Letter to shareholders

[stringer]

The Star will never print anything remotely insightful of this, just a summary headline of “Kev and the Prince are having a battle over SUFC” and a few lines following; it will upset their relations with the Club too much.

Or that it’s libellous and defamatory, you choose

 

[Revolution]

Or that it’s libellous and defamatory, you choose

You can quote liberally from the judgment without any fear of libel or defamation.

 

[Sean Thornton]

The judgment says that Sheffield United Limited (a) owns the Lane and the Academy and (b) is a subsidiary of the Scarborough group, owned and controlled by McCabe and his family.

The point I was (perhaps clumsily) trying to make is that this company is on the McCabe side, not the Prince's side, of the ownership structure.

Bearing in mind that some will pick up on any scraps on here it could be read as McCabe scooping up everything personally. While he could see lots if cash, it's almost impossible for him to see a profit, selling the ground or not, as he transferred £30 odd million of debt to shares.

 

[stringer]

You can quote liberally from the judgment without any fear of libel or defamation.

And we have. The new stuff isn’t in the judgement

 

[Chali 2na]

And we have. The new stuff isn’t in the judgement

 

[Dronfield Blade]

I would summarise the underlying dispute as follows:

1. Each party (let’s call them McCabe and the Prince for convenience, though there are corporate vehicles used) owns 50% of the company that owns the club. McCabe is the sole owner of the company that owns the Lane and the Academy. The Prince paid 10 million quid for his stake.
   
   
   
2. The relationship between the two sides is governed by an agreement which has the following provisions in it

(a) Control of the club is to be shared equally – no one has a casting vote. If there is deadlock, either side can serve a notice on the other offering to buy their shares at a certain price. The other side may accept this offer or offer to buy the offeror’s own shares at the same price (in which case the offeror is bound to sell them). Such offers for purchase of shares can also be made at other times.

(b) The club cannot borrow over 25 grand without both sides’ approval.

(c) If either shareholder gets more than 75% of the share capital of the company that owns the club, then that company is obliged to by the Lane and the Academy from the McCabe company that owns them (currently they are rented on long leases at a low rate). This would be at market value, so the property owning company, ie McCabe, would make a lot of cash from this.

3. The parties fell out and by the end of 2017, McCabe wanted to end the relationship and was even prepared to give up his involvement in the club. Hence McCabe served a notice offering to buy the Prince’s shares for 5 million pounds. This is a low price. McCabe expected the Prince to serve a notice offering to buy him out at the same price, but he thought this would be fine because Prince would then have to buy the property, worth 20 million quid.

4. The Prince did indeed offer to buy McCabe’s shares for 5 million – but before doing so, he transferred 80% of his own shares to a different company than the one that was party to the agreement. Hence he claimed that he would not own more than 75% and would not have to buy the properties [this situation could, I think, have been prevented with better drafting, but I don’t know whether this was considered at the time].

5. If the Prince is right, he gets the club and long term leases on the ground and academy at a cheap rate.

6. McCabe feels he has been tricked.

7. The proceedings involve:

• A claim by the Prince that McCabe should honour the agreement and sell the shares
  
  
• A claim by McCabe that he does not have to sell the shares and, alternatively, that he can buy the Prince’s shares and, failing that, that the Prince has to buy the properties.

The bit that is most important to us – funds for the team – is a sideshow. There was a disagreement as to whether funds were needed, how much was needed, and the basis on which it can be put in. McCabe sought an order that the Prince be compelled to lend the club 1.25 million (with McCabe lending the same). This application failed.

There are loads of interesting things in there about the background to the dispute and the club’s financial position, but I will leave others to say something about that.

This post, adding the few corrections/notes that have been pointed out by other members should be pinned above the general blades chat.

Brilliant summary.

 

[Revolution]

Bearing in mind that some will pick up on any scraps on here it could be read as McCabe scooping up everything personally. While he could see lots if cash, it's almost impossible for him to see a profit, selling the ground or not, as he transferred £30 odd million of debt to shares.

Fair enough, but that's not really relevant to the summary of the dispute.

 

[Deaneandagana]

Fair enough, but that's not really relevant to the summary of the dispute.

Can you summarise the details of the Charwell loan?

Thanks in advance

 

[snootyfenooty]

Can you summarise the details of the Charwell loan?

Thanks in advance

It's something along the lines of:

You owe Mate A twenty quid but don't have the money
Mate B gives you the £20 to repay Mate A
You say thanks to Mate B, I'll pay you later
Mate B says forget it, buy me a pint sometime.

Grace and favour, nothing to see in this.

 

[Bladeloyal]

It's a fucking shambles.

That's what you've gleaned from all this

 

[Harrisblade]

It looks to me like the Prince wants to get the club to the premiership and then probably sell at a massive profit ... why else would he be trying to get control of the club as cheap as possible without the assets... he would rather invest his cash in chasing the big money of the premier league than buying a ground etc that the club can use anyway on a very favourable lease.

His tactics in getting there seem underhand but so do McCabes and the main worry is that the team is dismantled and we are relegated whilst the court case is on going

It would be disastrous for the McCabes but I don't think it would be the worst thing for the club if the prince takes ownership...

Not sure why you think McCabes tactics are underhand?

 

[LoughboroBlade]

Given the very recent history in Saudi Arabia of various royal family members being arrested on suspected embezzlement, money laundering, and bribery, it’s not an accusation that should be loosely thrown about by McCabe’s camp. Is there anything in the allegation that suggests what he is supposed to have bribed Abdullah to do?

 

[stringer]

Given the very recent history in Saudi Arabia of various royal family members being arrested on suspected embezzlement, money laundering, and bribery, it’s not an accusation that should be loosely thrown about by McCabe’s camp. Is there anything in the allegation that suggests what he is supposed to have bribed Abdullah to do?

No

 

[Hamburg Blade]

It's something along the lines of:

You owe Mate A twenty quid but don't have the money
Mate B gives you the £20 to repay Mate A
You say thanks to Mate B, I'll pay you later
Mate B says forget it, buy me a pint sometime.

Grace and favour, nothing to see in this.

Unless Mate A is, say, a politician who needs everything to be above board and can't be associated with any underhand dealings.
You are, say, a policeman in a high up position.
Mate B says forget it, your position could be useful to me one day, let's just say you owe me a favour.

That is, as I understand it, the gist of the problem.

 

[Drunk blade]

Not sure why you think McCabes tactics are underhand?

Seems a bit like he had taken the prince for a fool and tried to bully him and now its all going wrong he is throwing about allegations of bribes etc in the hope of prolonging the proceedings ...

 

[Sean Thornton]

That's what you've gleaned from all this

 

[Sean Thornton]

Seems a bit like he had taken the prince for a fool and tried to bully him and now its all going wrong he is throwing about allegations of bribes etc in the hope of prolonging the proceedings ...

?

 

[56yearsablade]

I would summarise the underlying dispute as follows:

1. Each party (let’s call them McCabe and the Prince for convenience, though there are corporate vehicles used) owns 50% of the company that owns the club. McCabe is the sole owner of the company that owns the Lane and the Academy. The Prince paid 10 million quid for his stake.
   
   
   
2. The relationship between the two sides is governed by an agreement which has the following provisions in it

(a) Control of the club is to be shared equally – no one has a casting vote. If there is deadlock, either side can serve a notice on the other offering to buy their shares at a certain price. The other side may accept this offer or offer to buy the offeror’s own shares at the same price (in which case the offeror is bound to sell them). Such offers for purchase of shares can also be made at other times.

(b) The club cannot borrow over 25 grand without both sides’ approval.

(c) If either shareholder gets more than 75% of the share capital of the company that owns the club, then that company is obliged to by the Lane and the Academy from the McCabe company that owns them (currently they are rented on long leases at a low rate). This would be at market value, so the property owning company, ie McCabe, would make a lot of cash from this.

3. The parties fell out and by the end of 2017, McCabe wanted to end the relationship and was even prepared to give up his involvement in the club. Hence McCabe served a notice offering to buy the Prince’s shares for 5 million pounds. This is a low price. McCabe expected the Prince to serve a notice offering to buy him out at the same price, but he thought this would be fine because Prince would then have to buy the property, worth 20 million quid.

4. The Prince did indeed offer to buy McCabe’s shares for 5 million – but before doing so, he transferred 80% of his own shares to a different company than the one that was party to the agreement. Hence he claimed that he would not own more than 75% and would not have to buy the properties [this situation could, I think, have been prevented with better drafting, but I don’t know whether this was considered at the time].

5. If the Prince is right, he gets the club and long term leases on the ground and academy at a cheap rate.

6. McCabe feels he has been tricked.

7. The proceedings involve:

• A claim by the Prince that McCabe should honour the agreement and sell the shares
  
  
• A claim by McCabe that he does not have to sell the shares and, alternatively, that he can buy the Prince’s shares and, failing that, that the Prince has to buy the properties.

The bit that is most important to us – funds for the team – is a sideshow. There was a disagreement as to whether funds were needed, how much was needed, and the basis on which it can be put in. McCabe sought an order that the Prince be compelled to lend the club 1.25 million (with McCabe lending the same). This application failed.

There are loads of interesting things in there about the background to the dispute and the club’s financial position, but I will leave others to say something about that.

I would summarise the underlying dispute as follows:

1. Each party (let’s call them McCabe and the Prince for convenience, though there are corporate vehicles used) owns 50% of the company that owns the club. McCabe is the sole owner of the company that owns the Lane and the Academy. The Prince paid 10 million quid for his stake.
   
   
   
2. The relationship between the two sides is governed by an agreement which has the following provisions in it

(a) Control of the club is to be shared equally – no one has a casting vote. If there is deadlock, either side can serve a notice on the other offering to buy their shares at a certain price. The other side may accept this offer or offer to buy the offeror’s own shares at the same price (in which case the offeror is bound to sell them). Such offers for purchase of shares can also be made at other times.

(b) The club cannot borrow over 25 grand without both sides’ approval.

(c) If either shareholder gets more than 75% of the share capital of the company that owns the club, then that company is obliged to by the Lane and the Academy from the McCabe company that owns them (currently they are rented on long leases at a low rate). This would be at market value, so the property owning company, ie McCabe, would make a lot of cash from this.

3. The parties fell out and by the end of 2017, McCabe wanted to end the relationship and was even prepared to give up his involvement in the club. Hence McCabe served a notice offering to buy the Prince’s shares for 5 million pounds. This is a low price. McCabe expected the Prince to serve a notice offering to buy him out at the same price, but he thought this would be fine because Prince would then have to buy the property, worth 20 million quid.

4. The Prince did indeed offer to buy McCabe’s shares for 5 million – but before doing so, he transferred 80% of his own shares to a different company than the one that was party to the agreement. Hence he claimed that he would not own more than 75% and would not have to buy the properties [this situation could, I think, have been prevented with better drafting, but I don’t know whether this was considered at the time].

5. If the Prince is right, he gets the club and long term leases on the ground and academy at a cheap rate.

6. McCabe feels he has been tricked.

7. The proceedings involve:

• A claim by the Prince that McCabe should honour the agreement and sell the shares
  
  
• A claim by McCabe that he does not have to sell the shares and, alternatively, that he can buy the Prince’s shares and, failing that, that the Prince has to buy the properties.

The bit that is most important to us – funds for the team – is a sideshow. There was a disagreement as to whether funds were needed, how much was needed, and the basis on which it can be put in. McCabe sought an order that the Prince be compelled to lend the club 1.25 million (with McCabe lending the same). This application failed.

There are loads of interesting things in there about the background to the dispute and the club’s financial position, but I will leave others to say something about that.

 

[Sean Thornton]

Question for Pinchy

KMc offers to buy the Princes shares for £5m. The Prince in turn says no, I'll buy yours. As there is no acceptance of Kevin's offer, does that mean that the offer is now off the table?

 

[I should coco]

Seems a bit like he had taken the prince for a fool and tried to bully him and now its all going wrong he is throwing about allegations of bribes etc in the hope of prolonging the proceedings ...

On top of his many faults, he also an imperialist and knows all foreigners are much inferior to us and are all fools.

He's never done a deal in Hungary, or China or Australia ever and only ever does property deals in the S2 area. This is why his leg was so easily lifted.

Another Blades anti-KM 'fact'.

 

[ShockingBadBuy]

Question for Pinchy

KMc offers to buy the Princes shares for £5m. The Prince in turn says no, I'll buy yours. As there is no acceptance of Kevin's offer, does that mean that the offer is now off the table?

Interpretation offered in Post #199 by Revolution suggests not? (I think) (?)

a) Control of the club is to be shared equally – no one has a casting vote. If there is deadlock, either side can serve a notice on the other offering to buy their shares at a certain price. The other side may accept this offer or offer to buy the offeror’s own shares at the same price (in which case the offeror is bound to sell them). Such offers for purchase of shares can also be made at other times.

 

[Maidenhead]

I have also read all the 4 documents available via the link made available by the McCabe solicitors . Whilst the contents contain the usual excesses of litigation there are a few certainties contained within the papers .

- McCabe lost this first legal “round “ comprehensively

- The Prince 100 per cent tricked Mcabe via his covert dilution of his holding in his original acquiring vehicle ,

However the above and all the other mudsligimg between the two pale in to insignificance compared to the following fact which emerges from the papers ;

CHRIS WILDER WAS LIED TO WHEN HE WAS TOLD THAT BOTH OWNERS HAD AGREED AN UPLIFT TO HIS TRANSFER BUDGET THE PRINCE NEVER AGREED THIS AND MCCABE SIMPLY WINGED IT PRESUMEABLY TO CAJOLE CHRIS TO COMMIT AND SIGN HIS NE DEAL

Our Manager “ is nobody’s Patsy “ get ready for the worst case scenario and remember the reason why all this dreadful dirty washing is out in the public domain is because McCabe would not match the Princes offer of “gifting “ £1,5M of working capital , McCabe insisted it had to be a loan ,

Even if there was a transfer budget why would any player with ambition join this shambles of a situation

I'm sure that Wilder has stated on more than one occasion that HE has spoken to both the owners.

Rather negates your highlighted assertion.

 

[Revolution]

Question for Pinchy

KMc offers to buy the Princes shares for £5m. The Prince in turn says no, I'll buy yours. As there is no acceptance of Kevin's offer, does that mean that the offer is now off the table?

The Court will decide that.

McCabe's primary position is that he is not obliged to sell now. His fall back position is that he can buy the Prince's shares and, if that point also goes against him, his further fall back is that he must sell but the Prince must buy the Properties. Plus he claims damages as a final fall back.

 

[Sean Thornton]

Interpretation offered in Post #199 by Revolution suggests not? (I think) (?)

a) Control of the club is to be shared equally – no one has a casting vote. If there is deadlock, either side can serve a notice on the other offering to buy their shares at a certain price. The other side may accept this offer or offer to buy the offeror’s own shares at the same price (in which case the offeror is bound to sell them). Such offers for purchase of shares can also be made at other times.

Thanks SBB. How is this affected by the offer originally being for ALL 50% of UTBs shares when HRH "knew" he didn't have 50% to sell. The offer was for something that wasn't available, which McCabe didn't know.

Why would those terms apply when McCabe couldn't buy enough shares to gain control? HRH appears to have made on offer for 50^. Something McCabe couldn't achieve as it turned out.

 

[Sothall_Blade]

It looks to me like the Prince wants to get the club to the premiership and then probably sell at a massive profit ... why else would he be trying to get control of the club as cheap as possible without the assets... he would rather invest his cash in chasing the big money of the premier league than buying a ground etc that the club can use anyway on a very favourable lease.

His tactics in getting there seem underhand but so do McCabes and the main worry is that the team is dismantled and we are relegated whilst the court case is on going

It would be disastrous for the McCabes but I don't think it would be the worst thing for the club if the prince takes ownership...

Except a future where Prince owns Sheffield United and the McCabes own Bramall Lane and The Academy would be disastrous.
The McCabes will understandably not want to a spend a penny on improving or maintaining either Bramall Lane or The Academy.
Forget any improvements to The Kop or a spanking new South Stand Extension, we'll be lucky to get a lick of paint on the burger kiosk.

Then you have the so-called "long lease on favourable terms"
The long lease is only for 25 years and who knows when that lease started and when it will end?
What happens after the 25 years is up or maybe sooner?
Do we think the McCabes will just grant The Prince (or whoever) another 25 year lease at favourable rates?

We could find ourselves in a Coventry type situation where the club can't or won't be able to pay for the privilege of playing at Bramall Lane.
Any scenario where the club and the property are owned by warring factions is surely a bad thing.

Partly for that reason, I'm now coming down on the side of McCabe as Prince has got the opportunity to fully takeover but is trying to manoeuvre his way out of it. Seemingly with no concern for what happens in the long-term.

 

[56yearsablade]

Good summary but a couple of thoughts from my reading of it.
1) £20 m is not the value of the assets, its a nominal sum equivalent to the sum of the £10 m they each put in initially and also equivalent to the difference between the value of the assets with current cheap leases and full market value leases. Suggests the value of the assets is perceived to be well above £20 m but there's not much else a person can do with a football ground so value is what someone will pay for it.
2) After the first £10 m they each put they were obliged to match each others future cash injections but it appears Mr Invisible started to lapse on this from around 2016 by £1.6 m which is what started the whole disagreement.
After I read all the docs posted yesterday I came to the opinion one of the parties is a nasty untrustworthy thing trying to get the club on the cheap and showing all the characteristics of an asset stripper just in it for profit and nothing else.
The idea that person has loads of dosh and is just waiting in the wings to invest seems a nonsense to me as he had the chance to buy the club for £5m plus asset value but chose not to and now seems to be trying to get it on the cheap through any means. The tricks being used make me feel sick but are not a surprise having worked with similar from the region.
Interesting how in that region the king has been detaining people in hotels for dodgy dealings so I can only assume the guy is well connected and immune or the king doesn't know about where the signs are pointing re the loan.
I can understand why the party being slowly stitched up would only want to loan and not gift money as he is probably concerned he might lose the bigger case.
In short were screwed for years as I can't see either backing down any time soon and the really daft thing is Mr Invisible could see his investment fall to zero if we get relegated after all this.

There are a number of excellent posts around this subject of which this is one however like all the rest the pivotal fact that this omits is embedded in the court papers which is that Wilder was lied to regarding the fact that both owners had agreed to an "uplifted" transfer budget. The likely reality before him "taking matters to the brink via his media comments" was that Wilder had been given no transfer budget whatsoever for the Summer and then post his media threats he was advised that £2M had been "agreed" which clearly it had not. He will not tolerate this for 18 weeks never mind 18 months . His departure will herald the worst outcomes we all know that - why do the owners not understand the certainty of decline without CW ??

 

[ShockingBadBuy]

Thanks SBB. How is this affected by the offer originally being for ALL 50% of UTBs shares when HRH "knew" he didn't have 50% to sell. The offer was for something that wasn't available, which McCabe didn't know.

Why would those terms apply when McCabe couldn't buy enough shares to gain control? HRH appears to have made on offer for 50^. Something McCabe couldn't achieve as it turned out.

... looks like it could be the key question?

As usual, the main winners in this will be m’learned friends.

 

[Maidenhead]

It looks to me like the Prince wants to get the club to the premiership and then probably sell at a massive profit ... why else would he be trying to get control of the club as cheap as possible without the assets... he would rather invest his cash in chasing the big money of the premier league than buying a ground etc that the club can use anyway on a very favourable lease.

His tactics in getting there seem underhand but so do McCabes and the main worry is that the team is dismantled and we are relegated whilst the court case is on going

It would be disastrous for the McCabes but I don't think it would be the worst thing for the club if the prince takes ownership...

Can you give us an example of McCabes underhand tactics?

 

[Sean Thornton]

The Court will decide that.

McCabe's primary position is that he is not obliged to sell now. His fall back position is that he can buy the Prince's shares and, if that point also goes against him, his further fall back is that he must sell but the Prince must buy the Properties. Plus he claims damages as a final fall back.

As SBB posted, the summary suggests McCabe has to sell now the Prince has made the counter offer. McCabes offer was for 50%. The Prince says UTB no longer holds 50%, so how can the Prince be making the same offer as McCabe?

 

[Revolution]

As SBB posted, the summary suggests McCabe has to sell now the Prince has made the counter offer. McCabes offer was for 50%. The Prince says UTB no longer holds 50%, so how can the Prince be making the same offer as McCabe?

I see your point. This is an issue that the Court will have to consider.