Thank **** I'm not the only one who thinks this way, I can't believe the time someone can spend on going over and over and over on all this when there's literally not a single thing they can do about it!
Unlike your car Companies (as football clubs are) are their own seperate legal entity from their owners. Think of them more as a person, in law they are treated that way really - i can put money into a bank account for another person but i can't just take it back again. The director of the company has a fiduciary duty to act in the best interests of the company - that is not always going to be in the best interests of the owner. For instance if the owner decided to pay themselves chunks of money out of a company without reason it would be illegal (possibly not criminally depending on how it was done but certainly a breach of corporate practice, enough to have them removed and fined). No idea how Donald is financing things to be honest even having skimmed through the above, I would agree there's no major benefit in worrying about it. We get the some thing with Ashley and i accepted long ago there's nothing i can do about it so...
ps. what gets people backs up is when clubs are leveraged. Buyers essentially use the clubs own money to buy it and then get the clubs to pay off the debts which they, the owners, had saddled it with. The Glazers at Man Utd are an excellent example of this and Hicks and Gillett tried the same at Liverpool. The difference here is that Sunderland were not in a healthy state when Donald and Methven came in so I have less issue with it. There were no billionaires riding into town to take the club on, yes they are doing it on the cheap but at least they are doing it (and trying to find others with good money who will help)
This is spot on for me. Also, we are limited by FFP/SCMP so the club can't spend as much as it likes on players. Plus how do we know he hasn't already repaid most of the £20m? There were a lot of legacy payments required for old players etc. It could be down to £5m now, just enough to cover next season's loss.
Because he used the club's parachute payments (instead of his own money) to pay Ellis Short for the club. So he owes that money back to the club.
Trying to take money out of someone’s bank account would be illegal, Kittenmittens specifically states that Stewart Donald has not done anything illegal. In order to understand, I like to reduce everything to the lowest common denominator that's why I used the example of my car (I could invent all sorts of scenarios which would make that transaction illegal but they would just be red herrings). I wrote that " Stewart Donald owns the club and can basically, within the law, do what he wants with it" so I am not sure what your point is.
I have no wish to get into an argument with you KM, but the sources and quotes are often open to (mis)-interpretation, especially when they are presented without context. A slip of the tongue ('takeover' as opposed to 'investment', spoken by whoever, can be spun many ways, for example. This is my last post on this thread, enjoy yourself, I have no further interest.
No, he owes it to his football company. Haslam explained above, why that's not the same as owing it to himself. Another way of looking at it is that he could have taken the parachute payments from the club, and used that money to pay off his personal debts (to Ellis Short). If you take money out of your own company, you need to eventually repay it, unless the company owes you that money (e.g. for dividends, wages, loan owed to you). I know it's all via Madrox Ltd but I'm trying to keep it simpler.
The buying a car analogy doesn't work. Here's the best and simplest analogy I have: Imagine I own a company that has 1m in cash in the bank. Last year the company made 500k, but had costs at 1m, so a 500 grand loss. Now if I took the 1m cash in the bank as a directors loan and used it to buy a mansion, would that be a good thing for the company? Now let's say I agree to repay that loan 'as necessary', so if we make another shortfall, I'll make it up by paying back my debt. Sounds fair? But this year, I also fire half of the staff, and the company is now only spending £500k a year, with revenue of 500k, its treading water. So there is no shortfall, and I don't need to put any of the 1m I owe back in. Now next year, we have an opportunity, we're in the top 50 companies in the uk at what we do, but a new contract is out there if we have more members of staff to handle it and invest in our tech infrastructure. Getting that contract would push us into the top 40 companies, and the rise in revenue could get us hiring more staff and winning more contracts, we could even be in the top 20 companies. Now imagine, with all of that on the line, if I refused to hire the members of staff, and instead said that we'd have to just continue as we are, and hope for the best, despite me owing the company twice as much as would be needed to satisfy the new contract, and telling people that I have the cash to repay it, but I won't. If you were a shareholder in that business, how would you view my actions?
My main point was just that companies are specifically very different to anything else you could own. They are their own legal entity and not really comparable to anything else to be honest (not having a go, just how it is), I'd love to say the reason was due to protecting employees (which is how it is often framed nowadays) but it actually comes from the industrial revolution and protecting banks and investors. Bascially if you trashed your car it's your problem, if you trashed your company it has a knock-on effect to many others (suppliers, investors, employees, etc) so you aren't allowed to just do with it as you want (for bigger companies, if you have a small one it's not so much of an issue). You are correct to highlight the words "within the law" and from what we know he hasn't done anything illegal (as i say in the ps afterwards I think SD and CM are doing their best), there are certainly immoral practices though which are legal but drain money from companies (I could bore you all with Mike Ashley information but this is probably not the time or place!) and that is, i think, what kittymittens is wary of. The parachute payments money is a valid point of concern but in fairness to SD he has been open about it all.
Leveraging is legal if done correctly. In some instances it is hugely immoral (Man Utd, Liverpool with Hicks and Gillett) but other times necessary (as it may have been here if no other options were on the table).
I will put the same question to you, is Donald's actions in taking the money out of Sunderland AFC illegal?
It's not illegal. I've stated that. I'm asking you now, if you were an investor in the above company, would you ask the owner why we couldn't use the money he owed to finance the new contract?
I really hope Sunderland win some games and buy a good player or two in January then we can all talk about the football again
Thanks for your responses, very enlightening I'm on grandparent duties now so will read digest and respond later
