The Loan notes and future dilution

[MajorR]

Thanks Ux and Chief.

The reason for the clarification was the comment on Tuesday's joint announcement about working together etc. I acknowledge that there was the threat of a court case but I would still be wary of the undercurrent of secrecy that has been there from day 1

They have less incentive than ever to do anything than smile to their faces, tell them nothing and just call them 'w**kers' when they leave the room. I've seen it so often. Stoke their sense of importance to their face, tell them how vital they are, get them to help your PR and laugh at them behind their back as the brainless easily manipulated spineless turds that they are.

I thought I'd be over this today. I'm normally good with things that can't be changed, but I just seem to be getting more annoyed about it.

I’m raging too, I just feel it’s an absolute betrayal.

 

[crazedbison]

I am just a bit curious. Is there any reason to suspect that all £13m must be converted at the same time or at all?

Meaning, could Silverstein convert his £5m and the remaining £8m remain as the interest bearing loans?

It seems to me it could. If so, those not initially loaning (converting or not) stand to be diluted (obviously the trust), but I’m far from an expert here.

Additionally, am I correct in understanding that the Trust was purposefully left out of the above mentioned loans? If so, I would imagine that this would have potentially brought up a whole new cause for litigation.

 

[Cinio Dydd Sul]

I am just a bit curious. Is there any reason to suspect that all £13m must be converted at the same time or at all?

Meaning, could Silverstein convert his £5m and the remaining £8m remain as the interest bearing loans?

It seems to me it could. If so, those not initially loaning (converting or not) stand to be diluted (obviously the trust), but I’m far from an expert here.

Additionally, am I correct in understanding that the Trust was purposefully left out of the above mentioned loans? If so, I would imagine that this would have potentially brought up a whole new cause for litigation.

If Levien and whoever else loaned in didn't convert they would get diluted too. As Levein matched Silverstein if he converted he wouldn't be diluted at all I believe.

The trust must have purposefully been left out of the loan I doubt it was an oversight, because they did go the trouble of telling the trust that the loans were going to loaned in.

However I don't believe there's any legal obligation for the trust to be offered the chance to loan in, however when or if they go to convert, the trust (and all other shareholders) would then legally have to be given the opportunity to 'invest' to avoid dilution.

 

[crazedbison]

I am just a bit curious. Is there any reason to suspect that all £13m must be converted at the same time or at all?

Meaning, could Silverstein convert his £5m and the remaining £8m remain as the interest bearing loans?

It seems to me it could. If so, those not initially loaning (converting or not) stand to be diluted (obviously the trust), but I’m far from an expert here.

Additionally, am I correct in understanding that the Trust was purposefully left out of the above mentioned loans? If so, I would imagine that this would have potentially brought up a whole new cause for litigation.

If Levien and whoever else loaned in didn't convert they would get diluted too. As Levein matched Silverstein if he converted he wouldn't be diluted at all I believe.

The trust must have purposefully been left out of the loan I doubt it was an oversight, because they did go the trouble of telling the trust that the loans were going to loaned in.

However I don't believe there's any legal obligation for the trust to be offered the chance to loan in, however when or if they go to convert, the trust (and all other shareholders) would then legally have to be given the opportunity to 'invest' to avoid dilution.

Thanks for this. I do not doubt your accuracy, just asking for some clarification.

If I’m thinking about it as organizations and not people, “American 61% Consortium” (Levien, et al) and Stormlight Elyrch (Silverstein Family Trust) each stumped in £5m convertible loans to the club. These loans allowed the right to convert to shares but didn’t require it. The remaining shareholders, aside from the trust, stumped in £3m in a similar manner. The only reason non-majority owners like MM, HJ, etc and non-owners (Silverstein) were able to loan in exchange for convertible notes was because the club board, led by the majority owners signed off on it. If the other owners, namely the trust, wished to participate they were excluded. Correct so far?

What I do not understand is how this can not run afoul of some sort of rule or law as this would mean that any majority owner of any legal entity could just water down any other minority owner into oblivion whenever they chose. Meaning minority ownership of any business or organization would be worthless.

There absolutely must be more to this story.

 

[Uxy]

The Trust could have participated I expect. Obviously didn't have the funds to do so, even if wanted to.

 

[crazedbison]

The Trust could have participated I expect. Obviously didn't have the funds to do so, even if wanted to.

That was my assumption. However was there no attempt to seek out funding? Plea to membership or a loan itself?

 

[Uxy]

The Trust could have participated I expect. Obviously didn't have the funds to do so, even if wanted to.

That was my assumption. However was there no attempt to seek out funding? Plea to membership or a loan itself?

I don't think a plea to the membership during a pandemic when households were stretched, to raise upwards of £2m was appropriate. I'm not sure borrowing money, given how funds were committed to a certain other task, was appropriate either.

Edit - Just to add to that, the vote for legal action was pretty clear that, if successful, it would likely mean the Trust would sell its stake. As such, borrowing millions to protect that stake would seem to be counterintuitive.

Not against the idea in principle, and may well make sense in the future now that legal action is not being pursued.

 

[crazedbison]

That was my assumption. However was there no attempt to seek out funding? Plea to membership or a loan itself?

I don't think a plea to the membership during a pandemic when households were stretched, to raise upwards of £2m was appropriate. I'm not sure borrowing money, given how funds were committed to a certain other task, was appropriate either.

Edit - Just to add to that, the vote for legal action was pretty clear that, if successful, it would likely mean the Trust would sell its stake. As such, borrowing millions to protect that stake would seem to be counterintuitive.

Not against the idea in principle, and may well make sense in the future now that legal action is not being pursued.

I’m right there with you. This all makes sense. I definitely agree that it would now make sense to try to devise a way to “loan in” the amount. However, alternatively, I think few would trust the current board to figure this out or act in the trust’s best interest.

 

[Cinio Dydd Sul]

If Levien and whoever else loaned in didn't convert they would get diluted too. As Levein matched Silverstein if he converted he wouldn't be diluted at all I believe.

The trust must have purposefully been left out of the loan I doubt it was an oversight, because they did go the trouble of telling the trust that the loans were going to loaned in.

However I don't believe there's any legal obligation for the trust to be offered the chance to loan in, however when or if they go to convert, the trust (and all other shareholders) would then legally have to be given the opportunity to 'invest' to avoid dilution.

Thanks for this. I do not doubt your accuracy, just asking for some clarification.

If I’m thinking about it as organizations and not people, “American 61% Consortium” (Levien, et al) and Stormlight Elyrch (Silverstein Family Trust) each stumped in £5m convertible loans to the club. These loans allowed the right to convert to shares but didn’t require it. The remaining shareholders, aside from the trust, stumped in £3m in a similar manner. The only reason non-majority owners like MM, HJ, etc and non-owners (Silverstein) were able to loan in exchange for convertible notes was because the club board, led by the majority owners signed off on it. If the other owners, namely the trust, wished to participate they were excluded. Correct so far?

What I do not understand is how this can not run afoul of some sort of rule or law as this would mean that any majority owner of any legal entity could just water down any other minority owner into oblivion whenever they chose. Meaning minority ownership of any business or organization would be worthless.

There absolutely must be more to this story.

Well they can loan whenever they want and invite in who they want to do so. Only when the conversion happens must they invite all shareholders to contribute.

It isn't in their interest to do so mind you, if the trust did somehow stump up some money Silverstein wouldn't get as large a percent as he's currently stood to get.