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Supporters Trust--Share compensation consultation.

I had an email from the Trust this afternoon confirming that the members consultation paoers on possible litigation are being sent out to members this week.
Jackareme
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Comments

  • Me too. It's going to be interesting to see what happens. Six months ago I think it would have been a foregoing conclusion that Trust members would vote for legal action against the shareholders. Today, with Birch playing a blinder, I am not so sure.

    The courts could declare the contentious share sale null and void and order Jenkins et al to buy their shares back from the US consortium, at the original sale price, but I believe the most likely outcome of legal action would be for the courts to order the shareholders - the 70% US consortium and the 8% legacy shareholders - to buy a percentage of the Trust's share holdings at the original sale price of £1m per share. I have heard that that percentage could be 7% of the 22% the Trust currently holds, although I am not sure where that figure comes from. So the US consortium would need to find c£6.2m and Jenkis et al c£800k to but massively over-valued shares off the Trust. 

    I am sure we would all find that to be poetic justice and be glad the Trust has a £7m fund against future rainy days, but does anyone think that, with the transfer window still open, the owners would prefer to pass up on a dividend for yet another year when they are faced with such a huge potential hit to their pockets?
  • Cadleigh said:
    Me too. It's going to be interesting to see what happens. Six months ago I think it would have been a foregoing conclusion that Trust members would vote for legal action against the shareholders. Today, with Birch playing a blinder, I am not so sure.

    The courts could declare the contentious share sale null and void and order Jenkins et al to buy their shares back from the US consortium, at the original sale price, but I believe the most likely outcome of legal action would be for the courts to order the shareholders - the 70% US consortium and the 8% legacy shareholders - to buy a percentage of the Trust's share holdings at the original sale price of £1m per share. I have heard that that percentage could be 7% of the 22% the Trust currently holds, although I am not sure where that figure comes from. So the US consortium would need to find c£6.2m and Jenkis et al c£800k to but massively over-valued shares off the Trust. 

    I am sure we would all find that to be poetic justice and be glad the Trust has a £7m fund against future rainy days, but does anyone think that, with the transfer window still open, the owners would prefer to pass up on a dividend for yet another year when they are faced with such a huge potential hit to their pockets?

    Might I suggest that the 7% you have been told is completely wrong - it's consistently been estimated as 21% in the past -  and that we should just wait a couple of days for the definitive documentation from the Trust.
  • Jeff - why would the Trust want to sell its entire shareholding (or all but 1%)? At 15% it would still be a major shareholder with £7m in the bank as a fighting fund and every right to retain a seat on the board. At 1% it would have very little influence surely? This is the old Ponty proposal, which I never agreed with.


  • Cadleigh said:
    Jeff - why would the Trust want to sell its entire shareholding (or all but 1%)? At 15% it would still be a major shareholder with £7m in the bank as a fighting fund and every right to retain a seat on the board. At 1% it would have very little influence surely? This is the old Ponty proposal, which I never agreed with.


    Thats the way the court will work, if the trust take on the owners and previous owners for unfair prejudice then the only outcome (if the case is proven) is for the owners and previous owners to purchase all the trusts shares at the 2016 valuation.
    I'm genuinely worried that court action will set the club back years and once the owners own 100% it can do exactly what it wants, ie take £21m out of the club to pay the trust off.
    Can't wait to read the consultation paper, this is a major decision. Court cases are never a fore gone conclusion.
  • edited July 9
    @jollyboy They won’t be able to take out £21m in dividends as the company hasn’t made enough profits to allow them to do so.

    If they did want to try and do that, first they would need to take out an extra £5m to pay a dividend to the trust, and whomsoever on the board approved the dividend payment would end up in court as breaching their fudiciary duty as directors, end up in jail, be banned from being a director of any company and probably held personally liable for the losses.
  • jollyboy said:
    Cadleigh said:
    Jeff - why would the Trust want to sell its entire shareholding (or all but 1%)? At 15% it would still be a major shareholder with £7m in the bank as a fighting fund and every right to retain a seat on the board. At 1% it would have very little influence surely? This is the old Ponty proposal, which I never agreed with.


    Thats the way the court will work, if the trust take on the owners and previous owners for unfair prejudice then the only outcome (if the case is proven) is for the owners and previous owners to purchase all the trusts shares at the 2016 valuation.
    I'm genuinely worried that court action will set the club back years and once the owners own 100% it can do exactly what it wants, ie take £21m out of the club to pay the trust off.
    Can't wait to read the consultation paper, this is a major decision. Court cases are never a fore gone conclusion.
    Surely there are a number of remedies available to the court if they find in the Trust’s favour?
    - order the old shareholders to buy back their shares and restore the status quo ante
    - order the non-Trust shareholders to buy a portion of the Trust’s shares at the sale value
    - order them to buy all the Trust’s shares

    I guess it depends on whether the Trust complains that it was denied the chance to participate in the share sale as a buyer and get its shareholding over 25%, in which case the court could presumably order the other shareholders to offer up part of their shareholding at the sale price, which would be a problem because we (the Trust) don’t have that kind of money, OR complains it was denied a chance to participate as a seller, in which cases options B and C kick in?
  • Cadleigh said:
    jollyboy said:
    Cadleigh said:
    Jeff - why would the Trust want to sell its entire shareholding (or all but 1%)? At 15% it would still be a major shareholder with £7m in the bank as a fighting fund and every right to retain a seat on the board. At 1% it would have very little influence surely? This is the old Ponty proposal, which I never agreed with.


    Thats the way the court will work, if the trust take on the owners and previous owners for unfair prejudice then the only outcome (if the case is proven) is for the owners and previous owners to purchase all the trusts shares at the 2016 valuation.
    I'm genuinely worried that court action will set the club back years and once the owners own 100% it can do exactly what it wants, ie take £21m out of the club to pay the trust off.
    Can't wait to read the consultation paper, this is a major decision. Court cases are never a fore gone conclusion.
    Surely there are a number of remedies available to the court if they find in the Trust’s favour?
    - order the old shareholders to buy back their shares and restore the status quo ante
    - order the non-Trust shareholders to buy a portion of the Trust’s shares at the sale value
    - order them to buy all the Trust’s shares

    I guess it depends on whether the Trust complains that it was denied the chance to participate in the share sale as a buyer and get its shareholding over 25%, in which case the court could presumably order the other shareholders to offer up part of their shareholding at the sale price, which would be a problem because we (the Trust) don’t have that kind of money, OR complains it was denied a chance to participate as a seller, in which cases options B and C kick in?
    The Trust is going for unfair prejudice, shares in 2016 were worth £1.1m each, at a guess they are worth £250k now. so by holding out, the sellers and buyers have cost the trust a lot of money.

    4 key things for me,
    Why did the sellers ignore the original shareholders agreement?
    Why did Jenkins sign a pre-sale agreement in December 2015 only telling the Trust in March 2016?
    Why did Levien inform a fans forum that he was told by the sellers not to engage with the trust?
    Why did HJ hold a fictitious meeting in July 2016 which was key to the sale, minutes of which were logged at companies house?

    Bang to rights you would think but the law is an ass no one can say which side a judge will see it and the only real winners are the lawyers, the loser is Swansea City because this will have a detrimental effect on OUR football club for years to come, the owners will own 100% and can do as it wishes to purchase the trusts shares.
    Jackareme
  • Having very carefully read through the options paper tonight, and (out of respect for the confidentiality of the information) without going into great detail, the only viable option is legal action. That will certainly be my vote. 

    To do nothing carries far more risk.

    It's a no-brainer for me.
    bigoak
  • Having very carefully read through the options paper tonight, and (out of respect for the confidentiality of the information) without going into great detail, the only viable option is legal action. That will certainly be my vote. 

    To do nothing carries far more risk.

    It's a no-brainer for me.
    Same here Gary .
    bigoak
  • moorlands said:
    Having very carefully read through the options paper tonight, and (out of respect for the confidentiality of the information) without going into great detail, the only viable option is legal action. That will certainly be my vote. 

    To do nothing carries far more risk.

    It's a no-brainer for me.
    Same here Gary .
    Me too
  • Gary - with respect you were always going to vote for legal action whatever the paperwork said.
  • Cadleigh said:
    Gary - with respect you were always going to vote for legal action whatever the paperwork said.
    Why do you say that Cadleigh?
  • Agreed with above @Jeff_Cowbridge , @cimlajack ; etc. Definitely legal action. Anything lees would be utter capitulation.
    Voted and posted.

  • Cadleigh said:
    Gary - with respect you were always going to vote for legal action whatever the paperwork said.
    Why do you say that Cadleigh?
    Because you hate the non-Trust shareholders with a vengeance and would do anything that hurt them whatever the impact
  • Also voted for legal action ???? 
  • Also voted for legal action ! Can’t sit back and do nothing 
  • Any legal action taken would be subject to the trust boad being satisfied that acceptable arrangements are in place? 

    Am I LED TO BELIVE THAT IF THE BOARD DONT GET THIS , THEN NO ACTION WILL TAKE PLACE? 
  • konnar said:
    Any legal action taken would be subject to the trust boad being satisfied that acceptable arrangements are in place? 

    Am I LED TO BELIVE THAT IF THE BOARD DONT GET THIS , THEN NO ACTION WILL TAKE PLACE? 
    I assume that means that they will not put the Trust at serious financial risk and that insurances and such like are in place to cover. (Correct me if I am wrong).

  • Option 1-Pursue Legal Action

    The Trust membership authorises the Trust Board to commence legal proceedings in relation to the 2016 sale and related matters.
    Any legal action taken would be subject to the Trust board being satisfied that acceptable arrangements are in place to ensure the Trust is able to finance the costs of litigation and protect itself adequately against the risk of liability for the opponents costs
  • In a nutshell, what is the legal action being proposed (I am abroad for another week so won’t get my papers til I get home)? 
  • It’s confidential stuff Cadleigh and we shouldn’t divulge it here, so sounds like you’ll have to wait.
    Keith
  • It’s confidential stuff Cadleigh and we shouldn’t divulge it here, so sounds like you’ll have to wait.
    OK Jeff. How many Trust members are there again who have received these letters? I get that if a letter is sent under legal privilege to one client, confidentiality is preserved, but does anyone think that the shareholders don’t already know everything that’s in this communication with Trust members? Hell, all they need to have done is joined as an individual member.

    I guess I will wait until I get home, or watch the information being shared in small bites on here, while those of you fortunate enough to have seen the contents continue to talk in mysterious ‘I have secret information’ tones 
  •   Colin_swansea said:

    Option 1-Pursue Legal Action

    Any legal action taken would be subject to the Trust board being satisfied that acceptable arrangements are in place 

    Are they in place ? 

  • Its wrong for the Trust to say they have a strong case, they have a strong case in their opinion, the Americans sought assurances that there was no original shareholders agreement in place, which they got from Jenkins et al. Now I think they are silly spending £70m on a club and not doing proper due diligence but that's not illegal, this will run and run, I will not rush this and read the consultation again as I can only see one big loser, Swansea City
  • Cadleigh said:
    Cadleigh said:
    Gary - with respect you were always going to vote for legal action whatever the paperwork said.
    Why do you say that Cadleigh?
    Because you hate the non-Trust shareholders with a vengeance and would do anything that hurt them whatever the impact
    True, I have no time for the majority shareholders, but had the Trust outlined serious risk or potential negative impact on themselves in the 'cons' column, I would have not been able to vote in favour. I'm a big fan of the Trust and what they do. Anything that would compromise them I would not be in favour of. 

    There is of course risk in either option, but the negative consequences of doing nothing far outweigh the negatives of pursuing action.

    Maybe when you get home and have a read for yourself you will understand what I'm saying.
    Natterjack
  • Cadleigh said:
    Cadleigh said:
    Gary - with respect you were always going to vote for legal action whatever the paperwork said.
    Why do you say that Cadleigh?
    Because you hate the non-Trust shareholders with a vengeance and would do anything that hurt them whatever the impact
    True, I have no time for the majority shareholders, but had the Trust outlined serious risk or potential negative impact on themselves in the 'cons' column, I would have not been able to vote in favour. I'm a big fan of the Trust and what they do. Anything that would compromise them I would not be in favour of. 

    There is of course risk in either option, but the negative consequences of doing nothing far outweigh the negatives of pursuing action.

    Maybe when you get home and have a read for yourself you will understand what I'm saying.
    When’s the deadline for returning the forms?

    i will most likely vote in favour of the Trust’s recommendations as I have faith in their motives and their competence. I am just not sure about the timing of legal action right now when the season is about to start and Birch seems to be doing a good job for us (although I am not suggesting he is The Chosen One)
  • konnar said:
      Colin_swansea said:

    Option 1-Pursue Legal Action

    Any legal action taken would be subject to the Trust board being satisfied that acceptable arrangements are in place 

    Are they in place ? 

    Confidential stuff, best to read the document and make your own mind up

  • When’s the deadline for returning the forms? No later then 27th july 
    Cadleigh
  • the americans made the sellers indemnify the shareholders agreement.

    therefore if they loose, they get the money back of Jenkins et al.

    also the value the Trust would get if they win is the original selling price not the value now.
    BigG
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