liquidity is something else entirely. Hicks' money is tied up, some in outside investments, some in Hicks Muse funds. Ready cash is a scarce commodity, no matter how many zeroes you have on your balance sheet.” In 2001, Hicks had already tried to refinance about $190 million in debt that was primarily owed by his two teams, the Stars and the Rangers into a single loan to be held by SSG. By bundling debt, Hicks can receive better interest rates and reduce overall expenses. The reality for Hicks is that he is feeling the same economic crunch that many of his colleagues in his business are also feeling. But in 2001 sports in America , contrary to some officials (See Selig before Congress in 2001), is seen as a good investment. And the fact is that SSG which is a part owner in the American Airlines Arena and sees half of those revenues and its resultant operation profits can use that as collateral against any refinancing terms. But now in late 2002 Hicks and his partners have to pay off their failed internet investments and the interest on that debt is running at about $30 million a year. Also, the HMTF funds are maturing, which means the management fees will be leveling off. The Rangers are playing badly on the field and that translates into a poor showing at the turnstiles. Less people means less money coming in from all other stadium revenue sources such as concessions and other merchandise sales. In 2002, the Rangers lost about $35 million in operation profits and their losses when interest costs were added were reported at about $50 million. Then Hicks in September 2002 places the Dallas Stars and his arena interest on the block but finds no takers at his asking price, which is assumed to be around $250 million. Hicks removes the Stars and the arena from the market place. It is leaked, coincidentally, that he had won a financial restructuring from banks to temporarily lower some of the financial struggles attached to his loans. Noteworthy is the fact that the NHL is not at its economic peak at the time with most teams losing money and a threatened labor disturbance and possible league shutdown looming in the near future. This agreement expired on June 15, 2002 . With the Stars and Rangers debt still a part of the SSG books the company goes into a technical default on that day. In July 2002, the Dallas Business Journal reports that Southwest Sports is defaulting on loans “of $135 million of debt because of steeper than expected financial losses at the teams, four well-placed sources told Street & Smith's SportsBusiness Journal.” It is reported that SSG had made a principal payment on a loan but was not able to meet certain other financial requirements of the alone from the lender. The article says, “Most loans, in addition to requiring regularly scheduled interest and principal payments, also call on borrowers to maintain certain levels of financial performance, often measured through cash flow and revenue. It is here that Southwest Sports Group stumbled, signaling just how poorly Hicks' sports empire has fared financially and another sign of the ailing sports economy.” A Hicks official, who asks to remain anonymous, says, "The default is a technical default that has existed only since June 15 -- and is not a principal or interest (payment) default. Tom Hicks is in the process of refinancing that loan." It is reported that the company “will look to cure the default through the refinancing, and perhaps by aggressively slashing the Rangers' payroll. The Stars' payroll, ranked fourth in the NHL last season, could take a hit, too.” Any of this beginning to sound familiar?

I found this info quite easily. By late 1989, Gillett Holdings was in trouble: George Gillett sold WSMV-TV for $125 million and used most of the proceeds to pay down bank loans. He astutely avoided capital gains taxes by selling the station to a minority-controlled entity, Cook-Inlet, but the transaction left $27 million due on the company's financing by August 1990. Meanwhile that fall, Storer Communications defaulted on $153 million in interest on public debt. But rather than force Storer Communications into bankruptcy, Gillett managed to convince bondholders to restructure the subsidiary's more than $500 million bonded debt. The creditors forced Gillett to cut his equity stake in the company from 55 percent to 41 percent, but Gillett maintained control of Storer Communications. He also postponed interest and principal payments on the refinanced debt until 1995, at which point bondholders would be paid in kind, not cash. Gillett considered selling some of the Storer stations, but prices for even the highest-rated affiliates had fallen 30 percent since their purchase. Storer Communications' financial troubles reflected upward onto Gillett Holdings, which had problems of its own brewing. By 1990 the company's bonds had become so insecure that some traded as low as 17 cents on the dollar. Then, in August, Gillett Holdings defaulted on over $450 million in debt. By February 1991, bondholders frustrated with Gillett's half-hearted attempts at restructuring filed an involuntary bankruptcy petition. When the company failed to meet the resulting court-imposed restructuring deadline of June 25, the company was forced into Chapter 11 bankruptcy. In the meantime, Leon Black, a former director of Storer Communications and co-engineer of the Gillett takeover, purchased large blocks of Gillett Holdings stock through his investment vehicle, Apollo Advisers. The purchases gave Black the leverage to block any restructuring schemes of which he didn't approve. Wrangling over restructuring of Gillett Holdings between Black and Gillett culminated in a January 1992 plan. Ownership of Gillett Holdings' three remaining television stations was transferred to the bondholders and Gillett himself lost control of the company, although he maintained a 40 percent nonvoting stake in Storer Communications. The plan also stipulated that George Gillett would continue to manage the television stations at a minimum salary of $30,000 weekly. The restructuring plan proposed to cut Gillett Holdings' $1.2 billion debt in half, as Leon Black offered to forgive debt in his control and contribute $40 million cash to jumpstart the floundering operation in exchange for 52 percent ownership of the new company. At that point, however, yet another takeover mogul stepped into the picture. Carl Icahn had purchased $65 million in low-ranking junk bonds, and had earned a small voice in the restructuring plans. Unhappy with the 10 cents on the dollar he and other bondholders in his class were offered in the original plan, Icahn made public and private complaints that eventually earned him 16 cents and at least 15 percent of the restructured Gillett Holdings' equity. By April 30, 1992, a plan was submitted to Federal Bankruptcy Court that was revised to reduce Gillett Holdings' debt by $75 million and rescind George Gillett's options to repurchase stock and buy back specified corporate assets. That same day, lawyers for Gillett Holdings filed 44 bankruptcy cases, placing nearly all of the conglomerate's subsidiaries under court protection. By late 1992, as Gillett Holdings looked forward to its emergence from bankruptcy court, Storer Communications defaulted on a $140 million principal repayment that threatened to cast the subsidiary into Chapter 11 as well. George Gillett himself was not immune to the "bankruptcy bug," either: In August he filed for personal bankruptcy, losing his collection of 30 sports cars and a 235,000-acre Oregon ranch in the process. However, the still-savvy entrepreneur managed to protect his $1.5 million annual salary, $5 million in Gillett Holdings securities, and $125,000 per year in life insurance premiums.

What I am confused about is the fit and proper test which is supposed to be conducted by the prem. I googled Hicks & gillett and they have been doing these LBO's since at least 2000. They have failed to pay back loans and left loads of companies to go bankrupt. If I can get this info by just googling their names, how come Moores & the board conducting the fit & proper test didn't. Gillett took out a racing team in 2007 which have also gone bust.