So how much debt do the 'new entity' have to cover to satisfy the RFU?

[Heathen]

I have been trying to figure out how much the new owners have to cover in terms of debt.

I read somewhere that the debt associated with the stadium was part of Ashley's deal.

The RFU talk about repaying 'rugby' related debt. this obviously includes money owed to players for various reasons - salaries, appearance rights ......

Where does the bond sit-  is that a total write off and the new entity have zero responsibility  for it?

Does anywhen have any insights as to how much the new entity was liable for, to satisfy the RFU?

[baldpaul101]

My understanding was that ALL debts were essentially written off by going into administration.
However to satisfy the RFU any Phoenix club proposal had to address "Rugby Creditors". the idea being that a club shouldn't be able to fold, write off its debts & then spring up as a new club debt free, like companies can do.
The was a list I think of creditors as an appendix on the Administrators report which listed local rugby related debts, like catering, PR, players image rights, that sort of thing. Can't remember the final amount but I seem to re-call it was 8-10 million? Happy to be corrected on that.
Not sure if Government covid loans fit within that or not, as obviously these were given to keep the club afloat so could be considered Rugby related?

So I guess that list would be a starting point for any club. Not sure whether those debts would expect to be paid in full or a percentage accepted. Also don't know whether there would be interest accruing on them?

Its this uncertainty which scared off Atlas I think & also why I assume the RFU insisted on a bond presumably covering the whole of the expected debt, even if it didn't all need to be paid

[Neils]

I have been trying to figure out how much the new owners have to cover in terms of debt.

I read somewhere that the debt associated with the stadium was part of Ashley's deal.

The RFU talk about repaying 'rugby' related debt. this obviously includes money owed to players for various reasons - salaries, appearance rights ......

Where does the bond sit-  is that a total write off and the new entity have zero responsibility  for it?

Does anywhen have any insights as to how much the new entity was liable for, to satisfy the RFU?

I think it is a case of don't even think about it! Wasps have agreed to pay it to the RFU's satisfaction so it should be ok.

I have seen figures bandied about for Wasps in the low millions (Worcester seems to be said to be about ?6m). It includes wages less any subsequent contract payments/agreements plus image rights (I think Brad had a fair chunk of that). Any other direct payment falling due to Wasps Mark 2 are beyond vague and we will likely never know.

The Bond falls into the Ashley purchased package completely and is nothing to do with the purchase of Wasps Rugby.

[Neils]

My understanding was that ALL debts were essentially written off by going into administration.
However to satisfy the RFU any Phoenix club proposal had to address "Rugby Creditors". the idea being that a club shouldn't be able to fold, write off its debts & then spring up as a new club debt free, like companies can do.
The was a list I think of creditors as an appendix on the Administrators report which listed local rugby related debts, like catering, PR, players image rights, that sort of thing. Can't remember the final amount but I seem to re-call it was 8-10 million? Happy to be corrected on that.
Not sure if Government covid loans fit within that or not, as obviously these were given to keep the club afloat so could be considered Rugby related?

So I guess that list would be a starting point for any club. Not sure whether those debts would expect to be paid in full or a percentage accepted. Also don't know whether there would be interest accruing on them?

Its this uncertainty which scared off Atlas I think & also why I assume the RFU insisted on a bond presumably covering the whole of the expected debt, even if it didn't all need to be paid

I think the Covid loans were on the Ground part certainly it was the Inland Revenue who pulled the plug to get their money owed so I assume DCMS is similar. The figures were shown in the Administrators Spreadsheet attached to his Report on the sale to Ashley.

[NellyWellyWaspy]

Let us say it was ?8m.

Most of that will be to pay out the remaining term on player's contracts, and any staff on fixed terms contracts, and staff wages for notice periods.

However, most will have mitigated those losses. Staff will have received the statutory compensation from the government. Many staff will have found another job/contract.

Each person will have to prove their claim and show deductions in mitigation. That then causes a problem, as the most expensive claims (the players) will be ongoing until each secures a contract extending past the point where their contract with old Wasps ended. So, for the players, many will receive interim payments, likely monthly.

The principal of mitigation is long held. It will apply to employees who were sacked one day (that fateful day) and got a job the next day. They would have mitigated their notice period losses in full, but not their back pay. Pudsie is one example of that.

Given that the players were likely on what, ?4m a year, and maybe had under a year to under 3 years left on their contracts, that could well be most of the ?8m. If most of them got contracts, that number could end up at just ?1m when the dust has settled.

This is what made me wonder at the Atlas decision. In their case, the sum would have been lower in the end.

[Heathen]

As I understand it, the bond debt went with the stadium, which Ashley bought.

Does that mean that he has no liabilty for it and the bondholders will not get a penny back?

[RogerE]

As I understand it, the bond debt went with the stadium, which Ashley bought.

Does that mean that he has no liabilty for it and the bondholders will not get a penny back?

That's right.

[Neils]

As I understand it, the bond debt went with the stadium, which Ashley bought.

Does that mean that he has no liabilty for it and the bondholders will not get a penny back?

Yup.

[Chins]

So how much money do we think Derek lost ?

[Vespula Vulgaris]

So how much money do we think Derek lost ?

Tens of millions, I'd say.

[WonkyWasp]

Obviously we know nothing of the whereabouts of Derek and family, nor should we.  Personally. I would like to thank  Derek and Dawn and their family for all that they have done for Wasps and I am so sorry that it has now turned out the way it has.  It must be heart-breaking for them.  Thank you for your support Derek, and in particular for the financial support. Understandably that had to end at some time.  To lose so much .....  words fail.  I hope that life will go well for you all.  From me and our family thank you  so much for standing up when we needed it. 

[andermt]

As I understand it, the bond debt went with the stadium, which Ashley bought.

Does that mean that he has no liabilty for it and the bondholders will not get a penny back?

Ashley has no liability.

However, the money raised from the sale of the stadium, the P-Share and the sale of the club will go into a pot and that will be used to pay pennies in the pound to creditors.
If the total debt was ?110M, and lets say the Rugby creditors are ?10M, then the money raised would go to pay back as much of the ?100M left as possible (minus the administrators hefty fee).
So Ashley paid ?17M, P-share was reported at ?9M, plus whatever the club sold for that would add upto approx ?25M. What should happen is all creditors should therefore get paid 25p in the pound, but know certain creditors get prioritised over others.

[Neils]

As I understand it, the bond debt went with the stadium, which Ashley bought.

Does that mean that he has no liabilty for it and the bondholders will not get a penny back?

Ashley has no liability.

However, the money raised from the sale of the stadium, the P-Share and the sale of the club will go into a pot and that will be used to pay pennies in the pound to creditors.
If the total debt was ?110M, and lets say the Rugby creditors are ?10M, then the money raised would go to pay back as much of the ?100M left as possible (minus the administrators hefty fee).
So Ashley paid ?17M, P-share was reported at ?9M, plus whatever the club sold for that would add upto approx ?25M. What should happen is all creditors should therefore get paid 25p in the pound, but know certain creditors get prioritised over others.

Any money due to the Governmernt (Tax) is treated as preferential. Not much left to split.

[andermt]

As I understand it, the bond debt went with the stadium, which Ashley bought.

Does that mean that he has no liabilty for it and the bondholders will not get a penny back?

Ashley has no liability.

However, the money raised from the sale of the stadium, the P-Share and the sale of the club will go into a pot and that will be used to pay pennies in the pound to creditors.
If the total debt was ?110M, and lets say the Rugby creditors are ?10M, then the money raised would go to pay back as much of the ?100M left as possible (minus the administrators hefty fee).
So Ashley paid ?17M, P-share was reported at ?9M, plus whatever the club sold for that would add upto approx ?25M. What should happen is all creditors should therefore get paid 25p in the pound, but know certain creditors get prioritised over others.

Any money due to the Governmernt (Tax) is treated as preferential. Not much left to split.

Exactly, Taxman is always 1st in the queue, hence my comment about prioritised creditors.
Not sure how much the Taxman was owed.

[Neils]

As I understand it, the bond debt went with the stadium, which Ashley bought.

Does that mean that he has no liabilty for it and the bondholders will not get a penny back?

Ashley has no liability.

However, the money raised from the sale of the stadium, the P-Share and the sale of the club will go into a pot and that will be used to pay pennies in the pound to creditors.
If the total debt was ?110M, and lets say the Rugby creditors are ?10M, then the money raised would go to pay back as much of the ?100M left as possible (minus the administrators hefty fee).
So Ashley paid ?17M, P-share was reported at ?9M, plus whatever the club sold for that would add upto approx ?25M. What should happen is all creditors should therefore get paid 25p in the pound, but know certain creditors get prioritised over others.

Any money due to the Governmernt (Tax) is treated as preferential. Not much left to split.

Exactly, Taxman is always 1st in the queue, hence my comment about prioritised creditors.
Not sure how much the Taxman was owed.

According to Documents ACL (note NOT we) owed ?5.1m to HMRC, ?12m to Sport England (not sure of their preferential status) and ?2.5m to Allied Irish Bank (again note sure of status). There were other big ones but that all falls into penny in the pound levels