STEVE TUCKER ATTEMPTS TO TELL U THE THREAT OF ADMINISTRATION
Tue Jan 26, 2016 4:33 pm
Cardiff City's battle with Langston and the threat of administration - explained
26 JAN 2016
BY STEVE TUCKER
Steve Tucker attempts to answer fans' questions and explain the threat that is currently hanging over the club
When we revealed the news Cardiff City could be plunged into administration if the club loses its High Court case against main creditor Langston , it caused shockwaves among the supporters. Fans had plenty of questions about how the club could end up in such a serious predicament. Here we try and answer some of those questions.
What is this dispute actually about?
The club and Panama-registered Langston are set to face off in the High Court over £5.7m still owed by the Bluebirds on £24m in loan notes taken out by then-Cardiff owner Sam Hammam from Langston back in 2004.
Hammam remains the representative for Langston and new owner Vincent Tan inherited the long-standing debt when he took over at the club.
Four years ago, the two parties reached agreement on a £22m settlement, to be paid in the form of £15m up front, followed by £7m in £250,000 quarterly instalments over seven years.
When payments stopped, Hammam and Langston filed a case in the High Court to attempt to retrieve the outstanding sum which could total as much as £6.7m now with interest and when legal costs are taken into consideration.
Sources at the club have told us that if Langston are successful and demand immediate payment up front, which could happen, the club could face administration.
Harry Trump/Getty ImagesThe main entrance at the Cardiff City StadiumCardiff City fans await the court case
Related: Cardiff City breaking transfer news live: Bluebirds target another loan deal as Langston legal dispute hangs over club
Surely the club couldn’t really go into administration, could it?
Yes, it could. If Langston win in the High Court, the club could be liable to pay £5.7m immediately to the group. The court would dictate that money is owed and must be paid. Langston could issue a statutory demand for payment. If Cardiff have not paid within 21 days, Langston could call for an administrator to be appointed or potentially even for a winding-up order to be issued.
But Vincent Tan is a billionaire. He would sort it out, wouldn’t he?
You would think that is the most likely scenario as Tan would lose out financially if the club went into administration, but there is no guarantee.
He is already owed more than £100m by Cardiff City, despite having written off £13m in loans already. He is still injecting more money each month into the club to keep it ticking over.
He could sell off the assets the club has, most likely players, but the most valuable asset, Cardiff City Stadium itself, valued at around £50m, is actually on a long-term lease from Cardiff Council.
Mehmet Dalman and Vincent Tan are key players at Cardiff CityMehmet Dalman and Vincent Tan are the key players at Cardiff City
If administration did happen, Tan would only get 25p in the pound of any other money he is owed, as would other creditors, like Langston themselves.
In short, it appears from the outside to make financial sense for him to pay out of his own pocket if the case is lost, but if he is unwilling to do so, the club itself would not be able to fund the required payment.
Would Langston want the amount up front if they won?
Vincent Tan and Sam Hammam
They might well do, as the previous repayment deal would be void, although there could be further negotiations to work out another staggered payment schedule. After the last deal collapsed, Langston might be expected to push for their money straightaway, heightening fears of administration.
Cardiff City fear administration if club loses impending court case over £5.7m debt
Why did Cardiff City stop repaying Langston anyway?
Basically, there are real concerns as to who is behind Langston. The group is registered in Panama and has an address in Switzerland, but nothing is known about who the group really are. Sam Hammam has always been their representative.
What exactly is the club’s legal argument?
Cardiff City’s argument in the High Court is slightly complicated. But it basically hinges on discrepancies between an agreement made in 2009 that said nothing needed to be paid until 2016 and the renegotiated deal in 2013 that called for the staggered payments that were recently halted.
When will the case be heard and how long will it take to make a judgement?
The case could be heard as early as next week. Langston have asked for a summary judgement, although they are seldom issued as the judge would have to agree that Cardiff City have no chance of actually defending the case were it to go to trial. There is no jury, so the decision will be down to a judge only. It is destined to last for two to three days, but a trial date could be pushed back for months if there is no summary judgement.
If Cardiff City lose, can they appeal?
Yes, and they might. An appeal could see the legal process drag out for months longer.
What if Cardiff win?
The suggestions are Cardiff could potentially try and get the money back they have already paid Langston and then try and negotiate a completely new repayment deal. Whatever the outcome, it is likely to be a drawn-out process involving plenty more negotiation.
What is administration anyway? What would happen to Cardiff City if they go into it?
The tipping point for a football club to go into administration is when it cannot pay its creditors, whether that be the Inland Revenue or, in this case, Langston.
It is in place to stop clubs going into liquidation. An administrator would be called in to look to balance the books, which could result in a ‘fire sale’ of players.
The administrator would meet with the Cardiff City Supporters’ Trust within three weeks and would look for a potential buyer for the club too. Vincent Tan would have no say if the club were in administration as to who that buyer would be.
If a club enters administration they are automatically deducted 12 points. That would put Russell Slade’s men in a relegation battle in the Championship. A club cannot be in administration for longer than 18 months or two consecutive seasons, but usually the period is no longer than 12 months, as an extension then has to be applied for.
26 JAN 2016
BY STEVE TUCKER
Steve Tucker attempts to answer fans' questions and explain the threat that is currently hanging over the club
When we revealed the news Cardiff City could be plunged into administration if the club loses its High Court case against main creditor Langston , it caused shockwaves among the supporters. Fans had plenty of questions about how the club could end up in such a serious predicament. Here we try and answer some of those questions.
What is this dispute actually about?
The club and Panama-registered Langston are set to face off in the High Court over £5.7m still owed by the Bluebirds on £24m in loan notes taken out by then-Cardiff owner Sam Hammam from Langston back in 2004.
Hammam remains the representative for Langston and new owner Vincent Tan inherited the long-standing debt when he took over at the club.
Four years ago, the two parties reached agreement on a £22m settlement, to be paid in the form of £15m up front, followed by £7m in £250,000 quarterly instalments over seven years.
When payments stopped, Hammam and Langston filed a case in the High Court to attempt to retrieve the outstanding sum which could total as much as £6.7m now with interest and when legal costs are taken into consideration.
Sources at the club have told us that if Langston are successful and demand immediate payment up front, which could happen, the club could face administration.
Harry Trump/Getty ImagesThe main entrance at the Cardiff City StadiumCardiff City fans await the court case
Related: Cardiff City breaking transfer news live: Bluebirds target another loan deal as Langston legal dispute hangs over club
Surely the club couldn’t really go into administration, could it?
Yes, it could. If Langston win in the High Court, the club could be liable to pay £5.7m immediately to the group. The court would dictate that money is owed and must be paid. Langston could issue a statutory demand for payment. If Cardiff have not paid within 21 days, Langston could call for an administrator to be appointed or potentially even for a winding-up order to be issued.
But Vincent Tan is a billionaire. He would sort it out, wouldn’t he?
You would think that is the most likely scenario as Tan would lose out financially if the club went into administration, but there is no guarantee.
He is already owed more than £100m by Cardiff City, despite having written off £13m in loans already. He is still injecting more money each month into the club to keep it ticking over.
He could sell off the assets the club has, most likely players, but the most valuable asset, Cardiff City Stadium itself, valued at around £50m, is actually on a long-term lease from Cardiff Council.
Mehmet Dalman and Vincent Tan are key players at Cardiff CityMehmet Dalman and Vincent Tan are the key players at Cardiff City
If administration did happen, Tan would only get 25p in the pound of any other money he is owed, as would other creditors, like Langston themselves.
In short, it appears from the outside to make financial sense for him to pay out of his own pocket if the case is lost, but if he is unwilling to do so, the club itself would not be able to fund the required payment.
Would Langston want the amount up front if they won?
Vincent Tan and Sam Hammam
They might well do, as the previous repayment deal would be void, although there could be further negotiations to work out another staggered payment schedule. After the last deal collapsed, Langston might be expected to push for their money straightaway, heightening fears of administration.
Cardiff City fear administration if club loses impending court case over £5.7m debt
Why did Cardiff City stop repaying Langston anyway?
Basically, there are real concerns as to who is behind Langston. The group is registered in Panama and has an address in Switzerland, but nothing is known about who the group really are. Sam Hammam has always been their representative.
What exactly is the club’s legal argument?
Cardiff City’s argument in the High Court is slightly complicated. But it basically hinges on discrepancies between an agreement made in 2009 that said nothing needed to be paid until 2016 and the renegotiated deal in 2013 that called for the staggered payments that were recently halted.
When will the case be heard and how long will it take to make a judgement?
The case could be heard as early as next week. Langston have asked for a summary judgement, although they are seldom issued as the judge would have to agree that Cardiff City have no chance of actually defending the case were it to go to trial. There is no jury, so the decision will be down to a judge only. It is destined to last for two to three days, but a trial date could be pushed back for months if there is no summary judgement.
If Cardiff City lose, can they appeal?
Yes, and they might. An appeal could see the legal process drag out for months longer.
What if Cardiff win?
The suggestions are Cardiff could potentially try and get the money back they have already paid Langston and then try and negotiate a completely new repayment deal. Whatever the outcome, it is likely to be a drawn-out process involving plenty more negotiation.
What is administration anyway? What would happen to Cardiff City if they go into it?
The tipping point for a football club to go into administration is when it cannot pay its creditors, whether that be the Inland Revenue or, in this case, Langston.
It is in place to stop clubs going into liquidation. An administrator would be called in to look to balance the books, which could result in a ‘fire sale’ of players.
The administrator would meet with the Cardiff City Supporters’ Trust within three weeks and would look for a potential buyer for the club too. Vincent Tan would have no say if the club were in administration as to who that buyer would be.
If a club enters administration they are automatically deducted 12 points. That would put Russell Slade’s men in a relegation battle in the Championship. A club cannot be in administration for longer than 18 months or two consecutive seasons, but usually the period is no longer than 12 months, as an extension then has to be applied for.
Re: STEVE TUCKER ATTEMPTS TO TELL U THE THREAT OF ADMINISTRA
Tue Jan 26, 2016 5:45 pm
Scaremongering! 
Re: STEVE TUCKER ATTEMPTS TO TELL U THE THREAT OF ADMINISTRA
Tue Jan 26, 2016 6:21 pm
So it is the opinion of the club that it would be Langston that would call for the winding up order?
The club obviously would not. It is only scaremongering if there is no way Sam would call for a winding up order on behalf of Langstone.
Would he?
Obviously to stop it all we just have to cough up the money but are the club forcing Sam to look like the bad guy here.
The club obviously would not. It is only scaremongering if there is no way Sam would call for a winding up order on behalf of Langstone.
Would he?
Obviously to stop it all we just have to cough up the money but are the club forcing Sam to look like the bad guy here.
Re: STEVE TUCKER ATTEMPTS TO TELL U THE THREAT OF ADMINISTRA
Tue Jan 26, 2016 7:50 pm
There is a huge chance I am being a bit simple here but, if Tan is being taken to court over missed payments which he agreed to pay, and not the club, which is how I have read previous threads, how will the club be thrown into administration??
Just asking
Just asking
Re: STEVE TUCKER ATTEMPTS TO TELL U THE THREAT OF ADMINISTRA
Tue Jan 26, 2016 8:06 pm
But Sam is one of us!
He loves the club and the fans with all his heart!
He'll persuade those nasty Langston people (whoever they may be
) not to do anything that would harm his beloved Cardiff City surely!
He is their "representative" after all.
Honestly, it's like watching two toddlers arguing over a dummy.
He loves the club and the fans with all his heart!
He'll persuade those nasty Langston people (whoever they may be
) not to do anything that would harm his beloved Cardiff City surely!He is their "representative" after all.
Honestly, it's like watching two toddlers arguing over a dummy.
Re: STEVE TUCKER ATTEMPTS TO TELL U THE THREAT OF ADMINISTRA
Tue Jan 26, 2016 8:15 pm
Mr Potato wrote:There is a huge chance I am being a bit simple here but, if Tan is being taken to court over missed payments which he agreed to pay, and not the club, which is how I have read previous threads, how will the club be thrown into administration??
Just asking
All a bit strange
Re: STEVE TUCKER ATTEMPTS TO TELL U THE THREAT OF ADMINISTRA
Tue Jan 26, 2016 8:33 pm
Mr Potato wrote:There is a huge chance I am being a bit simple here but, if Tan is being taken to court over missed payments which he agreed to pay, and not the club, which is how I have read previous threads, how will the club be thrown into administration??
Just asking
I thought Langston were claiming against two parties, the football club limited company and Vincent Tan personally.
Re: STEVE TUCKER ATTEMPTS TO TELL U THE THREAT OF ADMINISTRA
Tue Jan 26, 2016 11:23 pm
davids wrote:But Sam is one of us!
He loves the club and the fans with all his heart!
He'll persuade those nasty Langston people (whoever they may be
He is their "representative" after all.
Honestly, it's like watching two toddlers arguing over a dummy.
That may well be put to the test should Langstone win.Just imagine that
,some on here would drown in humble pie.
Re: STEVE TUCKER ATTEMPTS TO TELL U THE THREAT OF ADMINISTRA
Wed Jan 27, 2016 7:43 am
This is a real threat and is the very reason I have nevet trusted Tan his promise to turn debt to equity has never happened not many fans saw the bigger picture when we were in the premier league accumulating huge debts playing in red.
Tan has run up massive debts and put city in a perilous position and for what one year in the prem in red that's why I have never supported Tan.
Now people are seeing the bigger picture a billionaire that's run up the garden path .
We always seem to be shafted at cardiff
Tan has run up massive debts and put city in a perilous position and for what one year in the prem in red that's why I have never supported Tan.
Now people are seeing the bigger picture a billionaire that's run up the garden path .
We always seem to be shafted at cardiff
Re: STEVE TUCKER ATTEMPTS TO TELL U THE THREAT OF ADMINISTRA
Wed Jan 27, 2016 8:25 am
he has written off 20 million already nearly as much as the Langston debt thobrickyblue wrote:This is a real threat and is the very reason I have nevet trusted Tan his promise to turn debt to equity has never happened not many fans saw the bigger picture when we were in the premier league accumulating huge debts playing in red.
Tan has run up massive debts and put city in a perilous position and for what one year in the prem in red that's why I have never supported Tan.
Now people are seeing the bigger picture a billionaire that's run up the garden path .
We always seem to be shafted at cardiff
Re: STEVE TUCKER ATTEMPTS TO TELL U THE THREAT OF ADMINISTRA
Wed Jan 27, 2016 7:44 pm
wez1927 wrote:he has written off 20 million already nearly as much as the Langston debt thobrickyblue wrote:This is a real threat and is the very reason I have nevet trusted Tan his promise to turn debt to equity has never happened not many fans saw the bigger picture when we were in the premier league accumulating huge debts playing in red.
Tan has run up massive debts and put city in a perilous position and for what one year in the prem in red that's why I have never supported Tan.
Now people are seeing the bigger picture a billionaire that's run up the garden path .
We always seem to be shafted at cardiff
Also created over 100 mill more in debt promised to convert debt to equity hasn't and we have a transfer embargo in place it ain't good is it mate