CFSS BOARD MINUTES
Chesterfield
Minutes of the Special CFSS Board meeting
Held Wednesday 25th October 2006, 7:30pm
Venue: CFC Boardroom
Present: P.Tooley, P.Taylor, J.Croot, D.Bowler, R.Willett, P.Whiteley, M.Cook, A.Fantom, C.Young, I.Browes, R.Pearson, A.Haywood
Apologies: none
Secretary: R.Busby
1. Purpose of the Meeting
1.1 The meeting was called to consider the proposal made by the CFC Board (on 19th October) with regard to changes to the ownership structure, funding arrangements, and future management of the Football Club.
1.2 It was agreed that the format of the meeting would be:
· Each CFSS member to give a brief outline of their view of the proposal
· Debate
· Next steps
2. Summary of CFSS Board Member views
2.1 All agree that:
· the proposal had been stated clearly,
· there is no alternative on the table at present, and none in view,
· in the absence of an alternative, and on the basis that ground relocation is a desirable objective for both CFC and CFSS Boards, the proposal must be given serious consideration.
2.2 a range of concerns were expressed and debated as they arose, (where answers were offered during the meeting the response is shown in italics):
· have all the facts been made known? - Full disclosure is essential to an informed decision;
· does this proposal effectively allow the current CFC board to obtain ownership of the Club at unreasonably low cost or low risk to themselves;
· would the proposal be a good deal if the projected debt was nil?
· who will provide the additional Board investment? (each current CFC Board member will inject approx equal amounts - PRT);
· what is the difference between ordinary and preference shares? (preference shareholders receive priority dividends whereas ordinary shareholders do not, preference shareholders can only redeem their shares at term, and in the event of wind-up of the business, after the Crown and debenture holders, preference shareholders have priority for repayment over ordinary shareholders);
· preference shares are still liabilities on the balance sheet. Does the proposal inject enough risk capital into a deal that will result in a new stadium with an asset vale of £10M+?
· how will the new CFC Board be made up (PRT said the proposal is that the current CFC Board will continue, PRT will been invited to join that Board, CFSS will have one representative) At this point PRT declared that he intends to stand for re-election to the CFSS Board at the next CFSS AGM - but if elected he would not be the CFSS representative on a new CFC Board);
· will CFC be able to choose the CFSS representative?
· Would any potential new investor offering say £250,000 be able to get a seat on the CFC Board?
· What would prevent a CFC Board member selling their shares to a person or persons whose objectives were not in the best interest of the Club? (as CFC is a Private Limited Company the Board as a whole can control the sale of shares)
· If CFC did decide to sell at some time in the future, can CFSS have a legal guarantee of first refusal?
· The community development aspects of the Club were not addressed by the proposal;
· CFSS has previously agreed four principles to guide any decisions about changes to the ownership of the Club
o Securing the Asset (the ground) for the indefinite future
o Maximising controls to prevent undesirable changes of ownership in the future
o Guaranteeing representation on the CFC Board
o Sustaining the Society's objectives in relation to the Club's involvement in, and responsibilities to, the Community,
and these checks and balances must be addressed by the CFC Board's proposal;
· The Business plan for the new Stadium has not been disclosed - this was promised - when would it be made available to CFSS?
· Is £3M debt affordable/sustainable for a Club of this size? Would this be the true level of debt, bearing in mind existing liabilities?
· Planning permission for the redevelopment of Saltergate has been granted and is extant, this should not be forgotten
· What are the projections for increased gates in the new stadium? Are they realistic?
· We must make our decision quickly, as we may lose the opportunity to relocate to a new Stadium if we hesitate;
· Any covenant on the new ground, must be sufficiently flexible to allow for future relocation, or to exploit opportunities if portions of the land (the Car park for example) could be sold or leased to the Club's advantage;
· If the proposal goes ahead would CFSS be able to sell its shares in order to fund the Community stand?
· Setting a minimum purchase level of £5,000 preference shares will cut out the ordinary fan (but is also clear that managing a very large share register is expensive to administer)
· Setting the formula for distribution of the preference shares to CFSS members may be difficult because of the complex nature of the membership structure (life members have paid different rates, some life memberships have been granted free of charge, there are annual, triennial, full and concessionary members,) and consideration may have to be given to lapsed members.
· What difference will further success in the Carling Cup make to the situation?
3. Next steps
3.1 The concerns raised above are to be summarised into a set of questions to be placed before the CFC Board. The list of questions will be circulated in advance of the next CFSS Board Meeting where approval will be sought for them to be passed to the CFC Board for their consideration.
3.2 The forthcoming CFSS AGM date will not be set for the time being and until a clear explanation of the proposal and a CFSS Board recommendation can be made to that AGM.
3.3 For clarification, CFSS rules state that 14 clear days notice of the AGM must be given, and, that for any significant matter, a postal ballot must be held.
3.4 The Chair reminds all Board members that we operate on the basis of "Cabinet Responsibility" and any member unable to support the Board must declare their position and argue their case, or withdraw from the Board.
Next Meeting of the CFSS Board: Wednesday November 8th 2006, 7:30pm.
Venue: CFC Boardroom
