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Proposals that could have saved Saints
THIS is the letter Leon Crouch first sent to Saints back on October 28, 2008.
At that time the club had played almost a third of their Championship fixtures and bagged 13 points from 14 matches.
That put them third from bottom, two points adrift of Barnsley and Charlton.
Crouch’s solictor, Mark Shephard, sent the following letter to Saints.
Dear Sirs, RE: SOUTHAMPTON FOOTBALL CLUB LTD (SFC) We act for Mr Leon Crouch.
We are instructed to write to you to set out formally the various matters that have been discussed informally.
Specifically, we have been instructed to propose that our client is willing to enter into a loan arrangement with SFC in the sum of £2 million, such loan to remain outstanding for an unlimited period, subject to repayment as and when SFC is in sufficient funds to make any such repayment or a significant investor is found.
You will, no doubt, appreciate that this is a very generous offer but one which my client considers necessary given the current finances of SFC and is made to ensure the financial stability of SFC until such time as an investor is found.
This offer is conditional on satisfaction of the following: 1. Messrs Rupert Lowe and Michael Wilde each entering into identical loan agreements, in the same terms as that to be entered into by my client, including as regards quantum and repayment terms; 2. Michael Wilde to resign as chairman of SFC; 3. My client to be reinstated as chairman of SFC and to be reinstated as a director of Southampton Leisure Holdings Plc; 4. Rupert Lowe to retain his position as chairman of Southampton Leisure Holdings plc, albeit that he shall continue to have no involvement on football matters; 5. That the management team of Jan Poortvliet and Mark Wotte are relieved of their duties.
Any compensation payable to these individuals as a result of this action to be paid by Rupert Lowe and Michael Wilde in their personal capacities.
For the avoidance of doubt, no such compensatory payments are to be made by SFC or any other group company; 6. A new manager to be approved by the board of SFC and with experience of the English system to be appointed as soon as practicable.
A copy of this letter will be sent to Richard Fry of Barclays Bank plc.
Please acknowledge receipt of this letter. Given the matters raised by this letter a response within seven days of receipt is requested.
Yours faithfully, Shoosmiths solicitors Shoosmiths received a letter back from Saints’ financial advisors Seymour Pierce dated November 4.
That read as follows ...
Dear Sirs, RE: Southampton Leisure Holdings plc (SLH) Seymour Pierce Limited acts as the Nominated Adviser and broker to SLH.
We are writing to response to your letter dated 28 October 2008 in which you set out the terms under which your client, Mr Leon Crouch, is prepared to enter into a loan arrangement to inject £2 million into Southampton Football Club (SFC).
The Board of SLH (‘the Board’) has carefully considered Mr Crouch’s offer and has discussed this offer with its relevant professional advisers.
Whilst the Board appreciates the offer from Mr Crouch, the c o n d i t i o n s attached to the offer are u n a c c e p t - able in their current form.
The Board is however keen to explore the possibility of Mr Crouch providing a loan to SFC and wish to make it very clear that it is willing to enter into ongoing negotiations to this end.
The Board has asked me to convey their thanks to Mr Crouch for his continued support and interest in Southampton Football Club.
Yours faithfully, Paul Davies For and on behalf of Seymour Pierce Limited.
Acting on behalf of Crouch, Shoosmiths wrote again, this time to Seymour Pierce, on November 11.
That letter was as follows ...
Dear Sirs, SOUTHAMPTON LEISURE HOLDINGS PLC (SLH) Thank you for your letter of 4 November in relation to SLH replying to our letter of 28 October sent to Mr Rupert Lowe.
We note that the terms of Mr Crouch’s offer to advance loan finance to SLH are not acceptable as presented but that the Board of SLH remains keen to explore the possibility of loan finance being provided by Mr Crouch to Southampton Football Club (SFC).
From his previous tenure as a director of SLH and chairman of SFC, Mr Crouch is all too aware of the financial pressures being faced by SFC.
Falling attendances and the club’s struggling position in the League are likely to be making an already difficult financial position more so.
Mr Crouch remains willing to discuss the terms on which he may provide loan finance to SFC and while the terms set out in our letter of 28 October appear not to be acceptable they indicate clearly his approach on this matter.
We look forward to hearing from you as regards terms that you may be willing to put forward.
Yours faithfully, Shoosmiths CC Mr Leon Crouch As results failed to improve, Crouch became increasingly concerned for Saints and in January sought a meeting with Lowe and Wilde to discuss his proposals.
The meeting was held at St Mary’s on the morning of Friday, January 23.
That date is significant because Jan Poortvliet resigned as Saints head coach later that afternoon.
Were the two events linked in any way?
Crouch arrived at the meeting armed with a copy of the agenda he had drawn up in conjuction with his solicitor AGENDA Meeting with the Board of Southampton Leisure Holdings plc (the ‘Company’).
1. Background The Company and Southampton Football Club (SFC) have been performing poorly, both on and off the pitch. Actions need to be taken urgently if the Company is to avoid further reductions in revenue and p o s s i b l e a d m i n i s - t r a t i o n and if SFC is to avoid relegation.
2. Purpose The purpose of the meeting is to discuss the terms on which Leon Crouch may be willing to advance funds to the Company and changes to the manner in which the Company and SFC are run.
3. Items for Discussion (a) As a condition of Leon Crouch advancing any new money to the Company/SFC, both Rupert Lowe and Michael Wilde must advance new money at the same time and on the same terms.
The amounts and the terms on which monies may be received by the Company/SFC are to be discussed.
(b) Chairman of SFC: - Resignation of Michael Wilde as Chairman and director of SFC: - Appointment of Leon Crouch as Chairman/CEO of SFC with terms of reference agreed with the Board of the Company.
(c) Responsibility for management and operation of SFC and the players (as opposed to the running of the Company).
(d) Football manager – new manager to be appointed.
(e) Appointment of Leon Crouch to the Board of the Company.
(f) Sale by Michael Wilde of his shares in the Company?
(g) Rupert Lowe to continue as Chairman of the Company.
Following that meeting, Seymour Pierce again wrote to Crouch’s solicitor.
That letter is as follows ...
Dear Mark, RE: Southampton Leisure Holdings plc (SLH) Thank you very much to both you and Mr. Crouch for coming in to see the Board of SLH this morning.
The Board would like me to express their gratitude to Mr. Crouch for his offer of financial assistance to SLH at this time.
However, the conditions attached to Mr. Crouch’s loan put forward to the Board remain unacceptable.
The Board does not feel that Mr.
Crouch’s offer provides the Company with a workable solution to resolve its current financial issues.
To ensure there has been no misunderstanding, I set out our understanding of the main conditions attached to Mr. Crouch’s offer of a loan: (a) Mr. Crouch’s loan must be matched by an identical loan from Rupert Lowe. Michael Wilde is able to participate but his participation is not a condition of the loan; (b) Mr. Crouch is to be appointed Chairman of Southampton Football Club (‘the Club’) and is offered a seat on the Board of SLH; (c) A manager with suitable experience of the English football league is appointed prior the Club’s next league match; and (d) Rupert Lowe is to devote his time to seeking new finance for SLH.
Whilst Mr. Crouch declined the offer at the meeting, the Board reiterates its willingness to consider an alternative proposal, which is supported by the appropriate proof of funds, whereby Mr. Crouch finances SLH without assistance from any members of the current Board and has the right to both remove the current Board (either in full or in part) and appoint his own board.
Yours faithfully, Paul Davies, For and on behalf of Seymour Pierce Limited
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