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Gary
13-05-2005, 14:20:36
Just wondered about this - obviously pertaining to UK law.

Never understood law, often it seems to be totally out of synch with gut feeling as to what is right or wrong, but ...

This is from the BBC news site about the Man Utd takeover bid.

Many fear that ticket prices will soar, and ultimately Mr Glazer will delist United from the London Stock Exchange and transfer to the club all the debts he took on to finance the deal.Is it right, and how can it be justified, that after taking over a company one can just dump one's personal debts onto it ?

The quote seems to imply one can force the company to pay for itself and you get off scot free !

Funko
13-05-2005, 14:26:04
It's a really common thing. A leveraged buyout.

http://www.investopedia.com/terms/l/leveragedbuyout.asp


Not that much different from you borrowing money for a house and securing the loan against the house.

King_Ghidra
13-05-2005, 14:41:28
first lurker decides to be the new dyl, now funko

Lazarus and the Gimp
13-05-2005, 14:45:40
Originally posted by Gary


[FONT=times new roman][SIZE=3]Is it right, and how can it be justified, that after taking over a company one can just dump one's personal debts onto it ?

The quote seems to imply one can force the company to pay for itself and you get off scot free !


If he takes the club into his sole ownership, he can do so, After all, if the club goes bankrupt it'll be Glazer's loss.

Greg W
13-05-2005, 14:47:56
So there's no limited liability on business ownership over there? Here, owners are not necessarily liable for all debts of a company, even if they started it, financed it, and so on. The company can go into insolvency while the owner remains rich as, as long as he can't be proven to have siphones funds from the company...

Aka, the owner is not necessarily liable for the debts of the company...

MDA
13-05-2005, 14:49:02
FDR would be proud.

Funko
13-05-2005, 14:51:20
Simple answer - yes there is limited liability if you form a limited company.

There are unlimited forms as well though.

Greg W
13-05-2005, 14:56:19
Oh, ok.

That's about as far as my knowledge of business liability stretches, so I'll sit back and watch from now on. :lurk:

King_Ghidra
13-05-2005, 14:57:04
screw that, get drunk and post shit

MDA
13-05-2005, 14:57:25
You posting bastards ruined my New Dyl joke.

Greg W
13-05-2005, 15:02:33
Originally posted by King_Ghidra
screw that, get drunk and post shit Nah, it's midnight now, not going to start drinking now. The sweet oblivion of sleep calls...

Gary
13-05-2005, 15:17:01
OK I see what's being said here, but it hardly fits in with my idea of fair play.

leveraged buyout A strategy involving the acquisition of another company using borrowed money (bonds or loans). The acquiring company uses its own assets as collateral for the loan in hopes that the future cash flows will cover the loan payments.But that's a bit different isn't it ? Or am I getting confused over the reference to "cash flows" ? It's one thing to hope you eventually make enough money on an investment to cover what you paid for it. In that case the debt is still your personal one. It just seems wrong to be able to wash your hands of all the debt and dump it on the company.

If he takes the club into his sole ownership, he can do so, After all, if the club goes bankrupt it'll be Glazer's loss.

Ok... But it's the company that goes bankrupt, not Glazier, which is the thing I'm uneasy about. It seems to be a risk free investment so long as he manages the inital buyout (a bit sticky if he doesn't granted). What does Glazer lose if the debts are no longer his, except face ?

King_Ghidra
13-05-2005, 15:24:10
fair play? are you crazy, this is capitalism mofo?!

anyway, the point presumably is that glazer's assets are worth more than his debt? just as with a house, if i can't keep up my repayments, i don't just lose face i lose my home.

Funko
13-05-2005, 15:30:48
Yeah, at the moment the debts are guaranteed against HIS assets but if he gets 75% he can transfer them to HIS new asset, Manchester United.

Venom
13-05-2005, 15:57:08
You've just got to be eating this story up.

Funko
13-05-2005, 16:00:11
You should check the sports forum.

Venom
13-05-2005, 16:02:09
I don't belong there. It's too English.

Funko
13-05-2005, 16:02:31
FOLIOATED!

Venom
13-05-2005, 16:09:14
Right. So I'll type with an English accent. I'll put on my X10 pompous modifier and get on with it.