Dispute at Pillings

[MtB]

 

I did. I think i just quoted from it

 

I do wish you'd keep up with this thread Dean instead of popping in every couple of days and asking questions already covered in detail.

 

The requirements for the new NAA will depend on who is applying for it. If it is Steadman/Lillie etc then their creditworthiness has been shot to pieces and the terms will naturally be a whole load more onerous than if, say, the Duke of Westminster was applying

 

MtB

[Borntofloat]

I removed my boat from Pillings last weekend & en route met four others doing likewise.

Far from obstructing CRT I'll help them.

Hope to see you at the May open weekend at Pillings nature reserve!

Watched two of those go into a neighbouring Marina ..

[costalot]

 

It sounds to me as if they're saying that any new NAA would have to be made with the parent company, not another subsidiary which can go into liquidation without really having any impact on the owners.

If you are correct then it certainly appears to significantly increase Steadman's risk exposure. He would have to decide whether the business was sufficiently viable to warrant placing his investment at risk or sell. either way I can't envisage there will be a position for PL.

[SoosieQ]

I have a feeling PL will still come out of this smelling of roses with his 59k salary intact! And will little RR be the new fall guy?

[johnlillie]

interesting aside, RR is a member of a Charnwood borough council committee for crime and safety, he was until he recently resigned, secretary. He quoted his going away to university the reason for standing down, makes one wonder how he is going to run the marina if he can't spare the time for one meeting every two months.

[Tuscan]

If you are correct then it certainly appears to significantly increase Steadman's risk exposure. He would have to decide whether the business was sufficiently viable to warrant placing his investment at risk or sell. either way I can't envisage there will be a position for PL.

With 25% PL still has a significant minority shareholding and I imagine influence as the shareholder with the experience in running the marina

[DeanS]

 

I do wish you'd keep up with this thread Dean instead of popping in every couple of days and asking questions already covered in detail.

 

The requirements for the new NAA will depend on who is applying for it. If it is Steadman/Lillie etc then their creditworthiness has been shot to pieces and the terms will naturally be a whole load more onerous than if, say, the Duke of Westminster was applying

 

MtB

 

You misunderstand my question. I am up to speed, but I read Phil Spencers email..and his words are..."If however any new owner is unwilling to meet our requirements for completing a standard NAA then no agreement will be granted.". I know that we are theorising about what those requirements are...that it would have to be a new company CRT are happy with...but I wondered if there was actually any printed documentation, on a CRT letterhead/email which states....."our exact requirements are....1...2....3" . I may only check this thread once a day....but I dont think CRT have put such a document into the public domain yet have they? We assume to know what their requirements are....but I'm asking...have I missed something in the past few days, where CRT have announced...their exact NAA requirements....? Forgive me for asking.

 

 

additional questions added:

 

1. Do they require escrow?

2. Will they accept RR, with escrow?

3. Have they said to PL...do this , and this ,...and this...and we wont block it in 4weeks.

 

Considering the lawyers first letter was Feb 10th...and then Feb 22nd....and his next update is April 4th, it does seem that these things take time, and getting it all wrapped up for a new NAA before "closing date" might not happen.

 

Edited March 4, 2014 by DeanS

[tupperware]

 

You misunderstand my question. I am up to speed, but I read Phil Spencers email..and his words are..."If however any new owner is unwilling to meet our requirements for completing a standard NAA then no agreement will be granted.". I know that we are theorising about what those requirements are...that it would have to be a new company CRT are happy with...but I wondered if there was actually any printed documentation, on a CRT letterhead/email which states....."our exact requirements are....1...2....3" . I may only check this thread once a day....but I dont think CRT have put such a document into the public domain yet have they? We assume to know what their requirements are....but I'm asking...have I missed something in the past few days, where CRT have announced...their exact NAA requirements....? Forgive me for asking.

 

 

additional questions added:

 

1. Do they require escrow?

2. Will they accept RR, with escrow?

3. Have they said to PL...do this , and this ,...and this...and we wont block it in 4weeks.

 

Considering the lawyers first letter was Feb 10th...and then Feb 22nd....and his next update is April 4th, it does seem that these things take time, and getting it all wrapped up for a new NAA before "closing date" might not happen.

 

 

DeanS. CRT actually publish a sample NAA at https://canalrivertrust.org.uk/media/library/266.pdf which, interestingly enough, carries Mr Spencer's name at the bottom. It dates from 2005. Interestingly enough, it contains a provision that an NAA "Is transferable to another party who is the freehold owner or head lessee of the whole marina with CRT consent (such consent not be unreasonably withheld or delayed). "

 

Many pages ago there were various references to CRT being required not to unreasonably withhold permission for an NAA. This is not what the sample agreement says in that it makes quite clear that not unreasonably withholding permission refers to the transfer of an NAA from one party to another. In the present case, QMP is no more and the original NAA is dead and buried which means there is nothing to transfer.

 

The sample agreement is very lightweight and it is highly probable that behind it lays one or more contractual agreements which set out the responsibilities of the contracting parties in terms more acceptable to 'mLearned friends. CRT would, one assumes, be able to vary the terms when negotiating any new NAA with any other party although always within the terms of the Transport Act mentioned.

[dor]

Pleased to note that C&RT's letter makes reference to shadow directors. I do wonder how much power he has to go after the other companies for the money, due to the way they are linked.

 

On another note, lets say this 750 company "buys" the marina and becomes the new operator. New directors and new MD. C&RT then think it is ok, and sign a new NAA with them, maybe asking for payments monthly or quarterly in advance. Payments are made for the first few months, then PL gets taken on as an employee. Puppet management move aside to allow the wonderful experienced charismatic skilled businessman to take over and life carries on as before with PL getting his big salary, fancy company car etc. etc.

 

Meanwhile C&RT (and therefore honest boaters) have still been screwed, Steadman keeps his money and PL gets his old job back.

[tupperware]

With 25% PL still has a significant minority shareholding and I imagine influence as the shareholder with the experience in running the marina

 

Whatever influence Mr Lillie junior may or may not have, the question is really whether CRT would be prepared to do business with a company whose management seems rather too close to that of the late QMP. There seems little reason for CRT to move rapidly in terms of any new NAA and the longer the marina remains disconnected from the national network, the more severe the impact on PLM and, unfortunately, the moorers and leaseholders. If CRT were to choose to drag their feet, I am sure that they would be able to demonstrate any number of reasons as to why their pre-contract investigations into the other party were somewhat protracted including citing the recent High Court decision in respect of the £185.000. In response to this, there appears little that QMH, the new company, or PLM could do to force CRT's hand.

[MtB]

 

You misunderstand my question. I am up to speed, but I read Phil Spencers email..and his words are..."If however any new owner is unwilling to meet our requirements for completing a standard NAA then no agreement will be granted.". I know that we are theorising about what those requirements are...that it would have to be a new company CRT are happy with...but I wondered if there was actually any printed documentation, on a CRT letterhead/email which states....."our exact requirements are....1...2....3" . I may only check this thread once a day....but I dont think CRT have put such a document into the public domain yet have they? We assume to know what their requirements are....but I'm asking...have I missed something in the past few days, where CRT have announced...their exact NAA requirements....? Forgive me for asking.

 

 

additional questions added:

 

1. Do they require escrow?

2. Will they accept RR, with escrow?

3. Have they said to PL...do this , and this ,...and this...and we wont block it in 4weeks.

 

Considering the lawyers first letter was Feb 10th...and then Feb 22nd....and his next update is April 4th, it does seem that these things take time, and getting it all wrapped up for a new NAA before "closing date" might not happen.

 

 

 

My apologies Dean, yes I did misunderstand.

 

The the interesting document unearthed by tupperware (in answer to your misunderstood question) says the requirement is to pay quarterly in advance anyway, and that a dispute procedure is included. I think one can safely assume the actual NAA contract either didn't spell out a right for BW to disconnect the marina if the quarterly payments were late or not made at all, or CRT chose to ignore this method of applying pressure and tried to collect the money through the courts instead.

 

Only when they still failed did they decide on disconnection, and in order to achieve this it seems the NAA needed to be cancelled. Pretty extreme really, to repudiate the contract. It seems remiss if the BW lawyers failed to include the sanction of temporary disconnection while the NAA remained in force. But then I suppose they'd be reluctant to use it as its the boaters who would suffer, not the marina. I'd be fascinated to read the disputes procedure and I bet BW/CRT followed it to the letter!

 

Escrow seems a good solution, provided it contains teeth once the escrow moneys have been paid over, should the new company STILL fail to pay the NAA.

 

It's good that Phil Spencer seems tuned in now to the powers and responsibilities of shadow directors.

 

MtB

[tupperware]

Pleased to note that C&RT's letter makes reference to shadow directors. I do wonder how much power he has to go after the other companies for the money, due to the way they are linked.

 

On another note, lets say this 750 company "buys" the marina and becomes the new operator. New directors and new MD. C&RT then think it is ok, and sign a new NAA with them, maybe asking for payments monthly or quarterly in advance. Payments are made for the first few months, then PL gets taken on as an employee. Puppet management move aside to allow the wonderful experienced charismatic skilled businessman to take over and life carries on as before with PL getting his big salary, fancy company car etc. etc.

 

Meanwhile C&RT (and therefore honest boaters) have still been screwed, Steadman keeps his money and PL gets his old job back.

 

The primary responsibility of an IP is to secure as much as possible for as many creditors as possible, secured and unsecured. In order to achieve that result the IP has wide powers to investigate the circumstances surrounding the liquidation including whether the management of the company concerned (directors and shadow directors) have behaved responsibility. There is an document published by a legal firm at http://www.ts-p.co.uk/uploaded/publications/information_sheets/Corporate_Commercial/directors_responsibilities_avoiding_the_wrongful_trading_trap.pdf

which does make for interesting reading.

 

There is nothing to suggest at this time that the IP will find any evidence whatsoever of irresponsible behaviour although Mr Spencer's latest statement does suggest that they are satisfied that the IP is carrying out his duties with some diligence. It would not be unreasonable to assume that CRT, facing a £185,000 write-off, are keeping themselves well acquainted with the activities of the IP and may even be suggesting some possible avenues for investigation.

[DeanS]

thanks chaps ;-).

And to confirm...it is now just a waiting game while...:

 

1. The liquidator/lawyers continue to wrap up the old company/debts.

2. RR is upgraded to full ownership status to meet the requirements of entering into an NAA with CRT, and signs the new agreement. (paying escrow if required)

3. to see if this can be put in place prior to April 13. It may, or it may not.

4. If not, the marina will be sealed, but I guess could be re-opened easily if points 2 can be followed through with soon after.

 

I guess that just leaves one big question.

 

If RR is unacceptable to CRT due to previous involvement in the running of the previous marina, then the marina being sealed up, will be a long term thing....with the marina suffering large resale de-valuation, loss of income from boaters, etc etc.

 

Hope the RR chap is getting a substantial payout for his newly found "importance". Without him, things look more dire than they are.

[MtB]

 

Whatever influence Mr Lillie junior may or may not have, the question is really whether CRT would be prepared to do business with a company whose management seems rather too close to that of the late QMP. There seems little reason for CRT to move rapidly in terms of any new NAA and the longer the marina remains disconnected from the national network, the more severe the impact on PLM and, unfortunately, the moorers and leaseholders. If CRT were to choose to drag their feet, I am sure that they would be able to demonstrate any number of reasons as to why their pre-contract investigations into the other party were somewhat protracted including citing the recent High Court decision in respect of the £185.000. In response to this, there appears little that QMH, the new company, or PLM could do to force CRT's hand.

 

Firstly, it looks to me as though BW lawyers were wrong-footed in the first place when they granted the NAA to QMP. I suspect they rather naïvely but reasonably assumed that as QMP applied for it, QMP would be the company issuing the moorings agreements and collecting the rents. Instead, the sister company (why is it not a brother company?) collected the rents and kept the money it seems. So any new network agreement will need to guard against this being done again whoever is applying for it, PL influenced or not.

 

Secondly, I think any NAA ought (if they don't already) to require a viable business plan to be lodged which demonstrates that the NAA can be afforded. Both these measures would be evenhanded and fair to anyone applying for a NAA anywhere, but this second measure is the bit that would stress out and possibly exclude the Lillie/Streadman team because they'd need to demonstrate changes to make it all different next time around. It's hard to envisage meaures that would satisfy me the debacle would not be repeated if the current management/ownership regime remained in place and CRT too, I'd hope.

 

And yes, I read Phil Spencer's latest missive as saying CRT are in no hurry whatsoever to get the marina re-connected, short of a spontaneous voluntary donation of £180k to the CRT coffers from PL/Steadman. And even then, no promises.

 

 

MtB

[tupperware]

 

 

My apologies Dean, yes I did misunderstand.

 

The the interesting document unearthed by tupperware (in answer to your misunderstood question) says the requirement is to pay quarterly in advance anyway, and that a dispute procedure is included. I think one can safely assume the actual NAA contract either didn't spell out a right for BW to disconnect the marina if the quarterly payments were late or not made at all, or CRT chose to ignore this method of applying pressure and tried to collect the money through the courts instead.

 

Only when they still failed did they decide on disconnection, and in order to achieve this it seems the NAA needed to be cancelled. Pretty extreme really, to repudiate the contract. It seems remiss if the BW lawyers failed to include the sanction of temporary disconnection while the NAA remained in force. But then I suppose they'd be reluctant to use it as its the boaters who would suffer, not the marina. I'd be fascinated to read the disputes procedure and I bet BW/CRT followed it to the letter!

 

Escrow seems a good solution, provided it contains teeth once the escrow moneys have been paid over, should the new company STILL fail to pay the NAA.

 

It's good that Phil Spencer seems tuned in now to the powers and responsibilities of shadow directors.

 

MtB

 

MtB. I think it most unlikely that the legal contract, of which the document to which I linked would only be a précis, did not spell out the penalties for non-payment. We do know that QMP did not contest CRT's High Court action and I am pretty sure that CRT will not have stated the intent in terms of disconnection were their legal right to so do in any way disputable. The sample "lightweight" agreement is not explicit as to the timescale for the dispute procedures although it is to be expected that these would be spelled out in some detail in the legal contract. As to whether three years or so is normal, whether the matter moved off BW's radar or whether BW/CRT have bent over backwards to try and accommodate QMP's reluctance to pay is a matter of conjecture. I do not know whether the judgment in the recent case of CRT versus QMP is in the public domain but if it is and anyone here can locate it it might include details on just why CRT seems to have waited an inordinately long time before seeking legal redress. The case did, of course, cost some £25,000 in legal fees which might have inhibited any decision on the part of CRT to move earlier.

 

A formal escrow arrangement would indeed protect CRT against additional loss should any new owner of the site fail to meet their obligations under any new NAA. If such an arrangement were put in place, it might well form part of that new NAA.

[mayalld]

 

There is nothing to suggest at this time that the IP will find any evidence whatsoever of irresponsible behaviour although Mr Spencer's latest statement does suggest that they are satisfied that the IP is carrying out his duties with some diligence. It would not be unreasonable to assume that CRT, facing a £185,000 write-off, are keeping themselves well acquainted with the activities of the IP and may even be suggesting some possible avenues for investigation.

 

It has been suggested that the IP will do little, because there is little money available to fund his work.

 

It does rather look as if CRT may be prepared to fund the IP to unravel the affairs of QMP if it believes that this might produce a dividend.

[MtB]

thanks chaps ;-).

And to confirm...it is now just a waiting game while...:

 

1. The liquidator/lawyers continue to wrap up the old company/debts.

2. RR is upgraded to full ownership status to meet the requirements of entering into an NAA with CRT, and signs the new agreement. (paying escrow if required)

 

 

Dean, I think you are equating directorships with ownership. A company is a separate legal entity from its directors (and from its shareholders). I director does not even need to own shares in his company, he is often an ordinary employee albeit one with special powers and responsibilities which if abused can result in the director becoming personally liable for the financial consequences of his decisions.

 

The plan is for RR never to own the marina. Ownership is intended by PL to be transferred to No 750 Leicester Ltd. A company is owned collectively by its shareholders. A majority shareholder gets to call the shots by out-voting all the other shareholders in decision making, and the majority shareholder in No 750 Leicester Ltd will be QMH as I understand it, so QMH will control No 750 Leicester Ltd.

 

 

MtB

[tupperware]

thanks chaps ;-).

And to confirm...it is now just a waiting game while...:

 

1. The liquidator/lawyers continue to wrap up the old company/debts.

2. RR is upgraded to full ownership status to meet the requirements of entering into an NAA with CRT, and signs the new agreement. (paying escrow if required)

3. to see if this can be put in place prior to April 13. It may, or it may not.

4. If not, the marina will be sealed, but I guess could be re-opened easily if points 2 can be followed through with soon after.

 

I guess that just leaves one big question.

 

If RR is unacceptable to CRT due to previous involvement in the running of the previous marina, then the marina being sealed up, will be a long term thing....with the marina suffering large resale de-valuation, loss of income from boaters, etc etc.

 

Hope the RR chap is getting a substantial payout for his newly found "importance". Without him, things look more dire than they are.

 

DeanS. Did you actually mean (in reference to RR) that "Without him, things look more dire than they are."?

 

The gentleman concerned is a law student. That he has undertaken some role in the running of the marina is a matter of public record. As such, he will carry the historical baggage associated with that role, including relationships with the major players in past events. His new role will include satisfying CRT as to the credibility of both himself and the new company to enter into a new NAA agreement to supersede that which left CRT staring down a £185,000 black hole. It is by no means certain that the individual concerned will be able to accomplish this.

[MtB]

 

It has been suggested that the IP will do little, because there is little money available to fund his work.

 

It does rather look as if CRT may be prepared to fund the IP to unravel the affairs of QMP if it believes that this might produce a dividend.

 

I'm not sure that is right. I was the one expressing this concern but tupperware (I think) says the IP can take his fees from the proceeds of disposal of the site, ahead even of the mortgagee. This means Mr Steadman's mortgage only entitles him to the sale proceeds after deduction of the IP costs. This still doesn't sound right to me.

 

In addition, as I understand it, a 'mortgagee in repossession' is also entitled to take possession of the mortgaged property but instead of selling it or transferring ownership of it to itself, to administer it indefinitely on behalf of the owner. He may then use profits achieved to pay down the debt to himself provided he account for any surplus/balance to the mortgagor. Mr Steadman is probably aware of this right and it might figure large in his plans.

 

MtB

[BEngo]

I wonder if CRT are empowered to demand a premium for a new NAA? Premiums are not uncommon in commercial agreements. If available a premium of say £185000 from the new lessees of the marina, accompanied by a partial charge over the mooring fees might be an entirely sensible way forward to the satisfaction of all ( or some at least).

 

N

[tupperware]

 

It has been suggested that the IP will do little, because there is little money available to fund his work.

 

It does rather look as if CRT may be prepared to fund the IP to unravel the affairs of QMP if it believes that this might produce a dividend.

 

It is unlikely that CRT are on some kind of "moral crusade" although if they do suspect that some or all of their money may be recoverable then they may provide resources, financial or otherwise, to assist the activities of the IP. CRT will also be aware of the wider implications were a marina owner to be perceived by the industry of being able to drive a coach and horses through an NAA agreement and this has and will continue to have a strong bearing on the actions taken and proposed. So far CRT seems to have played it by the book and their latest statement demonstrates a strength of purpose which I hope they continue to maintain.

[DeanS]

I think it's probably best then for us all to freeze the thread, and come back in about 3-4weeks. By then, it will all be kicking off one way or the other.

[tupperware]

 

I'm not sure that is right. I was the one expressing this concern but tupperware (I think) says the IP can take his fees from the proceeds of disposal of the site, ahead even of the mortgagee. This means Mr Steadman's mortgage only entitles him to the sale proceeds after deduction of the IP costs. This still doesn't sound right to me.

 

In addition, as I understand it, a 'mortgagee in repossession' is also entitled to take possession of the mortgaged property but instead of selling it or transferring ownership of it to itself, to administer it indefinitely on behalf of the owner. He may then use profits achieved to pay down the debt to himself provided he account for any surplus/balance to the mortgagor. Mr Steadman is probably aware of this right and it might figure large in his plans.

 

MtB

 

MtB. I'm not certain I was the one who suggested that the IP's fees come out of asset sales. I have found a document at http://www.realbusinessrescue.co.uk/business-liquidation-and-bankruptcy/disadvantages

which remarks "In a voluntary liquidation, these expenses, along with the cost of appointing an insolvency practitioner, are all covered by the directors." and I understand that QMP entered a Creditor's Voluntary Liquidation. The document is well worth a quick read.

[RLWP]

Watched two of those go into a neighbouring Marina ..

 

Thanjk you for that, it's good to hear from people immediately connected with this

 

Welcome to the forum

 

Richard

[tupperware]

I wonder if CRT are empowered to demand a premium for a new NAA? Premiums are not uncommon in commercial agreements. If available a premium of say £185000 from the new lessees of the marina, accompanied by a partial charge over the mooring fees might be an entirely sensible way forward to the satisfaction of all ( or some at least).

 

N

 

A large company for whom I worked in the past certainly investigated the credit-worthiness of any new customer to satisfy themselves, as far as possible, that the other party would be able to meet its debt obligations in respect of product supplied. In many cases this included delving into the financial history and trading record of that prospective customer and , with the latter's permission, approaching their bank for credit references. IN respect of the marina site, the new company does not, of course, have any trading record at this time and so the credibility of the shareholders and the management team will be uppermost in CRT's mind as to whether a successful business relationship is possible or not.