What happens if we get relegated?

[ictchris]

So we are 2-1 down after the first leg of the play off.  We have only won a handful of games by more than two goals this season.  There is a good chance we are going to be relegated into League One.

What will the consequences be of this happening?  I've heard people say that we will go into administration if we get relegated, I've heard people say that we will go part-time.  People even speculate that we might go out of business entirely if this happens.

I think at one of the fan Q&A events the chairman said they hadn't been planning for relegation but I'm sure they've also said in other communications that they are planning for this.  While we all know the people running the club are generally incompetent I cannot believe that they haven't considered what to do if this happens - we would likely close down our Youth Academy operations, make staff redundant and possibly go part-time, to a degree. Perhaps we could keep a core of full-time players and supplement the rest with part-timers and youth products.

As I understand it, companies go into administration if they are insolvent. Given our regular massive losses we probably fit that category but I don't know if it would be in the interest of the people who are writing the cheques to put us into adminstration.  Maybe it could be done to reduce costs (ie make everyone redundant) and then start from a new base.  I'm not sure our position with regards to creditors - do we owe money to the bank or the taxman?  If so, they might put us in admin and sell our assets for payment. 

Assuming the club continues, how do thing develop on the field?  I can't see Duncan Ferguson continuing if we go down - he has said many times he was here to keep us up, he failed and does he really want to compete in the third tier of Scottish football?  I don't think so.  I can only see us appointing someone from within - Scott Kellacher?  Ryan Esson?  Charlie Christie?  In terms of players, we have, I think, five players under contract.  I can see us offering some of the young players coming to the end of their deals one year contracts and trying to build that way.

The banter outcome is that we get relegated, win our Scottish Government appeal and get a £3m cash injection mid season.

[Yngwie]

41 minutes ago, ictchris said:

What will the consequences be of this happening?  I've heard people say that we will go into administration if we get relegated, I've heard people say that we will go part-time.  People even speculate that we might go out of business entirely if this happens.

Even if we stay up, those things are possibilities, but through cost cutting I think we’ d be able to survive and stay full-time in some form, but perhaps with a lower headcount on and off the pitch, and without a youth set up. 

The relegation scenario is considerably worse and I can’t bring myself to think about it.

[STFU]

As I understand it there is no bank debt.  I also assume there is nothing due to the taxman as league rules state that such a scenario would trigger a points deduction.

All money owed will be to directors and other private benefactors.  The chairman has a charge over club assets which include the battery farm so he's made sure to cover his own ass to an extent.

As is normally the case when those running a club make an arse if it the fans will be the ones expected to bail it out.  The problem there is that the club's stock with fans, local businesses and the community is at an all time low meaning there's not enough people motivated to do anything.

As Yngwie says these scenarios may happen even if we avoid relegation.  The 2022/23 accounts are due within the next 2 weeks and there's a growing feeling they have been delayed because they will show the club to have been insolvent for quite some time.

I have stated previously that there is a scenario whereby the chairman actually stands to gain if the club goes into administration and the battery storage is then approved.

I hope the Supporters Trust are geared up to take legal action if that does happen.

[Charles Bannerman]

I think that it’s very difficult to estimate what would happen if relegation took place because of the ongoing chronic lack of information. The last accounts we have seen are to the end of May 2022, almost two years ago, and even these are disappointingly lacking in detail; for instance they don’t even record turnover. In February, the board deployed an accounting technicality which allowed them to delay the accounts for the year to May 2023 by three months and that new deadline arrives at the end of this month - although even this latest set will still be a year out of date. The deadline for another AGM is July 24th but last time the deadline stated on the Articles of Association was ignored to the extent of four months. We know that, within the period of the accounts that should be imminent, the arm’s length concert company collapsed but, while local traders lost out, the club contrived to extract money out of that situation - at the cost of a great deal of local goodwill being lost. Of the battery farm, little has been heard since the Council pulled the plug. Meanwhile the ongoing perception is that the club is still losing money hand over fist and a group of wealthy individuals are continue to put their hands in their pockets to keep the administrator from the door - although details are unclear.

So at last we get to the added implications of possible relegation where I would imagine that further reduced income streams would need to be added to all the uncertainties listed above. Straws and camels’ backs? Certainly, the stated objective of solving the financial problems by returning to the Premiership would appear to be quite a distant one.

[lizi]

I really dislike this thread aiming against my beloved ICT.  Ok, it seems badly run, badly managed etc etc but whatever the future brings the diehard fans will remain.   I only wish I had the cash to help but, in the meantime, I’ll remain positive.   So - call me a happy clapper all you want, I’m not happy but I will always be a supporter, whatever division.  After all I’ve enjoyed the banter at all the Highland League grounds so, bring it on.   However, evening games at Dumfries not attractive at my age now!  

[STFU]

Went on to see when accounts were due for the battery storage and I see that the club have gone from being the sole shareholder to now only having 1%.  The three people listed below all now hold 33% each.

[lizi]

I have no idea what this means - anyone able to explain in common or garden language?  

[CaleyTennis85]

1) I'd imagine Scot Gardiner and Duncan Ferguson would be relieved of their duties and it's likely that Ryan Esson would come in as manager which I would totally back (now I'm not saying that I believe the gaffer needs sacked, it's just my thoughts on what will happen if the unthinkable happens which is very likely)

2) We'd have a team of youngsters in the playing squad maybe with some experience and loans too; in the hope that we bounce straight back up at the first time of asking.

[+snorbens_caleyman]

13 hours ago, STFU said:

I hope the Supporters Trust are geared up to take legal action if that does happen.

And you will be funding it....? 

[jags500]

I do agree there will be major changes if  the club get relegated, i also dont think Ferguson will hang around as he would be seen as to have failed in keeping us up, i also think we need a complete clear out of coaching staff to bring in fresh ideas ,these are the guys who are going along with  the current tactics, also more needs to be done to get our own home grown lads on the pitch.

[+MrCaleyjag]

Personally, while most of us are probably wondering about what will happen, al efforts should be focusing on tomorrow evening's game as as fans we have very little influence on what will happen.

Like everything we're just passengers, but there's one thing for sure, if the communication continues on the same vain as past days/months/years, we'll be told very little if anything at all until someone within the club decides that really enough is enough and changes that.

From my point of view, regardless of what happens, SG and DF have to go along with some others in prominent positions and the club operations need streamlined. I can't see why we need to be so top heavy. We also need to have a proper footballing strategy/plan in place as for the last 8-9 years we've been free-falling from one cliff to another without any real direction or plan hoping that something will change. It really doesn't matter what size of a club we are this should be standard.

I've never known a club to have so much off-field business disasters let alone allow the person guiding the club to remain in his position; in any other business that person would be gone. I can't believe that those who are digging into their own pockets are happy in any way doing this but just comes across like they are scared to make drastic changes.

As fans, no matter what guise the club sits in, we'll always be there to support them but unfortunately there's too many people currently that take that for granted.

[bdu98196]

10 hours ago, CaleyTennis85 said:

2) We'd have a team of youngsters in the playing squad maybe with some experience and loans too; in the hope that we bounce straight back up at the first time of asking.

Same youngsters that couldnt get game time at lower levels or did anything of note even at Highland league clubs. No chance they would be able to compete with a bunch of journeymen and cloggers at League One level unfortunately.

[The Mantis]

Let’s win this tie first, and worry about what shape the club is in afterwards. It may be part time football anyway, which I think would be disastrous, but let Hamilton worry about that. Because of their location, it suits them far more than it does us.

 

3 hours ago, jags500 said:

also more needs to be done to get our own home grown lads on the pitch.

We may have no choice anyway, whether it’s home-grown lads or poaching local talent from the HL or the likes of Elgin. 

The stark fact is, if we’re part time, we won’t get players to relocate here. Not to train two nights a week. The only way round that is to have a wealthy benefactor such as Uncle Roy or the Brora model where they are given ‘jobs’.

Stranraer are the nearest club to compare in this situation although it’s a pretty extreme case. Their players, or most of them, train in Glasgow, so the local connection, team bonding, etc, is lost. They have very poor crowds, c300, and tomorrow they could be relegated to the LL. They won’t recover from that and will have massive recruitment problems, ultimately ending up in the very poor SOSL or going amateur or folding. 

Would we attempt a similar setup with players training in Perth? Better to use Highlands-based players but IMHO the standard is not there compared to the days when we could get the likes of Iain Stewart or Brian Thomson.

 

[Robert]

17 hours ago, STFU said:

I have stated previously that there is a scenario whereby the chairman actually stands to gain if the club goes into administration and the battery storage is then approved.

I hope the Supporters Trust are geared up to take legal action if that does happen.

I’m with those who feel we should be focussing our efforts on supporting the players so they get the right result for us tomorrow and we stay in the Championship.

However, I’m curious as to what you feel the grounds are for legal action in the event of the scenario you have outlined. 

[IMMORTAL HOWDEN ENDER]

As Martin Luther-King once said to me on a Freedom March down West Drive - "Johndo, in the end, we will remember not the words of our enemies, but the silence of our friends."

ICT till I die, wherever, whoever and whatfeckinever

[+DoofersDad]

13 hours ago, lizi said:

I have no idea what this means - anyone able to explain in common or garden language?  

When ICT Battery Storage Ltd was set up in May 2022, it was set up with Ross Morrison and Allan Munro as the 2 Directors and with the club owning the single share with a nominal value of £1.  In other words, the battery storage company was wholly owned by the club.  This fact was actively promoted by the club when  the planning meetings were going on.   On 26th March the 2 Directors agreed to allot a further 99 £1 shares which appear to have allotted equally between the 2 Directors and David Cameron.  As I understand it, this would mean that, in effect, the 3 club Directors now own the Battery Company.

What I don't know are what the reasons are for this change or what the implications are.  It is, however, worth noting that in the Battery company accounts dated May 2023, there is a statement that the directors recognise the club as the "ultimate parent company".  Also, in the original Certificate of Incorporation, the club is identified as the "relevant legal entity".  It also states under a heading of "Nature of Control", that the relevant legal entity holds, either directly or indirectly, 75% or more of the shares in the company.  How this ties in with 99% of the shares now being owned by 3 of the club's directors, I don't know.  It would be good to get some clarification.

I am sure this is not as much clarification as you would like, Lizi, so hopefully someone else will be able to shed a bit more light on it.  Anyhow, regardless of what happens off the park, I, like you, will continue to support the team on the park regardless of which league they are playing in.

Thanks to STFU for drawing attention to this change.  Interesting!

[STFU]

1 hour ago, Robert said:

I’m with those who feel we should be focussing our efforts on supporting the players so they get the right result for us tomorrow and we stay in the Championship.

However, I’m curious as to what you feel the grounds are for legal action in the event of the scenario you have outlined. 

Directors putting in place measures to protect their own unsecured lending to the detriment of other creditors especially if an insolvency event is imminent and they can be shown to be aware of that.

[STFU]

Following on from @DoofersDad's post.  I hadn't considered the implications to the planning appeal.  The club not having ultimate control of the battery storage could have a detrimental impact on that given how hard we leaned on that fact from the outset.

Hopefully we've not shot ourselves in the face again.

 

[+snorbens_caleyman]

7 hours ago, jags500 said:

i also dont think Ferguson will hang around as he would be seen as to have failed in keeping us up

Yes, but..... who else would take him?  Abject failure at Forest Green, abject failure at Caley Thistle.  Maybe back to a coaching role, if his pride will let him.

[STFU]

Multiple thousands per week to manage in L1.  Not a chance he's walking away.

[LisleRightPeg]

1 hour ago, STFU said:

Multiple thousands per week to manage in L1.  Not a chance he's walking away.

Surely there is a clause in his contract that if we get relegated his services are no longer required 

[old caley girl]

14 minutes ago, LisleRightPeg said:

Surely there is a clause in his contract that if we get relegated his services are no longer required 

I'd be amazed if they've been that smart tbh? 

[CaleyCanary]

1 hour ago, LisleRightPeg said:

Surely there is a clause in his contract that if we get relegated his services are no longer required 

You’d like to think so but with our club administration history we’ve probably screwed up that clause too.

[bdu98196]

Dunc may work for the club but maybe he's not employed by the club

[STFU]

9 hours ago, bdu98196 said:

Dunc may work for the club but maybe he's not employed by the club

I'd imagine there are FFP/Money Laundering/Tax Avoidance rules and other regulations in place to prevent that or every club with a wealthy benefactor would be doing it.