EFL express frustration at admins in response to letter from Derby fans on takeover

The EFL express frustration at admins Quantuma in response to a letter which had been sent from Derby County fans on the takeover saga.

The English Football League said they were stepping in to try and speed up the situation with the 2022/23 season around the corner.

The Rams’ supporters groups have received a detailed statement from EFL chief executive Trevor Birch after sending a letter to the league voicing their concerns about the ‘lack of a clear deadline’ for takeover bids to be submitted.

It came after American businessman Chris Kirchner withdrew his offer for the club on Monday, and the race goes on to find a new buyer that can take the Rams out of administration.

Former Derby chairman Andy Appleby is a strong contender to buy the club while former Newcastle owner Mike Ashley and ex-Wolves supremo Steve Morgan are also interested.

Derby fans’ letter reads: “We are writing on behalf of our members to express serious concerns over the ongoing attempts to conclude a sale of Derby County.

“On 12 June, the EFL said it was changing the terms of the current suspension of the club’s share in the EFL to give the EFL greater ability to become involved in the club’s attempts to exit administration. Mr Birch noted in that statement that ‘further urgent proactive action is required in order to do whatever is possible to secure the Club’s future as a continuing member of the EFL’.

“While noting the gravity of this situation we welcomed this intervention and hoped a clear timetable would be put in place.

“We have since corresponded with Quantuma to ask what the deadline is for receiving bids. The response was that although it has been made clear to bidders that timescales are short, no specific deadlines have been set, but there is good progress.

“We are pleased there is considerable interest in buying Derby County and any progress that has been made is welcome.

“However, we remain extremely concerned by the lack of a clear deadline for bids to be submitted – an absence of enforced deadlines appears to have been a problem throughout this process.

“Without hard deadlines we fear this process will continue to drift.

“We now ask Quantuma and the EFL to explain what steps are being taken and what deadlines are set, to provide reassurance that they will not allow Derby County to slide into oblivion.

“Yours sincerely,

“RamsTrust Board, Derby County Supporters Clubs, Black & White Together, Derby County Disabled Supporters Clubs, Punjabi Rams.”

Derby have been in administration for the last nine months, preparations for the new season haven’t been announced, no friendlies are lined up and there are just five contracted players have yet to be announced although the players are due to report back for pre-season training in a fortnight.

Manager Wayne Rooney can’t sign players or make offers to Rams players out of contract until it is resolved while goalkeeper Ryan Allsop left the club earlier this week having signed a two-year contract with Cardiff.

EFL RESPONSE:

I think it is important that I first clarify the EFL’s position regarding the issue of deadlines which you raise in your letter.

The EFL will permit a club to play in its competition while in administration for a maximum of 18 months. However, a club will not be permitted to start two consecutive seasons in administration. Given Derby County entered administration in September 2021, after the beginning of the 2021/22 season, it is the 18-month deadline that is more relevant here and will require the club to exit administration by March 2023 at the very latest.

That said, an administrator can only continue to trade a business if they have the necessary funding to do so. Therefore, there are fundamentally two options.

1. The administrator can restructure a business to ensure it can operate on a break-even basis until a new buyer can be identified. This will often involve stripping cost out of the business to ensure that its outgoings do not exceed its income.

2. Alternatively, the administrator can seek to utilise an external source of funding to cover the trading shortfall. Often this will be the preferred bidder as they go through the purchase process. While this avoids the challenges associated with cutting costs from the business (and the potential that it will devalue it to some degree) it is an approach that is inherently riskier, particularly if a funder is not forthcoming or if the administration process becomes protracted. In this case the administrators have funded the ongoing trading losses with further advances from an external funder which has security on the stadium. This of course has created a liability that the administrators need a prospective purchaser to repay as part of the sale consideration. This debt has obviously grown with every passing month of administration trading.

As it stands the administrators of DCFC will need to provide the Board of the EFL with evidence that the club will meet its commitment to the competition for the 22/23 season (including an exit before March 2023) to avoid the club beginning the season but not completing it.

Our desire to understand this situation better and take proactive action to move it forward led to last week’s statement where we announced the amendment of our Notice of Withdrawal conditions.

Since then, the EFL and Quantuma have held daily meetings. However, the administrators have informed us that the confidentiality arrangements agreed with bidders, plus obligations owed by the administrators to individuals under the UK’s General Data Protection Regulations, means they are unable to confirm the identity of any bidder without the express consent from the relevant bidder. In order to explain our position, we have asked for calls with the solicitors acting for those bidders who have refused consent. These calls have not yet taken place.

As you can imagine this is extremely frustrating for us. Firstly, with considerable experience in this area we believe we can help review any proposed exit plans to identify any issues as early as possible so we can then work with them to try and find any potential solutions.

Secondly, we will have significant work to do on verification of compliance with the Owners’ and Directors’ Test as well as an assessment of the ultimate source and sufficiency of funding. This clearly cannot start until we have the necessary information.

In the circumstances therefore, if you require further information this will have to be provided by the administrators.

To return to your original query re deadlines I understand some may say we should be stronger and impose specific deadlines but given our powers derive from the ability to withdraw central funding, impose sporting sanctions and/or ultimately withdraw membership it is difficult to see how this is beneficial to the Club at this time. As we have maintained throughout this process our priority has been doing what is within our power to assist those seeking to take the club out of administration. We continue to remain in the hands of the administrators to deliver a successful sale of the club.

We will continue to push for receipt of the necessary information and are happy to have a further update call with you early next week.

Kind regards
Trevor Birch
​Chief Executive Officer

SEE MORE: Leroy Rosenior gives verdict on issues surrounding sale of Derby County with update made

Twitter users reacted as EFL express frustration at the admins Quantuma in response to a letter from Derby fans on the takeover saga…

@jo_peabody: We need the administrators to set a closing date for bids. Enough of all this fannying around. Get your cards on the table and let’s crack on.

@_mattf7: So the bidders won’t even reveal themselves to the EFL…. not a great sign.

@ClaireMcBarnet: So it’s back to being the @quantuma1 show again. My heart is sinking by the hour 😔

@pam_stones: Exactly! Thought Trevor Birch was supposed to bring rigour and urgency to the table. Just so frustrating! How hard can it be to set a deadline for bids with proof of funds accompanying it????

@AdamWrighty14: Get rid of @quantuma1 a deal will be done in no time

@Nick_H67: So, the EFL’s involvement is limited due to legal restrictions. Unfortunately, we are still very much in Quantuma’s hands, which is as comforting as being told that Harold Shipman is your new GP.

@LostTransport: We at Pompey know Trevor Birch tells it straight so this is extremely worrying.

@storm16540959: Birch was a administrator before so he must of known what the response would of been ? PR stunt? Trying shift all the blame from the Boro situation which wasted months? Hide Their vendetta?

@Funkybrewer: Or a alternative read, they are bending over backwards (rightly) to keep you going despite the fact they have no clue whether you have the money to fund the season, a realistic potential owner, a ground, or sufficient players to field a competitive team.

@redfern_i_j: Frustrating. Quantuma (Morris) once again hiding behind NDA’s. This time to keep the EFL at arms-length, despite League officials having a key role in the ultimate closure of this process. At least the EFL has replied; more than can be said for Quantuma. We’re waiting………

@gill_frost:
Could you ask questions regarding embargoes and season tickets?
1) if we remain in administration are we in a position to offer contracts before the new season starts
and
2) can fans renew their season tickets to help fund the club?
Thank you

@r4derby: How are the administrators making this straightforward? By hiding behind NDAs, just to maintain control against the EFL, they’re causing more delays and ensuring this drags on even longer. Awful management, awful strategy. This has been difficult because of them!

@Toshisaram: Translates to Quantuma are still dragging their heals to ensure they get a maximum pay out for themselves. We’re simply at the point where all interested parties need to make a best offer and draw the line. Seems like they are still playing out a long winded auction process.

@walkingscott12: Shouldn’t the efl have pushed the administrators months ago?

@MiguelKelly716: So the EFL were ok to approve CK and he was a fraud so I’d imagine the new bidders will get approval. As MA has already run a club I’d expect the process would be quicker if he was to be the preferred bidder, but I’d think MM won’t want that, he’d rather see the club fold.

@derbyfc1990: Can see everyone leaving the club par from u18s and us using them to keep a low budget, Rooney will be gone etc all because the admins re complete fuck jobs and can’t do a job in a matter of a few months

@gingerjeffs: Fuck the efl you lot have been saying all season and blaming them. Surely now you can see the elf are trying to help you and have helped you so much already. The admin absolutely reeks of mel Morris thought it since day one #dcfc

@Paulderby501: What a pile of shite, meanwhile our club sinks further into said shite 😡

@onlinedesignuk: Mel still got the @EFL on strings I see. #dcfc #dcfcfans

@simoncolebrook: Trevor Birch was a voice of sanity during our admin in 2012 after Andronikou was removed as administrator by HMRC. He was always honest with @PompeyTrust in our dealings and played a huge part in enabling the fan rescue of @Pompey

@WrightStuff86: This raises key questions for me: Why are potential bidders refusing to disclose their identity to the EFL? What is the O&D process, what takes the time? If bidders know this, why won’t they engage with the EFL now? And what led to Chris Kirchner passing those tests? #dcfc

@Derbyfan27: I called for a protest today but frankly groups cancelled it. Its time act Derby fans and gather outside Pride Park in numbers, and show our anger to @quantuma1

@Frattonegg: Biggest sign yet that #Derby are in deep trouble. If Trevor Birch is painting this picture, you know it’s bleak. He got Pompey going after the 2012 admin following the mess Andronikou/Chanrai/CSI left us in 2010. Miraculous stuff. Stunned by Andronikou still being in football.

@1neilhallam: Couple of things stand out immediately for me.
1) Clearly shows the limitations of the EFL as an administrator, when a regulator is needed. 2) The fact the EFL have considerable experience in this area should tell everyone that the business of football is broken. The EFL don’t want to be a regulator and don’t want anyone else to be a regulator. The clubs would never approve it as it would reduce their own power. So it would need to be forced on them. And it’s money, greed and self-interest that has brought football to where it is now. And since money, greed and self-interest aren’t going away any time soon, expect the EFL to continue building on its experience.