Money still owed to Garlick

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KRBFC
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Money still owed to Garlick

Post by KRBFC » Tue May 24, 2022 11:37 am

Can anyone tell me where the money to rebuild is going to come from? I think crucially fans are forgetting we still owe Garlick £65m(ish), those instalment dates were recently renegotiated I believe Pace stated likely because we couldn't pay then.

Here is Chester's recent comment on the money owed to the outgoing directors ''I take it that covers the large cheque to the sellers next month? I understand it is the biggest one since the first, and more than the reported fee we received for Chris Wood - unless they have persuaded them to change the schedule again!!''

So around £30m outgoing to Garlick in weeks?

There was rumours if ALK couldn't pay the remaining instalments, Garlick would take back full control. With the entire parachute payments going to MSD, how on earth do we fund Garlick? whilst needing money to rebuild the squad and remain competitive.

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Re: Money still owed to Garlick

Post by KRBFC » Tue May 24, 2022 11:40 am

Still paying transfer fees to Lyon and Stoke.

Still paying MSD interest.

Still paying up Dyche and the staff.

Still need to pay players and staff wages.

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Re: Money still owed to Garlick

Post by Newcastleclaret93 » Tue May 24, 2022 11:40 am

KRBFC wrote:
Tue May 24, 2022 11:37 am
Can anyone tell me where the money to rebuild is going to come from? I think crucially fans are forgetting we still owe Garlick £65m(ish), those instalment dates were recently renegotiated I believe Pace stated likely because we couldn't pay then.

Here is Chester's recent comment on the money owed to the outgoing directors ''I take it that covers the large cheque to the sellers next month? I understand it is the biggest one since the first, and more than the reported fee we received for Chris Wood - unless they have persuaded them to change the schedule again!!''

So around £30m outgoing to Garlick in weeks?

There was rumours if ALK couldn't pay the remaining instalments, Garlick would take back full control. With the entire parachute payments going to MSD, how on earth do we fund Garlick? whilst needing money to rebuild the squad and remain competitive.
Very good point, to answer your bottom question I imagine
It will be from taking out further loans. Daily mail suggesting something similar

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Re: Money still owed to Garlick

Post by Tinribs » Tue May 24, 2022 11:41 am

Garlick bread
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Re: Money still owed to Garlick

Post by ClaretAndJew » Tue May 24, 2022 11:41 am

Pope. McNeil. Cornet. All saleable assets that should cover the Garlick situation.

Parachute payments for the rest.

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Re: Money still owed to Garlick

Post by jedi_master » Tue May 24, 2022 11:48 am

I think people disregard the money owed to Mike 'Sale of the Century' Garlick (including me) when noting down all of our great many problems, on the basis that we'd like to believe (!!!) that he would not be 'calling that in' as easily as Michael Dell certainly will his.

After all, Mike Garlick loves the club and would hate to do anything to put it in further mortal peril than he already has done, wouldn't he?

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Re: Money still owed to Garlick

Post by FeedTheArf » Tue May 24, 2022 11:49 am

ClaretAndJew wrote:
Tue May 24, 2022 11:41 am
Pope. McNeil. Cornet. All saleable assets that should cover the Garlick situation.

Parachute payments for the rest.
I've seen a few people say things like this, that we can sell a few players and everything will be OK.

Firstly, those players will need to be replaced. Tarky is already gone, potentially Mee not far behind him. Cornet will likely go but with his clause we'd (at best) make a £5m profit on him split over x number of years. Pope will be out the door but if Hennessey can stay injury free I think he'd be good enough for the Championship with BPF as backup.

Secondly, if for example Pope gets a £20m move this summary and signs a 4 year deal, traditionally we would only get £5m a year for the next 4 years. If MSD and Garlick are scheduled to get their cash now, selling players isn't going to be the answer. Unless, that is, if we do what we did with the Wood deal and take out financing on future transfer installments in which case you actually get far less by the time the bank have taken their slice of the money.

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Re: Money still owed to Garlick

Post by NewClaret » Tue May 24, 2022 11:50 am

Thought it was pretty well understood that Garlick would get increased/full ownership back if we were relegated?

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Re: Money still owed to Garlick

Post by texasbrit » Tue May 24, 2022 11:53 am

very high liklihood we will actually end up in administration and points deducted before we kick another ball

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Re: Money still owed to Garlick

Post by ClaretAndJew » Tue May 24, 2022 11:53 am

NewClaret wrote:
Tue May 24, 2022 11:50 am
Thought it was pretty well understood that Garlick would get increased/full ownership back if we were relegated?
Not when relegated, if the money wasn't paid back in the timeframes stipulated.

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Re: Money still owed to Garlick

Post by KRBFC » Tue May 24, 2022 11:54 am

NewClaret wrote:
Tue May 24, 2022 11:50 am
Thought it was pretty well understood that Garlick would get increased/full ownership back if we were relegated?
That was rumoured, I guess we'll see, not that I think it will happen.

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Re: Money still owed to Garlick

Post by Jambo » Tue May 24, 2022 11:54 am

Only if ALK can't keep up with the payments to the old board.

Player sales will raise funds to an extent, especially if Cornet/Weghorst have release clauses as these fees are often paid up front (though the Wood one seems to be in instalments, which is unusual). But as noted, transfer fees are normally paid in chunks, just like when we have bought players we won't have paid the full amount.

It does make you wonder what cash flow will be like now.
Last edited by Jambo on Tue May 24, 2022 11:54 am, edited 1 time in total.

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Re: Money still owed to Garlick

Post by Aclaret » Tue May 24, 2022 11:54 am

Don't we get the tv share and prize money of roughly 100 million this season and the parachute payments begin next summer ?.......or am I miles away.

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Re: Money still owed to Garlick

Post by KRBFC » Tue May 24, 2022 11:55 am

ClaretAndJew wrote:
Tue May 24, 2022 11:41 am
Pope. McNeil. Cornet. All saleable assets that should cover the Garlick situation.

Parachute payments for the rest.
and where is the money for wages coming from?

money to replace the 8 out of contract?

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Re: Money still owed to Garlick

Post by ClaretAndJew » Tue May 24, 2022 11:56 am

FeedTheArf wrote:
Tue May 24, 2022 11:49 am
I've seen a few people say things like this, that we can sell a few players and everything will be OK.

Firstly, those players will need to be replaced. Tarky is already gone, potentially Mee not far behind him. Cornet will likely go but with his clause we'd (at best) make a £5m profit on him split over x number of years. Pope will be out the door but if Hennessey can stay injury free I think he'd be good enough for the Championship with BPF as backup.

Secondly, if for example Pope gets a £20m move this summary and signs a 4 year deal, traditionally we would only get £5m a year for the next 4 years. If MSD and Garlick are scheduled to get their cash now, selling players isn't going to be the answer. Unless, that is, if we do what we did with the Wood deal and take out financing on future transfer installments in which case you actually get far less by the time the bank have taken their slice of the money.
I know it isn't as easy as sell X to fund Y, but, if we are able to get the money up front, in the form of a loan, and use the annual payments from player sales to pay it off, then that's one thing resolved.

The purchasing of player sales can be done in a similar fashion. An abundance of clubs have debts, we're not unique, nor are we in as bad a situation as other's believe us to be. MY OPINION of course.

Time will tell, but I don't think we're going to be as bad off as people think.

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Re: Money still owed to Garlick

Post by ClaretAndJew » Tue May 24, 2022 11:57 am

KRBFC wrote:
Tue May 24, 2022 11:55 am
and where is the money for wages coming from?

money to replace the 8 out of contract?
Parachute payments, generated revenue and perhaps more small, manageable loans (we aren't the only club to have loans).

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Re: Money still owed to Garlick

Post by KRBFC » Tue May 24, 2022 11:57 am

ClaretAndJew wrote:
Tue May 24, 2022 11:56 am
I know it isn't as easy as sell X to fund Y, but, if we are able to get the money up front, in the form of a loan, and use the annual payments from player sales to pay it off, then that's one thing resolved.

The purchasing of player sales can be done in a similar fashion. An abundance of clubs have debts, we're not unique, nor are we in as bad a situation as other's believe us to be. MY OPINION of course.

Time will tell, but I don't think we're going to be as bad off as people think.
Clubs in loan generally have an owner with pockets capable of paying the loan, like Venkys at Bastards. We aren't in that position

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Re: Money still owed to Garlick

Post by jedi_master » Tue May 24, 2022 11:59 am

KRBFC wrote:
Tue May 24, 2022 11:55 am
and where is the money for wages coming from?

money to replace the 8 out of contract?
We won't be replacing the 8 out of contract with anything other than kids, loans (Pacey loves a loan) and freebies I'd imagine.

Cornet - £17.5m
Pope - £25m (sans anything Charlton may be due, if they have a sell on)
McNeil - £15m (unsure however if he will have any interest at this stage)

I think this will be the intention, plus a dip into parachute payments, to get rid of the MSD loan. Our wage bill will have been dramatically reduced by salary reductions from relegation alongside the wages of those being sold and released going away.

It's a sad state of affairs, but that is the reset we need I'd say - basically a total wipe away of any semblance of us being in the Premier League for the last six years. Weghorst also to be sold if anyone is willing to buy him, which I think unlikely (I hope we don't end up loaning him abroad for the rest of his contract, we need a sale or nothing IMO).

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Re: Money still owed to Garlick

Post by ClaretAndJew » Tue May 24, 2022 11:59 am

KRBFC wrote:
Tue May 24, 2022 11:57 am
Clubs in loan generally have an owner with pockets capable of paying the loan, like Venkys at Bastards. We aren't in that position
As said though, the repayments of that particular loan could be financed with the annual fees from the player sales of our biggest assets. We could likely generate 50 million in player sales (if not more).

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Re: Money still owed to Garlick

Post by KRBFC » Tue May 24, 2022 12:04 pm

ClaretAndJew wrote:
Tue May 24, 2022 11:59 am
As said though, the repayments of that particular loan could be financed with the annual fees from the player sales of our biggest assets. We could likely generate 50 million in player sales (if not more).
but where does money come from to run the club? if all the parachute payments are going to MSD and player sales are going to Garlick?

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Re: Money still owed to Garlick

Post by arise_sir_charge » Tue May 24, 2022 12:05 pm

This forum has become utterly tedious. For that reason, I’m out.
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Re: Money still owed to Garlick

Post by ClaretAndJew » Tue May 24, 2022 12:09 pm

KRBFC wrote:
Tue May 24, 2022 12:04 pm
but where does money come from to run the club? if all the parachute payments are going to MSD and player sales are going to Garlick?
The same place it came from when we were in the Championship before without any parachute payments.

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Re: Money still owed to Garlick

Post by gandhisflipflop » Tue May 24, 2022 12:09 pm

texasbrit wrote:
Tue May 24, 2022 11:53 am
very high liklihood we will actually end up in administration and points deducted before we kick another ball
There are some serious overreactions on this board
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Re: Money still owed to Garlick

Post by KRBFC » Tue May 24, 2022 12:10 pm

arise_sir_charge wrote:
Tue May 24, 2022 12:05 pm
This forum has become utterly tedious. For that reason, I’m out.
Serious questions and cause for concern, fans have a right to be worried right now. You may think it's tedious but Burnley's an important part of people's lives, maybe not yours.
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Re: Money still owed to Garlick

Post by RVclaret » Tue May 24, 2022 12:10 pm

gandhisflipflop wrote:
Tue May 24, 2022 12:09 pm
There are some serious overreactions on this board
:lol: :lol: It’s unbelievable
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Re: Money still owed to Garlick

Post by Burnley1989 » Tue May 24, 2022 12:21 pm

arise_sir_charge wrote:
Tue May 24, 2022 12:05 pm
This forum has become utterly tedious. For that reason, I’m out.
This threads one of the worst I’ve read, how do these people get out of bed in a morning 😂
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Re: Money still owed to Garlick

Post by KRBFC » Tue May 24, 2022 12:21 pm

RVclaret wrote:
Tue May 24, 2022 12:10 pm
:lol: :lol: It’s unbelievable
I mean to be fair, you were saying we'd be selling players and using the parachute payments to spend millions in the market and rebuilding to challenge for promotion :lol: I think you forgot debt even existed
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Re: Money still owed to Garlick

Post by agreenwood » Tue May 24, 2022 12:25 pm

Bout 50 threads need merging. Every new article or mention on Talksport gets a new thread.

Unless you enjoy wallowing, this board is borderline unreadable today.

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Re: Money still owed to Garlick

Post by kenyon6923 » Tue May 24, 2022 12:32 pm

Jambo wrote:
Tue May 24, 2022 11:54 am
Only if ALK can't keep up with the payments to the old board.

Player sales will raise funds to an extent, especially if Cornet/Weghorst have release clauses as these fees are often paid up front (though the Wood one seems to be in instalments, which is unusual). But as noted, transfer fees are normally paid in chunks, just like when we have bought players we won't have paid the full amount.

It does make you wonder what cash flow will be like now.

That's a interesting point as there's been a few posts stating the owners have/had to reschedule the payments back to Garlick which obviously means (if true/if a fact in the public domain) they have broken the original agreement in such a short space of time. IF they have had to reschedule then the decision to sack SD and adding a multi million pound "unexpected" pay off to the list is bizarre considering they did not have "their chosen guy" ready to step in (at least that would have been a worthwhile reason if nothing else)

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Re: Money still owed to Garlick

Post by NewClaret » Tue May 24, 2022 12:54 pm

kenyon6923 wrote:
Tue May 24, 2022 12:32 pm
That's a interesting point as there's been a few posts stating the owners have/had to reschedule the payments back to Garlick which obviously means (if true/if a fact in the public domain) they have broken the original agreement in such a short space of time. IF they have had to reschedule then the decision to sack SD and adding a multi million pound "unexpected" pay off to the list is bizarre considering they did not have "their chosen guy" ready to step in (at least that would have been a worthwhile reason if nothing else)
The most bizarre decision was the repurchase of the fans shares. That was a needless use of cash, if we were hard up.

Although the Dyche sacking and replacement with an inexperienced management team, is also questionable (in hindsight, of course, we could’ve been discussing a financial masterstroke).

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Re: Money still owed to Garlick

Post by NewClaret » Tue May 24, 2022 12:58 pm

kenyon6923 wrote:
Tue May 24, 2022 12:32 pm
That's a interesting point as there's been a few posts stating the owners have/had to reschedule the payments back to Garlick which obviously means (if true/if a fact in the public domain) they have broken the original agreement in such a short space of time. IF they have had to reschedule then the decision to sack SD and adding a multi million pound "unexpected" pay off to the list is bizarre considering they did not have "their chosen guy" ready to step in (at least that would have been a worthwhile reason if nothing else)
Just to add, ALK have previously denied that and payments had been missed/rescheduled.

The club’s chairman wrote on Twitter: “Off the back of some inaccurate reporting this morning I wanted to provide a response to reassure fans.”

A statement from Pace and board members Mike Garlick and John Banaszkiewicz read: “The conditions of the payment structure is a private matter between the three parties of ALK Capital, Mike Garlick and John Banaszkiewicz.

“However, we would like to confirm that every payment required as per the terms has been made on-time and in full, the future payment schedule remains in order and all parties have no concerns over the structure or the compliance to those terms.

“Our relationship is a part of a multi-year plan and we look forward to it continuing in a strong, positive manner.”

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Re: Money still owed to Garlick

Post by Sheedyclaret » Tue May 24, 2022 12:59 pm

KRBFC wrote:
Tue May 24, 2022 12:10 pm
Serious questions and cause for concern, fans have a right to be worried right now. You may think it's tedious but Burnley's an important part of people's lives, maybe not yours.
Serious questions yes which nobody on here has any answers to except just making things up..
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Re: Money still owed to Garlick

Post by Pommieclaret » Tue May 24, 2022 1:23 pm

You are assuming that we have had to stump up all of SD contract. I would think that given the speed of his sacking there is something that hasn't come to light as yet. I am assuming that it could be a lot less than the estimated 15 million his contract was allegedly worth



.

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Re: Money still owed to Garlick

Post by kenyon6923 » Tue May 24, 2022 1:36 pm

What is the major issue for Pace to come completely clean on the purchase of the club ? does he not realise is like a sword of Damocles hanging over them/supporters/the club. Its a permanent free stick for supporters/rival supporters/radio shows/social media to keep drumming this negativity around the club. If its terrible news then at least we can deal with truth instead of endless stories coming from all angles, look down the road at Rovers still the Venky fiasco hangs over their head and has done for the last 12 years.

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Re: Money still owed to Garlick

Post by claretonthecoast1882 » Tue May 24, 2022 1:37 pm

On the plus side we are only 3 years away from being non league.

We can have a cup run in the FA Vase, most have wanted a good cup run for the last few years. Providing we survive as a club over the 12 months.
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Re: Money still owed to Garlick

Post by Newcastleclaret93 » Tue May 24, 2022 1:41 pm

Not sure which page to post it on but for anyone interested Kieran Maguire has just don’t a 10 minute interview on BBC Lancashire about the state of our finances.

It’s worth a listen, I found it be quite balanced and caring about the community.

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Re: Money still owed to Garlick

Post by JohnMac » Tue May 24, 2022 1:45 pm

I don't own money in the millions, I don't owe the Club anything so am not concerned because it isn't my problem. If we were asset stripped and went under I would be as pi**ed off as the next fan but it won't affect my actual life beyond finding something else to do and I have plenty of options.

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Re: Money still owed to Garlick

Post by Vegas Claret » Tue May 24, 2022 2:09 pm

KRBFC wrote:
Tue May 24, 2022 11:40 am
Still paying transfer fees to Lyon and Stoke.

Still paying MSD interest.

Still paying up Dyche and the staff.

Still need to pay players and staff wages.
didn't Stoke still owe a large portion of the money for Vokes ?
We don't know how much we are paying Dyche etc but it sure wont be anything like their full wage for the length of contract

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Re: Money still owed to Garlick

Post by dsr » Tue May 24, 2022 2:12 pm

NewClaret wrote:
Tue May 24, 2022 12:58 pm
Just to add, ALK have previously denied that and payments had been missed/rescheduled.

The club’s chairman wrote on Twitter: “Off the back of some inaccurate reporting this morning I wanted to provide a response to reassure fans.”

A statement from Pace and board members Mike Garlick and John Banaszkiewicz read: “The conditions of the payment structure is a private matter between the three parties of ALK Capital, Mike Garlick and John Banaszkiewicz.

“However, we would like to confirm that every payment required as per the terms has been made on-time and in full, the future payment schedule remains in order and all parties have no concerns over the structure or the compliance to those terms.

“Our relationship is a part of a multi-year plan and we look forward to it continuing in a strong, positive manner.”
I don't think that's a denial that payments have been rescheduled. I don't doubt that the payments are in line with the terms currently in force between Pace and Garlick, but it could be that the terms have been renegotiated and that statement would still be true.

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Re: Money still owed to Garlick

Post by dsr » Tue May 24, 2022 2:14 pm

NewClaret wrote:
Tue May 24, 2022 12:54 pm
The most bizarre decision was the repurchase of the fans shares. That was a needless use of cash, if we were hard up.

Although the Dyche sacking and replacement with an inexperienced management team, is also questionable (in hindsight, of course, we could’ve been discussing a financial masterstroke).
My best guess would be that Pace et al only had 84% of the club and wanted to get it over 90% because that gives them a lot more power. Specifically, it gives the power to compulsorily purchase the other 10%. This might make it easier to pursue this foreign investment.

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Re: Money still owed to Garlick

Post by warksclaret » Tue May 24, 2022 2:18 pm

I have been told by someone close to a PL cub, that when managers get fired they dont instantly get their contract honoured. HE believes its written into contracts that 6 months is paid fairly instantly as they walk out the door, as its felt they can get a new managers job in that period. Otherwise how much money would people like Merino and Ranieri have earned. May be different at Burnley, depending on the shrewdness of Alan Pace and his legal team

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Re: Money still owed to Garlick

Post by joey13 » Tue May 24, 2022 2:19 pm

gandhisflipflop wrote:
Tue May 24, 2022 12:09 pm
There are some serious overreactions on this board
Just been relegated with the biggest debt in the club’s history,if you’re not worried you’re not a fan .

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Re: Money still owed to Garlick

Post by NewClaret » Tue May 24, 2022 2:22 pm

kenyon6923 wrote:
Tue May 24, 2022 1:36 pm
What is the major issue for Pace to come completely clean on the purchase of the club ? does he not realise is like a sword of Damocles hanging over them/supporters/the club. Its a permanent free stick for supporters/rival supporters/radio shows/social media to keep drumming this negativity around the club. If its terrible news then at least we can deal with truth instead of endless stories coming from all angles, look down the road at Rovers still the Venky fiasco hangs over their head and has done for the last 12 years.
I think this is a very reasonable question. I know some will argue that he shouldn’t need to, others don’t, it’s commercially sensitive, he already has reassured fans previously and then extreme paranoia sets in anyway, etc. There’s truth in all those arguments.

But equally I can’t see how allowing the current press and speculation is helpful for his asset/investment, and, if we’ll “all come to love what they do”, why some more transparency on what’s what wouldn’t actually be a positive thing.

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Re: Money still owed to Garlick

Post by FCBurnley » Tue May 24, 2022 2:29 pm

I know it’s a freaking mess. And to think we used to laugh at Venkys !!

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Re: Money still owed to Garlick

Post by NewClaret » Tue May 24, 2022 2:37 pm

dsr wrote:
Tue May 24, 2022 2:12 pm
I don't think that's a denial that payments have been rescheduled. I don't doubt that the payments are in line with the terms currently in force between Pace and Garlick, but it could be that the terms have been renegotiated and that statement would still be true.
Well it says every payment has been made on time and in full and the future schedule remains in order. I agree that might be in relation to an amended payment profile, if you were so minded to perceive it negatively, but if opportunities to renegotiate the schedule were inserted in the deal and ultimately accepted by all parties, I struggle to see why any fan would be concerned about it.

Either way, the concept payments have been delayed is robustly denied by the parties involved - no disrespect to CP, whose knowledge and analysis I greatly admire, but I’m inclined to believe the statement made by those closest to it.

I think the key issue here is that ALK agreed to buy an asset for £170+m that was worth far less in the event of relegation, so I’m pretty sure they would not have signed up to that without protecting themselves from overpaying in the event of relegation. They won’t be paying £170m now. And possibly not even what’s been paid to date if we stay down as there may even be clauses where some shares are automatically repurchased (changing the ownership but injecting cash in to the club) in these scenarios.

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Re: Money still owed to Garlick

Post by gandhisflipflop » Tue May 24, 2022 2:37 pm

joey13 wrote:
Tue May 24, 2022 2:19 pm
Just been relegated with the biggest debt in the club’s history,if you’re not worried you’re not a fan .
If I’m not worried I’m not a fan? Seriously? I think saying we will be in administration before a ball is kicked next season is hyperbole ********. I’m prepared to wait and see what happens before worrying. They need time, but some fans are too thick to see it.
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Re: Money still owed to Garlick

Post by bf2k » Tue May 24, 2022 2:53 pm

gandhisflipflop wrote:
Tue May 24, 2022 2:37 pm
I think saying we will be in administration before a ball is kicked next season is hyperbole ********.
While unlikely we’ll enter administration it is a possible route if all debts can’t be serviced on time. Let’s be honest the capital risk to ALK is relatively small. The vast majority of the risk is on Burnley Football Club.

Something I don’t get about Garlick and co coming back, why would they? If the reported debt is £102m off which £65m is owed to them that still leaves £67m to be paid which new owners (in this theoretical case Mike Garlick) would then need to service.
Last edited by bf2k on Tue May 24, 2022 2:56 pm, edited 1 time in total.

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Re: Money still owed to Garlick

Post by tiger76 » Tue May 24, 2022 2:55 pm

texasbrit wrote:
Tue May 24, 2022 11:53 am
very high liklihood we will actually end up in administration and points deducted before we kick another ball
No we won't we'll sell a few to cover the outgoings, and have to rely on freebies and some of the kids, but although our income has drastically dropped so will our wage bill to make up for the shortfall with a lot of the higher earners exiting.

Don't me wrong things aren't great, but it won't be as bad as many predict, and we'll likely have to adjust to being a middling Championship club again for the foreseeable future.

I certainly don't expect any big signings coming through the door this summer though, and this is where the new manager will need to play clever in the market and possibly scour the lower leagues to pick up a few bargains, but that's a strategy we should have already been pursuing anyway, buy relatively cheap and then sell on for a profit.

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Re: Money still owed to Garlick

Post by KRBFC » Tue May 24, 2022 2:57 pm

gandhisflipflop wrote:
Tue May 24, 2022 2:37 pm
If I’m not worried I’m not a fan? Seriously? I think saying we will be in administration before a ball is kicked next season is hyperbole ********. I’m prepared to wait and see what happens before worrying. They need time, but some fans are too thick to see it.
Time for what? we are thick for not seeing it? enlighten us....

I'm asking the question, you seem to have the answers, so give them to us.

I think saying we'll be in admin before a ball is kicked is ott, I don't think having concerns for the future is a bad thing. Valid concerns.

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Re: Money still owed to Garlick

Post by dsr » Tue May 24, 2022 3:11 pm

bf2k wrote:
Tue May 24, 2022 2:53 pm
While unlikely we’ll enter administration it is a possible route if all debts can’t be serviced on time. Let’s be honest the capital risk to ALK is relatively small. The vast majority of the risk is on Burnley Football Club.

Something I don’t get about Garlick and co coming back, why would they? If the reported debt is £102m off which £65m is owed to them that still leaves £67m to be paid which new owners (in this theoretical case Mike Garlick) would then need to service.
Some of your figures have got a bit twisted round.

The £102m is the amount that Alan Pace and his investors owe to Burnley Football Club. They don't have any assets so they can't repay it. Unless we get back into the PL, that money is as good as lost. (It has risen to at least £112m during the past 10 months.) We don't get any interest from Mr Pace for lending him this money.

The £65m is the amount that Burnley FC borrowed to lend to Mr. Pace. This is Burnley FC's liability, just like any bank loan, and it is irrelevant what Pace, Garlick, or any other shareholder does - Burnley FC has to pay this back. We do pay interest, currently about 10% p.a.

The £67m is an estimate. It was said at the time Pace bought the shares that about £50m? £60m? something like that, was still owed by Pace to Garlick and friends, and that amount would be paid later. That's the specific loan this thread is all about. We don't know if Pace still owes it to Garlick, or if some of it has been paid, or if it doesn't now need paying. We were told that part of the share sale was that Garlick would get the shares back if Pace didn't pay the £50-£60m.

If Garlick takes the shares back, he doesn't have to repay the loan himself. He can keep all the money he has got out of the club; that loan is the club's liability, not Garlick's, even if he once again owns the club. The directors and shareholders aren't liable for the club's debts except in very exceptional circumstances - that's limited liability, it's what makes a limited company.
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