Lord Bracknell
On fire
The irony is that the club are insisting that DK pays a substantial part of the costs of the legal process that they alone have started.
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Dick Knight Share Dispute - Unnamed Director offer £0.01 per share
- Thread starter jamie the seagull
- Start date
- Aug 8, 2005
- 26,588
Well, as he has reminded everyone in his post, he did help draw up the articles, so that says it all really.....
- Aug 8, 2005
- 26,588
I think you very well know that Dick started this by offering his shares to fans when he needed to offer them to his fellow shareholders first.
Missed your post, agree 100%
Not really. Dick started it with the gimmicky offer.
Lord Bracknell
On fire
The costs that the Club are incurring in stopping DK selling these shares are greater than the administrative costs of allowing the sale to go ahead.
This smacks of vindictiveness, not prudence.
Buzzer
Languidly Clinical
- Oct 1, 2006
- 26,121
My understanding is this:
Dick Knight gained most of the shares from converting cash loans to the company into equity shares (as have most other shareholders). When Dick Knight sold the majority of his shares to Tony Bloom, Bloom paid him at face value - well over any market value for them and so Dick Knight got the majority of his loan back. At no time prior to this did DK or any other shareholder expect to get a penny back from these loans. No other shareholder has ever been repaid for their loan in the same way as TB did with DK.
DK still held onto a relatively small amount of shares, I think about 100k and offered them to fans at a £1 each. If DK sells the shares to fans then he gets all his money back (or most anyway). Other shareholders are a little upset about this and one in particular is exercising his right to buy any shares offered to sale before they go on general sale. He (or she) feels that all the shareholders were in it together and it's now very unfair for DK to get all his money back when the rest sit there with worthless shares. I also understand that it isn't any club policy that is stopping DK but this one shareholder in particular who is acting completely legally and within his rights.
It's a real shame it has come to this with shareholder against shareholder but I can't help but feel that DK must take a lot of the blame here for not informing the other shareholders first as he was required to do and for deliberately pitching the fans against the Board when it should be an internal issue. I also think he's being mischievous by offering them to fans now when he had ample opportunity to do this as Chairman. I do, however, understand why he feels such enmity against the current Board especially the actions regarding AITC.
It's a mess for sure - but it's not the club trying to stitch up DK but rather one shareholder (and it's a moot point certainly from his point of view whether it's a stitch-up) and DK is certainly not blameless in this.
Dick Knight gained most of the shares from converting cash loans to the company into equity shares (as have most other shareholders). When Dick Knight sold the majority of his shares to Tony Bloom, Bloom paid him at face value - well over any market value for them and so Dick Knight got the majority of his loan back. At no time prior to this did DK or any other shareholder expect to get a penny back from these loans. No other shareholder has ever been repaid for their loan in the same way as TB did with DK.
DK still held onto a relatively small amount of shares, I think about 100k and offered them to fans at a £1 each. If DK sells the shares to fans then he gets all his money back (or most anyway). Other shareholders are a little upset about this and one in particular is exercising his right to buy any shares offered to sale before they go on general sale. He (or she) feels that all the shareholders were in it together and it's now very unfair for DK to get all his money back when the rest sit there with worthless shares. I also understand that it isn't any club policy that is stopping DK but this one shareholder in particular who is acting completely legally and within his rights.
It's a real shame it has come to this with shareholder against shareholder but I can't help but feel that DK must take a lot of the blame here for not informing the other shareholders first as he was required to do and for deliberately pitching the fans against the Board when it should be an internal issue. I also think he's being mischievous by offering them to fans now when he had ample opportunity to do this as Chairman. I do, however, understand why he feels such enmity against the current Board especially the actions regarding AITC.
It's a mess for sure - but it's not the club trying to stitch up DK but rather one shareholder (and it's a moot point certainly from his point of view whether it's a stitch-up) and DK is certainly not blameless in this.
symyjym
Banned
Agree, they are only a token shares anyway. There are lots of fans out there who put a lot of time into saving and supporting the club during the wilderness years and had it not been for them there would be no Amex regardless of TB.
The club should at least explain why they don't want this to happen otherwise it just looks like greed is an overwhelming factor and reveals a disconnect with the fans.
Gritt23
New member
Things have changed somewhat since then.
Don't forget he did also draw them up at a time when we would NEVER have a majority shareholder again. That had to change before we could get the investment we needed. Suffice to saw, he wouldn't have envisaged a situation where our Board would be pulling stunts like this against one another.
Perhaps Dick should have read the rules regarding selling shares first then? I'd imagine the club could take legal action seeing as he went about this completely the wrong way.
Gritt23
New member
Not sure he has done anything in contravention of the Articles.
He has merely garnered the level of interest from fans. There is no legal "offer" in place to fans, whereby they could "accept" and form a legally binding contract.
The most interesting thing that DK said in the radio interview was that in addition to the unnamed shareholder Director having offered 1p/share, there is also (according to DK) another shareholder (but not a Director) was has offered to but 100k shares off DK at £1/share.
If DK does insist that the independent valuation by the auditors goes ahead (for which DK pays 25% and the other 75% is presumably picked up by the the buying shareholder and the club - perhaps 25%, 50% respectively?), the new offer will really put the cat among the pigeons in terms of getting a value.
It would be relatively easy for the auditors to argue that the value of the shares is way under £1 (which, under any normal valuation model, it most definitely is) if the offerors of £1 (the 270 fans) are joe public and are thus unqualified to pass judgement on the fair value of the shares. It will be much harder for the auditors to make that argument if an existing shareholder (who will not be considered joe public) also offers £1.
DK was pretty critical of the fact that the unnamed Director was unnamed. He didn't proffer the name of the shareholder who has offered £1. C'mon Dick - who is it?
If DK does insist that the independent valuation by the auditors goes ahead (for which DK pays 25% and the other 75% is presumably picked up by the the buying shareholder and the club - perhaps 25%, 50% respectively?), the new offer will really put the cat among the pigeons in terms of getting a value.
It would be relatively easy for the auditors to argue that the value of the shares is way under £1 (which, under any normal valuation model, it most definitely is) if the offerors of £1 (the 270 fans) are joe public and are thus unqualified to pass judgement on the fair value of the shares. It will be much harder for the auditors to make that argument if an existing shareholder (who will not be considered joe public) also offers £1.
DK was pretty critical of the fact that the unnamed Director was unnamed. He didn't proffer the name of the shareholder who has offered £1. C'mon Dick - who is it?
Lord Bracknell
On fire
DK wrote the rule, to protect the interests of the fans, not to offer an opportunity to the directors to play silly games like this one.
- Aug 8, 2005
- 26,588
It is standard in every company I know for the articles to state that existing shareholders have to offer their shares to other shareholders before offering them to others. A company would be nuts not to have this. The club are not doing anything wrong. It is just sensible corporate governance.
Buzzer
Languidly Clinical
- Oct 1, 2006
- 26,121
My guess: 1p offer is from Derek Chapman, the £1 offer from Norman Cook. I'm only guessing here though. I've not been told who the other shareholders who made offers are.
- Aug 8, 2005
- 26,588
I'm sorry LB but you're making out that this is some great thing that DK did to protect the club but it really isn't. it is a completely standard position that 99.99% of companies in existence will have.
Maybe not, but I still don't think it's particularly wise to start trying to find fans to buy the shares before other behind the scenes processes are yet to take place.
Gritt23
New member
Agreed. I'm merely responding to the inference that it is somehow Dicks fault for having drafted the Articles in this way, when he should have worded it such that this situation was avoided.
seagullsovergrimsby
#cpfctinpotclub
DK is a marketing guru , do you honestly think from the outset he would garner enough interest from the fans to purchase his ENTIRE shareholding at £1 a share taking into consideration how diluted it was ? He would have a strong argument if the fans wanted to buy ALL his shares at a pound each and then a director was only prepared to pay a penny each for them.