jaf Posted March 8, 2022 Report Share Posted March 8, 2022 (edited) 8 hours ago, javeajag said: Due Diligence is just mechanism for gathering information …..should the Jags Foundation know the financial situation of the club and any obligations that come with ownership ? Yes of course. The mechanism for getting that information you can call what you like but what information do we want that is not already known to the directors of the club , I’d be astonished if it’s anything at all. but to be constructive let’s start compiling our own due diligence information gathering …. 1. Has there been a loan from 3BC to the club 2. If yes, what are the terms of that loan 3. is there a monthly operating deficit 4. what is 3BCs relationship with the club after the share transfer 5. Who was involved in appointing Gary Caldwell 6. What is the ‘big announcement’ that’s been hinted at and how does that affect the club 7. Has the club any debts 8 Has the club any unstated liabilities etc etc feel free to add yours in , it can be sent to the Jags Foundation to answer I have already emailed them last week on behalf of a few financially literate fans. We await a response. Edited March 8, 2022 by jaf 1 Quote Link to comment Share on other sites More sharing options...
javeajag Posted March 8, 2022 Author Report Share Posted March 8, 2022 2 hours ago, sandy said: Now I know he was a crap manager, but what had Caldwell to do with the transfer of club ownership? ! Just checking you read it ! Quote Link to comment Share on other sites More sharing options...
javeajag Posted March 8, 2022 Author Report Share Posted March 8, 2022 2 hours ago, jaf said: I have already emailed them last week on behalf of a few financially literate fans. We await a response. Good Quote Link to comment Share on other sites More sharing options...
javeajag Posted March 8, 2022 Author Report Share Posted March 8, 2022 2 hours ago, jaf said: It’s not about “pulling a fast one “ tjf need to stand up and say what fan ownership will mean to get sign ups ; they need to sell the benefits to potential members What fan ownership means depends on the current financial position if they get it wrong, fan ownership will have been sold on a false prospectus. I thought you of all people knew the dangers of NOT doing due diligence I’ve said many times Tjf should understand what they are taking over but the areas of concern are not really that great Quote Link to comment Share on other sites More sharing options...
jaf Posted March 8, 2022 Report Share Posted March 8, 2022 4 minutes ago, javeajag said: I’ve said many times Tjf should understand what they are taking over but the areas of concern are not really that great If taking a conventional approach to commercial risk, for shareholder gain, I would largely agree with you. And this is one of the arguments against due diligence that some put forward. However, I would suggest TJF have a different set of risk considerations to satisfy themselves of to discharge their duty to their members who have a different set of drivers to a commercial purchaser. And in a nutshell, that is why I am no longer on TJF board. Quote Link to comment Share on other sites More sharing options...
Norgethistle Posted March 8, 2022 Report Share Posted March 8, 2022 9 minutes ago, javeajag said: I’ve said many times Tjf should understand what they are taking over but the areas of concern are not really that great How do you or TJF or more importantly it’s members the fans know the areas of concern “are not really that great” without proper due diligence being done. If we’ve had to be propped up to the tune of £500k on a turnover of £1.5m I’d say that’s a concern as it’s a more than a 30% trading loss Quote Link to comment Share on other sites More sharing options...
javeajag Posted March 8, 2022 Author Report Share Posted March 8, 2022 5 minutes ago, Norgethistle said: How do you or TJF or more importantly it’s members the fans know the areas of concern “are not really that great” without proper due diligence being done. If we’ve had to be propped up to the tune of £500k on a turnover of £1.5m I’d say that’s a concern as it’s a more than a 30% trading loss You make my point the issue you raise is one of about 2 or 3 that have been raised …..and the key was if Quote Link to comment Share on other sites More sharing options...
Norgethistle Posted March 8, 2022 Report Share Posted March 8, 2022 1 minute ago, javeajag said: You make my point the issue you raise is one of about 2 or 3 that have been raised …..and the key was if Due diligence puts this to bed, so have it done. If not it grows and the process stalls Quote Link to comment Share on other sites More sharing options...
javeajag Posted March 8, 2022 Author Report Share Posted March 8, 2022 20 minutes ago, Norgethistle said: Due diligence puts this to bed, so have it done. If not it grows and the process stalls Fine by me Quote Link to comment Share on other sites More sharing options...
jaf Posted March 9, 2022 Report Share Posted March 9, 2022 (edited) 7 hours ago, javeajag said: You make my point the issue you raise is one of about 2 or 3 that have been raised …..and the key was if I am sorry this shows a complete misunderstanding of due diligence as someone who does it regularly, you are right I always sit down and discuss the target with my instructing party and say are there any particular areas of concern so those can be specifically addressed. That seems to be what you think is the limit of due diligence - what can be expected to be known by people outside the business. (I know that some on the TJF board share that misunderstanding). in the last two years I have done 7 large due diligence exercises. In all seven things were found which the instructing party knew nothing about. All of these impacted the deal in one case to extent deal did not proceed, but in the other cases to have changes made to the Legal’s or the price. We have a different risk profile to a commercial purchase but we still deserve that level of comfort assurance and knowledge. Some of the issues uncovered included a company having under declared paye by £500k, in two cases companies using vat schemes they were not entitled to, a furlough fraud, a loan fraud (ie proceeds used for reasons other than those permitted), and various other things. None of these were “areas of concern” by the instructing party. The directors of the selling companies did not even realise some of these things! How could you or a fan know about any of these to know what the areas of concern might be. This is why people pay for due diligence after all. I am NOT saying any of these exist in Partick thistle. How can I? But equally how can TJF say whether they (or other issues) exist or do not? Edited March 9, 2022 by jaf 1 Quote Link to comment Share on other sites More sharing options...
Jaggernaut Posted March 9, 2022 Report Share Posted March 9, 2022 7 minutes ago, jaf said: I am sorry this shows a complete misunderstanding of due diligence as someone who does it regularly, you are right I always sit down and discuss the target with my instructing party and say are there any particular areas of concern so those can be specifically addressed. That seems to be what you think is the limit of due diligence - what can be expected to be known by people outside the business. (I know that some on the TJF board share that misunderstanding). in the last two years I have done 7 large due diligence exercises. In all seven things were found which the instructing party knew nothing about. All of these impacted the deal in one case to extent deal did not proceed, but in the other cases to have changes made to the Legal’s or the price. We have a different risk profile to a commercial purchase but we still deserve that level of comfort assurance and knowledge. Some of the issues uncovered included a company having under declared paye by £500k, in two cases companies using vat schemes they were not entitled to, a furlough fraud, a loan fraud (ie proceeds used for reasons other than those permitted), and various other things. None of these were “areas of concern” by the instructing party. The directors of the selling companies did not even realise some of these things! How could you or a fan know about any of these to know what the areas of concern might be. This is why people pay for due diligence after all. I am NOT saying any of these exist in Partick thistle. How can I? But equally how can TJF say whether they (or other issues) exist or do not? Excuse my ignorance, but are those "large due diligence excercises" that you mention the same thing as an external audit? If not, could you briefly explain the difference? Thanks! Quote Link to comment Share on other sites More sharing options...
jaf Posted March 9, 2022 Report Share Posted March 9, 2022 (edited) 11 minutes ago, Jaggernaut said: Excuse my ignorance, but are those "large due diligence excercises" that you mention the same thing as an external audit? If not, could you briefly explain the difference? Thanks! No. I do both. I do around 60 audits a year too. Both have very different approaches. AUdit is a regulated statutory process with strict and fairly narrow requirements. It occurs annually and is only done to companies over a certain size. Due diligence can occur any time, is not subject to a set of standards as audit is, and consequently the starting point is a blank sheet of paper rathe than endless checklists. The final difference of course is audit is carried out on the instruction of the directors for the benefit of the shareholders of the company (two groups with pre existing knowledge of the company) whilst due diligence is instructed by a potential transferee of the shares prior to concluding the legal process either to confirm / know what they are getting for sure or to allow for changes to legal documents based on issues unconverted, or to reprice deal. The final difference i suppose is audit is permitted to rely on management representations in certain areas of the audit. No such concept exists in due diligence work. The Partick thistle accounts are subject to audit. So were some of the ones in the examples I have given. Edited March 9, 2022 by jaf Quote Link to comment Share on other sites More sharing options...
Jaggernaut Posted March 9, 2022 Report Share Posted March 9, 2022 24 minutes ago, jaf said: No. I do both. I do around 60 audits a year too. Both have very different approaches. AUdit is a regulated statutory process with strict and fairly narrow requirements. It occurs annually and is only done to companies over a certain size. Due diligence can occur any time, is not subject to a set of standards as audit is, and consequently the starting point is a blank sheet of paper rathe than endless checklists. The final difference of course is audit is carried out on the instruction of the directors for the benefit of the shareholders of the company (two groups with pre existing knowledge of the company) whilst due diligence is instructed by a potential transferee of the shares prior to concluding the legal process either to confirm / know what they are getting for sure or to allow for changes to legal documents based on issues unconverted, or to reprice deal. The final difference i suppose is audit is permitted to rely on management representations in certain areas of the audit. No such concept exists in due diligence work. The Partick thistle accounts are subject to audit. So were some of the ones in the examples I have given. Appreciated, thanks. Quote Link to comment Share on other sites More sharing options...
javeajag Posted March 9, 2022 Author Report Share Posted March 9, 2022 51 minutes ago, jaf said: I am sorry this shows a complete misunderstanding of due diligence as someone who does it regularly, you are right I always sit down and discuss the target with my instructing party and say are there any particular areas of concern so those can be specifically addressed. That seems to be what you think is the limit of due diligence - what can be expected to be known by people outside the business. (I know that some on the TJF board share that misunderstanding). in the last two years I have done 7 large due diligence exercises. In all seven things were found which the instructing party knew nothing about. All of these impacted the deal in one case to extent deal did not proceed, but in the other cases to have changes made to the Legal’s or the price. We have a different risk profile to a commercial purchase but we still deserve that level of comfort assurance and knowledge. Some of the issues uncovered included a company having under declared paye by £500k, in two cases companies using vat schemes they were not entitled to, a furlough fraud, a loan fraud (ie proceeds used for reasons other than those permitted), and various other things. None of these were “areas of concern” by the instructing party. The directors of the selling companies did not even realise some of these things! How could you or a fan know about any of these to know what the areas of concern might be. This is why people pay for due diligence after all. I am NOT saying any of these exist in Partick thistle. How can I? But equally how can TJF say whether they (or other issues) exist or do not? Let’s not have a DD competition…..I too have been involved in multiple DD exercises and numerous acquisitions and indeed compiled DD manuals which to say they were extensive would be an understatement. therefore I have obviously no objection in principle to DD and have said tjf should understand what they are taking over. The potential areas where bad things might be located by the nature of the business are small. but it’s what’s needed for a football club with a turnover of £1.75m that is the question …..but call it DD if that makes everyone happy but it’s not a large or complicated business and shouldn’t be treated as such Quote Link to comment Share on other sites More sharing options...
jaf Posted March 9, 2022 Report Share Posted March 9, 2022 (edited) 1 hour ago, javeajag said: Let’s not have a DD competition…..I too have been involved in multiple DD exercises and numerous acquisitions and indeed compiled DD manuals which to say they were extensive would be an understatement. therefore I have obviously no objection in principle to DD and have said tjf should understand what they are taking over. The potential areas where bad things might be located by the nature of the business are small. but it’s what’s needed for a football club with a turnover of £1.75m that is the question …..but call it DD if that makes everyone happy but it’s not a large or complicated business and shouldn’t be treated as such No competition. the last one I did (in Leeds in February) was a £2m turnover company the acquirers concluded it was worth paying my fees for a professional exercise. But to be honest, it doesn’t matter (to some extent) what you and I think. We are merely members I wouldn’t sit on a board and take members money unless I had satisfied myself that I had been diligent in ensuring the statements I was making about what that money could do for the club were as close to correct as I could understand Its called a principle. That’s why I don’t sit on the board anymore My regulator agreed with me Your opinion matters less to me than my regulator!!! But as I say it’s not our decision to make FIrstly Tjf board must decide if they want to do it If they conclude they do, then TBC/PTFC need to agree to it (so ultimately there is a veto nothing to do with TJF or their members and I have sympathy with that) If TJF accept they are not getting to do it, I guess they can walk away , or accept it and press on. If the latter, I suggest they communicate with members transparently and honestly their rationale Then, us, members, fans, potential members, can decide whether to be members / involved on the basis of what we are told for what it’s worth, I think due diligence is the least of our issues Edited March 9, 2022 by jaf Quote Link to comment Share on other sites More sharing options...
BowenBoys Posted March 9, 2022 Report Share Posted March 9, 2022 Does anyone know what happens to subscriptions we have paid if TJF fail? Quote Link to comment Share on other sites More sharing options...
sandy Posted March 9, 2022 Report Share Posted March 9, 2022 1 hour ago, BowenBoys said: Does anyone know what happens to subscriptions we have paid if TJF fail? Presumably they’d be duty bound to return them all, BB? Quote Link to comment Share on other sites More sharing options...
sandy Posted March 9, 2022 Report Share Posted March 9, 2022 6 hours ago, jaf said: for what it’s worth, I think due diligence is the least of our issues In your, valued, opinion @jaf what are the bigger issues? Quote Link to comment Share on other sites More sharing options...
eljaggo Posted March 9, 2022 Report Share Posted March 9, 2022 Given the quality of posts in this thread, presumably any due diligence would consider the risks of fan ownership. 1 1 Quote Link to comment Share on other sites More sharing options...
javeajag Posted March 9, 2022 Author Report Share Posted March 9, 2022 37 minutes ago, eljaggo said: Given the quality of posts in this thread, presumably any due diligence would consider the risks of fan ownership. As well as the risks of fan ownership not going ahead….. Quote Link to comment Share on other sites More sharing options...
Norgethistle Posted March 9, 2022 Report Share Posted March 9, 2022 33 minutes ago, javeajag said: As well as the risks of fan ownership not going ahead….. It shouldn’t be fan ownership regardless of the risks and regardless how prepared or bought into it the fan base are. It needs doing right or not at all. 1 Quote Link to comment Share on other sites More sharing options...
javeajag Posted March 9, 2022 Author Report Share Posted March 9, 2022 1 minute ago, Norgethistle said: It shouldn’t be fan ownership regardless of the risks and regardless how prepared or bought into it the fan base are. It needs doing right or not at all. My point was fairly obvious ….fan ownership not going ahead is not a risk free option and itself may lead to very bad things happening Quote Link to comment Share on other sites More sharing options...
Jordanhill Jag Posted March 9, 2022 Report Share Posted March 9, 2022 9 minutes ago, javeajag said: My point was fairly obvious ….fan ownership not going ahead is not a risk free option and itself may lead to very bad things happening The Directors of the Club have a duty to the Shareholders to ensure we continue as a going concern Fan Ownership is no more than Colin Weirs "wish" it is nothing beyond that - therefore the legal status quo is that the Club Continues in the present structure and the current ownership - if there is any risk associated with the Status Quo then the Board have to take steps to prevent it - or resign an request others take there place To equate Fan Ownership with "very bad things happening" is nonsense Quote Link to comment Share on other sites More sharing options...
Jordanhill Jag Posted March 9, 2022 Report Share Posted March 9, 2022 3 hours ago, sandy said: In your, valued, opinion @jaf what are the bigger issues? Sandy - cant answer for Jaf - but the simple fact is that we have always struggled to raise enough Revenue to Cover our Costs - key to this is a shrinking ( and age-ing ) Fanbase Add to this Financial Pressures of Covid on Businesses ref any Commercial Deals And there you have the Main Risk ie balancing the books Plus we dont have Gary Harkins or Big Twadds to sell - to cover any large finance demands 1 Quote Link to comment Share on other sites More sharing options...
javeajag Posted March 9, 2022 Author Report Share Posted March 9, 2022 Just now, Jordanhill Jag said: The Directors of the Club have a duty to the Shareholders to ensure we continue as a going concern Fan Ownership is no more than Colin Weirs "wish" it is nothing beyond that - therefore the legal status quo is that the Club Continues in the present structure and the current ownership - if there is any risk associated with the Status Quo then the Board have to take steps to prevent it - or resign an request others take there place To equate Fan Ownership with "very bad things happening" is nonsense Missed the point….. agreed if fan ownership doesn’t go ahead then current ownership stays in place three black cats are effectively Jacqui Lowe and neither she nor them see themselves as long term owners of the club, indeed it was Colin weirs express wish that they were not so therefore 3BC would have to decide what to do : 1. Keep owning the club for a while to see what happens 2. conclude that Colin weirs wishes can’t be met as fans don’t want to own the club so sell the club - to current management - to a new buyer - ask current management to run the club on a no cost basis through say a community or charitable trust - effectively give the club away , the Craig white option - wind the club up we can’t assume that 3BC will just carry on regardless so there are risks in the be careful what you wish for category. Quote Link to comment Share on other sites More sharing options...
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