Wasps 22 Discussion Threads

[fastcat99] 25/8/2022 12:48

RE Trustee's attitude to action on Insolvency, and further to my executive summary #929, here is some text [just slightly redacted for clarity and brevity] from the email I received this morning

"In relation to our position regarding enforcement....at the current time the Trustee does not intend to take any steps to enforce the terms of the Transaction Documents... unless directed by the requisite amount of bondholders and indemnified and/or secured and/or pre-funded to its satisfaction.

"Obviously it is difficult to speculate about how that position may change in the future given the situation is a dynamic one, but the Trustee would act in accordance with the Trust Deed and specifically the relevant instruction thresholds within it. As you note, there are circumstances in which the Trustee MAY consider unilateral action and the example which you mentioned ["if the Issuer were to declare insolvency or be placed under administration"] was given by way of illustration. For the avoidance of doubt, the example was not provided as a guaranteed course of action in that hypothetical circumstance, but as an illustration of a potential circumstance where the Trustee MAY consider such unilateral action appropriate. The Trustee will continue to act in accordance with the Trust Deed at all times..."

Griffith's careful language may provoke further cynical despair, but he really cannot express himself any other way;
@bigfish1 re your "Anything else would be truly negligent" - I/he couldn't possibly comment !!

[fastcat99] 25/8/2022 12:22

Relisting - arguments in favour

1. Relisting is to meet an OBLIGATION of the Financial Covenants; it is not a 'nice to have' OPTION. The exact manner and timing of the Delisting is (inexcusably) still obscure, but it remains one of the Issuer's most serious Breaches to date. The Trustee has stated as much in its Notices.

2. A listing can't do any harm, and will offer three sorts of benefit
- Nobody has to sell who doesn't want to, but it offers the *ONLY PROMPT WAY* OUT for Bondholders who NEED (some) Capital immediately, or those who simply despair of this
I think it utterly unfair to tie such people to the mast of a complicated and financially uncertain Enforcement process; and *re Time scales*: "I have the distinct impression that" it would take MANY MONTHS, to raise funds by Enforcing the Security.
- Even IF a Vulture Fund, or even some Party directly interested in possessing the Stadium Lease, were to sweep up a significant holding, that will simply accelerate the enforcement process which you seem to prefer
- It provides an objective, public, live commentary on the state of affairs far more widely followed than any amount of Bulletin Board posting ! :)

3. OF COURSE, the PRIOE will be hugely discounted, as WAS1 is very-distressed stock; but that does nothing to undermine the VALUE (which continues to lie EXCLUSIVELY in the Security and the payment of Interest Coupons).
This is such an elementary point, but I still feel many readers here don't quite get it.

4. Finally don't forget that ORB Bonds are traded 'dirty': ie sale proceeds MUST include Interest (pro rata to that day) in addition to the actual bid price, no matter how measly that may be.

[bigfish1] 25/8/2022 12:18

I certainly had always assumed that they would act in the case of insolvency or administration of the issuer. Anything else would be truly negligent. I just think that might be too late. For a start, if ACL is declared insolvent before the Trustees take ownership, the lease could in theory be forfeit. I didn't say the Trustees had no experience, I'm sure they have lots, but not with retail bond defaults because they don't seem to have a protocol for communicating with the retail bondholders and they don't seem to understand that execution only brokers don't pass on clearstream notices.

[1bondinvestor] 25/8/2022 10:57

[e-mail] advised me that he sent a notice to the clearing system dated 22nd August stating that he had been contacted by a number of bond investors who wished to contact other bond investors. Those who agree to their contact details being shared are requested to contact Laurence with proof of their investment by the 26th August. Even if proof is not currently available I suggest consent is given as a matter of urgency. There is clearly a need for a register of holders.

Recent events indicate that statements issued by Wasps must be treated with caution. I remain doubtful whether there was ever a realistic prospect of the bonds being refinanced. Investors must therefore rely on the security given for the loan.

Relisting the bonds will solve nothing. The quotation is likely to be nominal for small amounts of stock whilst I anticipate the price will represent a sizeable discount on the net asset.

[fastcat99] 25/8/2022 10:54

re Powers and Attitude of Trustee - exec summary

1. (Assuming 'finance' in bigfish1 #927 to refer to Trustee's fees) I agree absolutely with first two sentences there: recently in this forum, the FALSE impression has been growing that Trustees won't act unless somehow paid in advance.
2. (IMPORTANT clarification on 3rd and 4th sentences there) While Trustees can only be OBLIGED to act by the requisite majorities (10%,25%), they DO have powers to act on their OWN initiative, and in some some circumstances, they may even feel legally obliged to do so. I have the distinct impression from my conversation with them yesterday, that if Wasps were to declare insolvency or be placed under administration, the Trustees WOULD [be minded to] act immediately and unilaterally. (I have just now received the response I mentioned #914, so I have added 'a politician's qualification' in square brackets !}
3. Contrary to your final sentence, they insist they have a great deal of experience, and that the provisions in the Prospectus re. relations/responsibilities of Trustee/Bondholders (inc majorities) are absolutely standard.
4. Wasps 6.5% has two special features which set it above run-of-the-mill retail bonds - the OBLIGATION to be listed on ORB, and the SECURITY against 'fixed' assets (the Lease and maybe the P Shares). Nothing has yet undermined the Security, and the Listing should be restored ASAP.

[bigfish1] 25/8/2022 09:58

The sticking point being that they have no way of communicating with the Bondholders. I'm away this weekend but if nothings happened by Monday I think I'll set up a website for bondholders and try to get it publicised. Hopefully we can get a quorum that way. Incidentally Fastcat99, the quorum at the 2020 meeting sounds extremely fishy. Why would CFD holders vote, they only hold investments for a short time? No one can sell now so what Bondholders there are, are fixed so no monkey business possible.

[bigfish1] 25/8/2022 09:50

I don't think the finance is the major sticking point. They can take money from the proceeds of the sale of assets, they rank above us, as does HMRC. The sticking point is that they insist it is not in their power to take action without instruction from the Bondholders. They risk being sued later if they do. They need to be able to prove that they were instructed by a quorum of Bondholders. They don't seem to have understood the way retail bonds work.

[pusb] 25/8/2022 08:22

Big fish 1 - will the Trustees actually do anything without being financed upfront, as they keep saying that is required?

[pusb] 25/8/2022 08:19

It looks like a 35 points deduction if insolvency declared after the fixtures have been announced, as opposed to relegation if announced before that point. However, if insolvency was in reality unavoidable before release of fixtures, relegation seems to be back in the cards (I.e. insolvency has been deliberately delayed/ manipulated which does seem to be the case with Wasps).

A 35 point deduction when the league is ring-fenced ( no relegation on basis of position in the league) doesn’t seem all that punitive).

[dandigirl] 25/8/2022 07:59

First game 11 Sept! Ugh! Some days away.

[bigfish1] 25/8/2022 07:51

I do agree that i'm not sure forcing liquidation is in our best interests. It may be, it would help if Wasps would come up with some sort of an offer. I thik they are trying to delay it until Wasps play their first game of the season because if they become insolvent before then they will be booted out of the league (or something like that - can anyone clarify). This would be a big financial hit for them and may not be in our best interests.

[nelliereb] 25/8/2022 06:00

The longer they can drag this out the more chance the stadium will only be worth half the £35m Richardson and his cronies will then snap it up and be laughing all the way to the bank. The more this fiasco continues the more it looks like it was their plan all along I for one will do everything in my power to stop these crooks.

[pusb] 25/8/2022 05:47

Have the RFU even been “imformed̶1; of the default?

[nelliereb] 25/8/2022 05:23

I to agree with the last few posts Richardson and his band of crooks are taking us for mugs. They are using the fact that most of us are small investors in the great scheme of things. It is a complete disgrace that they are fart arsing about and never contact us they seem to be ring fencing what is owed to them & sod the rest of us.
The RFU should never of allowed Wasps to compete in the new season but of course like Richardson they are only interested in lining there own pockets.

[fastcat99] 24/8/2022 17:51

I very much agree with the general sense of the previous three posts - #911-913 - maybe I remain more hesitant than grahamg8 about whether, or when, we should actually trigger Enforcement, but we must certainly prepare for that step early on and that means trying to create a bondholder group with critical mass.

I had a lengthy conversation with the Trustee (LG) earlier this afternoon; just waiting for his written signoff before I post the key points here.

I PERSONALLY fear we may not see the Consent Solicitation actually published in the next 7 days, but Wasps Finance is surely aware this commitment cannot be postponed too long
- for one thing, the whole process is very unlikely to be any quicker than in 2020, when it was launched on 6 October and only completed on 12 November
- in my judgment, 13 November 2023, the next due date for interest payments, is the one unmovable milestone.

[grahamg8] 24/8/2022 17:12

Oktopus a success fee only solicitor would solve the problem of being organised and providing funds. Yes we would lose part of our claim but I think that would be preferable to being given the runaround by Richardson. Others have posted serious questions about how some of the bond money has been siphoned off, outside the envelope of the Wasps Group, and hence not now available to repay us.

I can't help feeling that insolvency may be the best option for us, unless a very sensible offer is forthcoming. By sensible I mean one that we like and squeezes as much as possible out of the business(es). At the end of the day I don't give a fig about the survival of Wasps rugby or where they play. I want all of my money, and failing that the maximum amount that can be recovered. Everyone else can go to hell. Demolish the stadium and build houses, anything will be considered.

[oktopus_ken] 24/8/2022 16:20

I have been thinking the same myself.

An action group needs to be organised. It is uusually the big bondholders who start this off.

The trustee will only act if requested by 25% of the bondholders and is provided with funds. This means that a lot of organisation is required, and a treasurer and other officers must be appointed to collect and manage bondholders contributions to the legal costs.

This is a big responsibillity for whoever takes this on.

[bigfish1] 23/8/2022 16:06

Thank you Fastcat99, really interesting post.