No they're not ben. The council have a duty to create jobs business etc for the city and its residents. They should be bending over backwards for any businessman but they are highly suspicious of big business and TG etc cant stand the thought of profit. We needed Mandelson etc to get Siemens in. Can you imagine Siemens trying to get their heads round TG Brady and Bayes. As I say fine Allams gone. So what now for the area? What are they actively doing? If its nothing why is it nothing.
TG wasnt bothered about Duffen borrowing money against the lease was he? Why would anyone believe a word that comes out of his mouth?
It was the Liberals who agreed the changes to the lease which allowed Duffen to borrow the money not Labour. So TG wouldn't have had any say in whether Duffen could borrow the money secured on the lease.
The main one was that he could not give any guarantees on the stadium's future. It was built and opened without any debt, but his proposal was to borrow against the freehold and that would create a debt. Anything with a debt carries a risk and, as a council, we are not prepared to have a situation like that. I may have misunderstood the part I pulled out an copied above from what TG said, but isn't this tantamount to what the council actually did by allowing Barlett to borrow against the lease?
No, the Duffen debt was secured on the lease and not the freehold. All the bank could have done was sell the lease to another company or put in a receiver and collect the rent. The new company would be bound by the terms of the lease and it would remain a football stadium. If you own the freehold you could turn it into an housing estate if you wanted. Yes they may be covenants added to the freehold to stop that but they could be challenged.
The leases to Hull City AFC and Hull FC would remain valid so they would continue playing at the stadium until their leases were renewed, so the answer is no. Hull City Council had no control over the day to day running of the stadium under Adam Pearson, that continued under Bartlett and is the same for Assem Allam. There may even be a clause in the lease which says Hull City AFC and Hull FC can play there for the duration, but that is me guessing.
You have absolutely nothing to apologise for. I always enjoy reading your posts and enjoy debating points with you. If you are apologising for what you said or the style of what you said, then God only knows how many Hail Mary's I would have to say!!
Then what is the security for the bank, in this case RBS, if the borrower couldn't pay back the loan he had taken out on the lease?
I was always confused about that, I assume it was secured against future SMC earnings(ie the Premier Club).
Tks I was wondering where the security came from. However having had dealing with RBS that seems a very flimsy security, someone must have had friends in high places to get that one passed them. EDIT, Just saw Mel's comment, obviously he did.
The bank could appoint a Law of Property Act Receiver. In reality what that means is the Receiver collects the rent from Hull City AFC and Hull FC and pays it directly to the bank. When the debt is paid the lease goes back to the SMC. The bank could try and sell the lease but its value would be determined by the amount of rent received and whether the clauses could be renegotiated. In this case that may be very difficult given the experience of Boothferry park. Without seeing the lease details I would say the bank would most likely appoint a Receiver to collect the rents and pay the mortgage. I've tried to make something complicated fairly straightforward to understand. Let me know if you have any more questions.
The SMC has never been profitable, there is not nearly enough security for that deal to be done under normal circumstances, I suspect that it only happened due to Bartlett's dodgy mate at RBS in Essex.
Tks for this, and OLM for his input. If I remember correctly in reality SMS have actually paid very little rent, a figure of £50k seems to come to mind during the 10 years SMC have leased the ground, as from memory it was based on what profits SMC made. This being the case, and one would assume the bank would want evidence what rent would be coming in, how could they lend the money they did, which on the face of it very little rent actually coming in?
