[overseas baggie]

"despite the fact that it is against the law" - why is it against the law to take dividends from a profitable company ?

It’s very simple - a company can only declare and pay a dividend out of available distributable profits.  If those profits have already been distributed then they are not available to distribute until further profits have been made.  We don’t have significant distributable profits left (the previous profits had been distributed around the time when Peace sold to Lai).

[baggiejohn]

It’s very simple - a company can only declare and pay a dividend out of available distributable profits.  If those profits have already been distributed then they are not available to distribute until further profits have been made.  We don’t have significant distributable profits left (the previous profits had been distributed around the time when Peace sold to Lai).

I take your point, but this season (2018/09) our operating costs will be significantly lower, & although the revenue will also be lower, It's possible for us to show a pretty decent profit at the end of the season,
Given the scenario you painted, wouldn't it be possible to take a significant sum out as profit to off-set his losses & then sell the club for less than he paid for it?

[overseas baggie]

I take your point, but this season (2018/09) our operating costs will be significantly lower, & although the revenue will also be lower, It's possible for us to show a pretty decent profit at the end of the season,
Given the scenario you painted, wouldn't it be possible to take a significant sum out as profit to off-set his losses & then sell the club for less than he paid for it?

Our revenue will be lower and our costs will be lower and the net result may well be either a modest profit or a loss (depending on what risk approach is taken).  However, if we sell loads of players to raise say £100m then there would only be a sizeable profit if we replace them with players costing next to nothing or even free transfers, but the size of the profit wouldn’t be quantified until the audited accounts are prepared for the year ended 30th June 2019 (ie early 2020).  Large dividends could not be safely declared until then, so a very unlikely scenario.

He can’t take out a profit (dividend) until after the profits have actually been confirmed. Realistically it would take 3/4 years to get his money back if he then sold the club for £100m (half what he paid for it). 

His best option is to invest wisely in getting us promoted within 2 years so that the club can be sold for close to what he paid for it.

[AlbionBest]

Silence is golden from him !

What's his aims, his plan ?

[Mo]

Silence is golden from him !

What's his aims, his plan ?

If it was my investment i would be showing far more interest . He barely came last season so he’s hardly going to rock up against Rotherham . As an owner I feel he needs to be far more hands on but I don’t think the interest is there .

[baggie82]

Just to put the ongoing turmoil of last eight months in context:

Manager sacked - Nov 17
Chairman sacked - Feb 2018
Chief executive sacked - Feb 2018
Manager sacked - April 2018
Director of football resigned - April 2018
Upgrade to training ground cancelled - May 2018
Chief of medical staff resigned - June 2018
Scouts left - TBC
Technical director sidelined - June 2018

Anything I've missed out?

[darbolina]

I'd compare him to randy Lerner so far unfortunately . We're still in a mess and lacking leadership. Can't help but think we need an owner who at least has a passing interest in the club ?!

[Aztech]

I'd compare him to randy Lerner so far unfortunately . We're still in a mess and lacking leadership. Can't help but think we need an owner who at least has a passing interest in the club ?!

Tony Xia took over from Lerner and has had a big interest in their club 

[darbolina]

Common theme between Lai and Xia is they both have no experience on the football side and both plumped for old school British managers who spunked loads of cash on mediocrity or worse !

Any good leader knows their limitations and surrounds themselves with top people in the right places!

Meanwhile Wolves owners enlisted the help of one of most connected and knowledgable agents in the game to help mould their football side of the club - that's good leadership

[zippyandbungle]

Common theme between Lai and Xia is they both have no experience on the football side and both plumped for old school British managers who spunked loads of cash on mediocrity or worse !

Any good leader knows their limitations and surrounds themselves with top people in the right places!

Meanwhile Wolves owners enlisted the help of one of most connected and knowledgable agents in the game to help mould their football side of the club - that's good leadership

This is well put and a very good point
However many earlier on this thread have claimed the chairman is about to assert strip (no proof), has been taking money (he hasn't) and the best one...he doesn't care ( are we expecting an invite twice weekly for faggots chips n peas, so he can let us know exactly how he's running his business?)

[BB74]

It’s such a myth that Directors/Chairman doesn’t care etc.

They have a personal fiduciary duty and can be imprisoned if they do not follow law as set out by companies house.

[Droitwich Baggie]

It’s such a myth that Directors/Chairman doesn’t care etc.

They have a personal fiduciary duty and can be imprisoned if they do not follow law as set out by companies house.

What does that mean in English?

[liverbaggie]

It means trust between a trustee and beneficiary.
He has obligations to adhere to in company law,this is only from memory so I stand corrected.

[WorcsWBA]

What does that mean in English?

In this context it means they are entrusted to take care of the club's money in an appropriate way and are legally responsible to do so.

[darbolina]

Think Peace needs to let Lai have a copy of his moneyball dvd (baseball film which inspired Peace to bring in Ashworth etc and to ultimately realise you need to do something different to others to get ahead when you don't have loadsa £££$.

Start again with a strong innovative DoF who has good connections and rebuild properly instead of this short term Chelsea lite approach which will fail again and again

[Atomic]

With Lai getting rid of half the staff at the club and that idiot Pardew I expected by now that we'd be looking settled behind the scenes, all pulling in the right direction and progressing nicely with our rebuild. How wrong can you be?

Rebuild - What bloody rebuild? So far we've released a few players - all correctly released (IMO) and that's it. Not one signing, not one imminent as far as I can see. We've had the usual glut of rumours that you get at this time of the year but nothing else. We don't have an assistant head coach STILL! How long does it take?

We have two senior pro's behaving like twelve year olds.

What the hell is going on? It's an absolute shambles and it cannot be allowed to carry on like this. The new season is only five weeks away.

We need some very strong leadership from the owner now, he needs to bang heads, make hard decisions and get this club back onto some sort of track.

[royhan]

With Lai getting rid of half the staff at the club and that idiot Pardew I expected by now that we'd be looking settled behind the scenes, all pulling in the right direction and progressing nicely with our rebuild. How wrong can you be?

Rebuild - What bloody rebuild? So far we've released a few players - all correctly released (IMO) and that's it. Not one signing, not one imminent as far as I can see. We've had the usual glut of rumours that you get at this time of the year but nothing else. We don't have an assistant head coach STILL! How long does it take?

We have two senior pro's behaving like twelve year olds.

What the hell is going on? It's an absolute shambles and it cannot be allowed to carry on like this. The new season is only five weeks away.

We need some very strong leadership from the owner now, he needs to bang heads, make hard decisions and get this club back onto some sort of track.

Good public relations is paramount in any successful business. At our club it is non existent. Surely there should be some positive statement coming out of the club just to keep the fans in the loop. It doesn't have to go into details. At present most fans are feeling depressed at what is going on at the club.

[baggiejohn]

Good public relations is paramount in any successful business. At our club it is non existent. Surely there should be some positive statement coming out of the club just to keep the fans in the loop. It doesn't have to go into details. At present most fans are feeling depressed at what is going on at the club.

I believe things are happening so fast at the club, it's impossible to make a statement.

From an outsider looking in, we appear to be out of control.

I just hope this rumour about Michael Appleton is true, by making the assistant Heat Coach appointment, at least the club will be able to demonstrate that some progress is being made.
There does appear to be some positive links with players this morning, so maybe our recruitment process is not as far behind as we think.

I agree though, we do need something reassuring to demonstrate that the management are back in control.

[Norfolk Baggie]

So I see no signs of this happening yet, but it would be possible for Lai to take cash out of the club.  The obvious way of doing this is to sell and reclaim some, but not all of his investment cash given the depreciation in WBA as an asset since his purchase.  The other way would be to sell assets, generating cash which could then be paid via a dividend.  The owners of Blackpool operated this process to take cash out and decimate the club. The sale of four or five key players could generate 80 million and still leave the club in the middle of the championship potentially. 

Personally I wish JP was still at the helm.  He had a very sound business acumen, understood football, and had some loyalty to the club- accepting that finance was always the major driver. 

[tuamigos]

I believe things are happening so fast at the club, it's impossible to make a statement.

From an outsider looking in, we appear to be out of control.

I just hope this rumour about Michael Appleton is true, by making the assistant Heat Coach appointment, at least the club will be able to demonstrate that some progress is being made.
There does appear to be some positive links with players this morning, so maybe our recruitment process is not as far behind as we think.

I agree though, we do need something reassuring to demonstrate that the management are back in control.

Ha ha, that's the best comment on here today 

[overseas baggie]

So I see no signs of this happening yet, but it would be possible for Lai to take cash out of the club.  The obvious way of doing this is to sell and reclaim some, but not all of his investment cash given the depreciation in WBA as an asset since his purchase.  The other way would be to sell assets, generating cash which could then be paid via a dividend.  The owners of Blackpool operated this process to take cash out and decimate the club. The sale of four or five key players could generate 80 million and still leave the club in the middle of the championship potentially. 

Personally I wish JP was still at the helm.  He had a very sound business acumen, understood football, and had some loyalty to the club- accepting that finance was always the major driver.

Not correct.

If Lai was to sell the club then he wouldn’t “be taking money out of the club”.  He’d be taking money from the buyer, which is not the same thing at all.

As I pointed out in an earlier post, if a load of players were sold and the cash not reinvested in players, then the proceeds of those player sales could only be taken out as dividends once there are confirmed distributable reserves (ie audited net profits as per the accounts), and it would take many years of profits to get back his £200m. 

[baggiejohn]

Ha ha, that's the best comment on here today 

Perhaps the word should have been changing then 

[paulosull]

With Evans and Foster gone for combined fee of 7 million and Mcclean rumoured to be9 leaving for 6 million could Moore be hamstrung in transfer market with regards to players with release clauses? Rondon 16.5 million, chadli 18 million and Hegazi 10 million. Combine those players with Dawson and Rodriguez who we'd except bids of 20 million each the first team would be stripped to pieces. Lai could be laughing all the way to the bank with in excess of 90 million pounds on player sales and high earners of wage bill.

[CanadaBaggieEh!]

Even if the money went directly to him (which it doesn't), I'm still not sure he'd be laughing as he'd still be £110,000,000 in the hole, and without investing that money back into player there's very little hope of getting that remainder back.

With Evans and Foster gone for combined fee of 7 million and Mcclean rumoured to be9 leaving for 6 million could Moore be hamstrung in transfer market with regards to players with release clauses? Rondon 16.5 million, chadli 18 million and Hegazi 10 million. Combine those players with Dawson and Rodriguez who we'd except bids of 20 million each the first team would be stripped to pieces. Lai could be laughing all the way to the bank with in excess of 90 million pounds on player sales and high earners of wage bill.

[chipperclark]

Just to put the ongoing turmoil of last eight months in context:

Manager sacked - Nov 17
Chairman sacked - Feb 2018
Chief executive sacked - Feb 2018
Manager sacked - April 2018
Director of football resigned - April 2018
Upgrade to training ground cancelled - May 2018
Chief of medical staff resigned - June 2018
Scouts left - TBC
Technical director sidelined - June 2018

Anything I've missed out?

yes the tea lady wanted a pay rise of 10p and didn't get it so she  left.