Lord Bracknell
On fire
You need to factor in the price of the frame for the share certificate that I suspect most of the fans who want to pay £1 a pop will be interested in adding to their "investment".
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Dick Knight Share Dispute - Unnamed Director offer £0.01 per share
- Thread starter jamie the seagull
- Start date
symyjym
Banned
He was the only one with the charisma to connect with the fans and carry the club to the media. None of the other investors were prepared to physically get involved outside of meetings.
Whatever people may think of DK he is a born leader and he did a job that no one else could have taken on.
With regards to Bloom he was on the sidelines having family history with the club and waited for the right time to go all in. Great tactical timing on his part.
symyjym
Banned
Plus postage& packaging, ink and paper.
You're right, of course, that several fans who offered to buy shares, would only want 1 share and would be happy to write off the grand total of 75p in the scenario I outlined. However, 2 things:
1) DK has said that he has requests for 100k shares from 270 people. Thus, the average request is for £370, which for many fans would represent an investment they would not be too pleased to see diminish by 75%.
2) You haven't answered my question. Do you think the club have a duty of care to general members of the public to try to prevent them from buying shares that are worth 0-23p for £1?
I'm not suggesting that this is the club's motivation (I've outlined before that the club doesn't have to have any motive for us to have landed where we have), but the question is interesting.
Lord Bracknell
On fire
The shares haven't been offered to "general members of the public". They have been offered to Brighton & Hove Albion fans.
If we get into a debate about duty of care, I'd like to ask whether the Club have a duty of care to fans who might end up disappointed if they buy a ticket to an away game at Derby County, when the team has already lost twice to Derby earlier in the season.
I think the answer to my question is NO. That makes me think that the answer to yours is the same.
- Aug 8, 2005
- 27,223
Well actually that's not correct is it. They have been offered to anyone who was willing to part with £9.99 for his book. Not quite the same thing is it.
- Aug 8, 2005
- 27,223
If Dick Knight really cared about making sure fans held a proportion of shares, why did he not sell say 10% when he owned over half of it, instead of just asking everyone to dip into the £40 note fund or whatever he called it at the time. He promised names on seats then, which he was in no position to carry through with.
As I recall having made the promise when he first took over, he then went back on it saying it was too costly. Funny how now he thinks it's a good idea.
As I recall having made the promise when he first took over, he then went back on it saying it was too costly. Funny how now he thinks it's a good idea.
Tom Hark Preston Park
Will Post For Cash
- Jul 6, 2003
- 72,327
I think the club's attitude towards DK in this instance could probably be summed up as 'Right, you want to play silly buggers, we'll play silly buggers too'
B.W.
New member
- Jul 5, 2003
- 13,666
I agree LB. I'm distinctly unimpressed by the shareholder's/club's stance on this.
Buzzer
Languidly Clinical
- Oct 1, 2006
- 26,121
A couple of other points from DK's post above:
DK says that the share valuation shouldn't take too long because of a 'strong valuation guide has just been created by supporters willing to pay £1 each for 100,000 of my shares.'
He's completely mistaken here if he thinks Mazars will take the £1 offer from the 270 into account at all. The share price valuation to existing shareholders has to be made before taking any outside offers into account. That's only fair. This principle is an extremely important one and (in DK's words) protects the club from predatory swoops from outside investors.
DK bemoans the fact that he would have to pay 25% of the cost of the valuation. I'm struggling to see why he thinks it unfair to pay for something he is selling and to be honest 25% is incredibly generous to DK. I can't think why it shouldn't be 50:50.
DK also complains of the confidentiality clause the club want him to sign and says "one can understand why they want to keep this private – but an impossible task given that they are aware I need to keep share applicants (over 270 now) informed of developments."
Once again this simply isn't true. He has no legal requirement to keep any of the 270 people informed of anything. He was acting completely ultra vires by even offering the shares for sale to the 270 people expressing an interest. His duty was to inform the board before offering them to the world and he didn't do that.
What a mess.
DK says that the share valuation shouldn't take too long because of a 'strong valuation guide has just been created by supporters willing to pay £1 each for 100,000 of my shares.'
He's completely mistaken here if he thinks Mazars will take the £1 offer from the 270 into account at all. The share price valuation to existing shareholders has to be made before taking any outside offers into account. That's only fair. This principle is an extremely important one and (in DK's words) protects the club from predatory swoops from outside investors.
DK bemoans the fact that he would have to pay 25% of the cost of the valuation. I'm struggling to see why he thinks it unfair to pay for something he is selling and to be honest 25% is incredibly generous to DK. I can't think why it shouldn't be 50:50.
DK also complains of the confidentiality clause the club want him to sign and says "one can understand why they want to keep this private – but an impossible task given that they are aware I need to keep share applicants (over 270 now) informed of developments."
Once again this simply isn't true. He has no legal requirement to keep any of the 270 people informed of anything. He was acting completely ultra vires by even offering the shares for sale to the 270 people expressing an interest. His duty was to inform the board before offering them to the world and he didn't do that.
What a mess.
OK - that's fair enough. I could make an argument either way.
Let's be clear what the consequences are however. By normal valuation methods, the club's shares are worth between 0-23p. If the club does not owe its fans a financial duty of care, it could be argued to be complicit in permitting its Life President and previous Chairman to offload his shares for personal gain at at least 4x their true value if he sells them for £1. (That's obviously a Daily Mail type spin, but it would be hard to argue the interpretation).
The only way they can be clean in the process is to follow the Articles and get an independent valuation done - that way, they can point to the Auditors....
- Aug 8, 2005
- 27,223
That sums it up for me.
Only one person is in the wrong here, and it's Dick Knight. Everything that follows is of his own making.
I've been away from NSC all day, but I'm slightly nervous about this thread and some of the insinuations with it, having only taken a quick glance.
There seems to be an assumption made that the mystery willing buyer is a club director. It may be, of course, but it would also be any of the non-directors who own shares in the Albion, largely as a result of helping the Albion out with cold, hard cash in the years of need.
I have no idea if the willing buyer is a director or not, but if it's not and people have made accusations towards the board of directors based on the assumption that one of them is the mystery willing buyer then they could end up in a bad place.
There seems to be an assumption made that the mystery willing buyer is a club director. It may be, of course, but it would also be any of the non-directors who own shares in the Albion, largely as a result of helping the Albion out with cold, hard cash in the years of need.
I have no idea if the willing buyer is a director or not, but if it's not and people have made accusations towards the board of directors based on the assumption that one of them is the mystery willing buyer then they could end up in a bad place.
Tom Hark Preston Park
Will Post For Cash
- Jul 6, 2003
- 72,327
I think as owner of the board Bozza, then you are probably right to feel slightly nervous about the thread. A director/shareholder with malice aforethought could probably cause NSC - and by inference yourself- a serious bit of grief. At the same time, I'd expect any genuine Albion director/shareholder to take things no further than asking that a post be deleted or a disclaimer posted.
In the wider scheme of things, I have to say I find it reassuring to know that these machinations within the club are being scrutinised pretty closely in the public domain by posters with an obviously specialist subject knowledge. Given the fairly recent history of the club, I take that as a healthy sign. For sure, the reading might be uncomfortable for the club, and indeed for Dick Knight, but at least these things are being debated in public, in an adult open way.
[MENTION=6886]Bozza[/MENTION]
EDIT: That said - if you're uncomfortable about this thread - I'm out of it from now.
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Notwithstanding that I agree with the general sentiments regarding Mr Knight's attempt to create mischief I dont believe Mr Knight has breached the Articles of the Holding Company at all - if it is shares in this vehicle that are for sale and nor has he any obligation to engage with "the Board". In fact he seems to have followed the requirements of the articles to the letter.
I havent read his book but perhaps his errors of judgement were (a) not telling readers of the book that their purchase could be pre-empted by the existing shareholders or (b) perhaps even more importantly that the Directors (as opposed to the Company) can refuse to register a transfer of shares for any reason - even one that follows through with the pre-emption process (Clause 24 (i)) set out in the articles and can specifically refuse to register a transfer of shares if it is to more than four transferees.
Clause 24 (a) of the Articles of the HoldCo makes " the transfer" of shares subject to the pre-emption rights of other shareholders. It is only at the point of transfer that the terms of the pre-emption apply. There is no right of first offer under the articles and no obligation in the articles to consult with the Company prior to the point of informing the Company of the intention to transfer. There may be a non-public shareholders agreement that provides more bespoke obligations on a sales process (not always present in smaller companies) but there does not seem to be any restrictions in the articles in lining up a buyer or buyers before informing the Company.
Clearly there might be a non-public shareholders agreement that has additional rights and obligations but if not you could in fact argue that he has informed the company earlier than is necessary as he has I assume done so before he has arrived at a point with those parties willing to buy the shares where they are ready to sign a binding transfer document.
His obligation under 24 (b) is to inform the Company in writing of his intent to transfer and in his notice to indicate the value "he fixes as the fair value" per share. At this point control of the process passes to the Company and he agrees to be bound by this process - including that he cant stop the process. The Company has 28 days to see if any existing shareholder wants to buy at the transfer price and if not at what price. If there is a difference then the Companies auditors determine fair value. There are the usual provisions about what happens where sharholders wanti to take up some of their rights only and the balance of these rights passing to the other shareholders pro rata.
There doesnt seem to be anything in the articles that says who pays for the auditors fees (shoddy!) although Mr Knight might argue that Clause 27 of the Articles implies it is the Company who is responsible as it says "no fee will be charged..........relating to or affecting the title to any share" (although badly drafted I imagine this was intended for the administration of issuing a single share certificate only).
Once you kick this process off then you cannot revock the notice and if you do the Company can force the sale and can hold the proceeds from selling at the fair value determined by th auditors for the account of the person tranferring and register the shares in the name of the new owner who is willing to pay the value determined by the audtor. I assume Mr Knight has not given the notice?
I havent read his book but perhaps his errors of judgement were (a) not telling readers of the book that their purchase could be pre-empted by the existing shareholders or (b) perhaps even more importantly that the Directors (as opposed to the Company) can refuse to register a transfer of shares for any reason - even one that follows through with the pre-emption process (Clause 24 (i)) set out in the articles and can specifically refuse to register a transfer of shares if it is to more than four transferees.
Clause 24 (a) of the Articles of the HoldCo makes " the transfer" of shares subject to the pre-emption rights of other shareholders. It is only at the point of transfer that the terms of the pre-emption apply. There is no right of first offer under the articles and no obligation in the articles to consult with the Company prior to the point of informing the Company of the intention to transfer. There may be a non-public shareholders agreement that provides more bespoke obligations on a sales process (not always present in smaller companies) but there does not seem to be any restrictions in the articles in lining up a buyer or buyers before informing the Company.
Clearly there might be a non-public shareholders agreement that has additional rights and obligations but if not you could in fact argue that he has informed the company earlier than is necessary as he has I assume done so before he has arrived at a point with those parties willing to buy the shares where they are ready to sign a binding transfer document.
His obligation under 24 (b) is to inform the Company in writing of his intent to transfer and in his notice to indicate the value "he fixes as the fair value" per share. At this point control of the process passes to the Company and he agrees to be bound by this process - including that he cant stop the process. The Company has 28 days to see if any existing shareholder wants to buy at the transfer price and if not at what price. If there is a difference then the Companies auditors determine fair value. There are the usual provisions about what happens where sharholders wanti to take up some of their rights only and the balance of these rights passing to the other shareholders pro rata.
There doesnt seem to be anything in the articles that says who pays for the auditors fees (shoddy!) although Mr Knight might argue that Clause 27 of the Articles implies it is the Company who is responsible as it says "no fee will be charged..........relating to or affecting the title to any share" (although badly drafted I imagine this was intended for the administration of issuing a single share certificate only).
Once you kick this process off then you cannot revock the notice and if you do the Company can force the sale and can hold the proceeds from selling at the fair value determined by th auditors for the account of the person tranferring and register the shares in the name of the new owner who is willing to pay the value determined by the audtor. I assume Mr Knight has not given the notice?
You had better shut NSC down I reckon.
Sounds like you ****ed up Dick.
The fans are lucky with how TB has been running the club, and I don't see how DK selling his shares to so many supporters would be helpful. I am surprised the club didn't just offer him the £100k though.
Perhaps you should change the thread title.
Seagull on the wing
New member
Dick didn't ask fans to buy at £1 a share....he asked for a 'statement of intent' if he put them up for sale. The way out of this is to offer the 270 one share apiece to frame on the wall.The rest go to the best offer from the Board. That way,fans would be happy,the club does not lose anything and Dick gets the value of his shares. Hate to see this happening to a club where I have spent thousands in money and time,spent time at marches,inquiries,political rallies. We finally get to a stadium we can call home and what do we get...bickering in the boardroom.
Grow up,sort it out,negotiate.
Grow up,sort it out,negotiate.