A few thoughts on the current impasse regarding the Middlesbrough & Wycombe compensation claims and how this might be resolved.
Firstly, we need to understand that Quantuma does not believe that any prospective buyer would wish to inherit the risk of two legal cases, where they might have to pay out c£50m at some future time. We might all believe that the cases are frivolous and, indeed, Quantuma’s QC might, but the QCs for the other two clubs no doubt believe otherwise. What a judge might decide is an unknown quantity, so on this basis, I agree with the conclusion Quantuma has reached.
To overcome this, Quantuma proposes to effectively act as judge and jury on the two cases, by cramming them down to a very nominal amount, via a Restructuring Plan. Once the plan is approved by creditors (assuming it is), Middlesbrough and Wycombe are denied their day in court and their demands are defeated forever. Derby County FC continues to trade via a new limited company, with the old one being liquidated along with the unpaid portion of all debts.
The EFL has taken issue with this; in my opinion, reasonably. They are a members club to all intents and purposes and as such, they have to consider the position of all members. I think we all agree, that the basis of English Law is that it provides an opportunity for everyone to make their case to a court if they wish to. That’s part of being a true democracy. So in this case, why should Quantuma deny Middlesbrough & Wycombe that right and make a decision they're not qualified to make or morally entitled to make? The EFL has therefore said that IF Quantuma wishes to use a Restructuring Plan, then the 2 demands must be dealt with first - either by consensual agreement or a formal process.
So, what if Quantuma ignores the EFL? Well, the Restructuring Plan might still be voted through by creditors, but assuming that the EFL consider the demands of Middlesbrough & Wycombe to be ‘potential’ Football Creditors (& I understand that they have QC opinion to that effect) then they could refuse to transfer the Golden Share, on the basis that Middlesbrough & Wycombe have been denied the chance to ‘prove’ their claims in court. If that happens, we have a club, but one that is excluded from the EFL! Would the EFL really exclude us? My personal opinion is that they would back down, but as an alternative, they could impose further points penalties, or even an automatic relegation, as happened to Swindon some years ago.
The above paints a bleak picture, but we shouldn’t be too dismayed, because there is an alternative. Let’s go back to the beginning of this piece. What if prospective buyers were indemnified against the Middlesbrough & Wycombe demands? Well, to begin with, they could buy the club without risk. What’s more, Quantuma could then use a less destructive CVA to exit Administration, which means that the current limited company survives and the cases go to court at a future date - which would be months or even years away. They are then decided on merit. This feels like the most equitable way forward and the EFL has confirmed that it is agreeable to this option! So, what needs to change? It’s simple, the buyer needs an indemnity. Step forward, Mr. Morris. The root cause of this mess and the one person who could still solve it in an instant - by one stroke of his pen!
It doesn’t even stop there. Wycombe and Middlesbrough may well accept a consensual settlement at a modest level; if the cash can be found. So, how about Morris lowering his demands on the price of Pride Park Stadium, thus giving buyers additional cash to meet said consensual settlement?
None of this is rocket science. It simply identifies where the blame for all of this sits and suggests that there is a simple way out of this. It just needs one person to show some humility and save the club, he allegedly supports!