De Turck muddies the water on ex-director loans

By Rick Everitt

“The current owner did not pay attention to the ex-directors’ loans until he wanted to sell the club,” says the latest Charlton statement about the stalled takeover of the club. Given Roland Duchatelet’s relentless propensity to try to shift the blame for his own failings on to other people, it does rather invite the retort: “Well, whose fault is that, then?”

It also claims that: “The directors’ loans are not an issue for buyers that have a lot of money, but they may be an issue for buyers who don’t have so much money and want to borrow against the land and the buildings."

This formula is intended to reconcile an apparent contradiction in Duchatelet’s June 7th statement, which identified the loans as a hold-up in the takeover process, with his point man Lieven De Turck’s July 2018 assertion that: “There are no issues with regard to former director's (sic) loans.” 

Nevertheless, the published response to questions posed to the absent De Turck at the June fans’ forum meeting then goes on to suggest in detail why the club believes there ARE issues with the £7m directors’ loans, over and above what the holders will accept for repayment.

One focuses on the December 31st 2010 deed statement that: “The Loan shall be repaid in five (5) equal instalments payable on 31 August in each year in which the Club competes in the Premier League up to a maximum of 5 years in any period from {the date of this Deed}.”

According to De Turck, the use of the words “up to” implies an expiry date and the word “maximum” makes no sense “if it is always five instalments”.

A more reasonable interpretation is that the clause in question is intended to deal with a situation whereby the club returned to the Premier League, but was relegated before the fifth consecutive season. The evidence for this is in the inconvenient words “in any period”, which rule out it meaning "the next five years".

Legalistic English is not always elegant, but if there had been any intention that the loans could expire without repayment it is hardly likely the parties would not have been explicit about that, with an expiry date clearly defined. 

Indeed, De Turck’s mooted interpretation elides the fact – or perhaps he doesn’t know - that Charlton were in League One in December 2010. It was not possible for the club to be in the Premier League on August 31st 2011 in any event, so the clause would be nonsensical if it was supposed to mean the next five years. 

And if the ONLY permitted repayment mechanism was the five instalments, it would also preclude settling the loans in full as part of a takeover or at any other time, which has never been anyone’s interpretation. What the clause is clearly supposed to do is set out the maximum obligation of the club.

The second aspect on which De Turck seeks to throw doubt is that the fixed and floating charges over the assets which secure the £7m debt prevent the club disposing of The Valley or Sparrows Lane, for example via leases or an outright sale, without the consent of the ex-directors.

“When the previous owner sold the club to the current owner, one of the options presented at the time of the sale was to sell the Valley land for development and move the stadium next to The O2, without any reference to the need of agreement of ex-directors which would seem to contradict this,” he says.

This is a reference to the attempts by former director Tony Jimenez and his associates to link the 2013/14 sale of the club to a commitment to relocate to a new stadium on the peninsula, a move which they would then control in order to profit from the contingent reallocation by Greenwich council of valuable land there for residential development.

This scheme was exposed in the December 2017 court judgement which found in favour of Dariusz Khakshouri and against Jimenez and Kevin Cash – and in fact found that technically they did not own or control the club when it was sold to Duchatelet.

De Turck’s point here is entirely spurious, however, because no such scheme was ever delivered and neither was it ever proposed by the former directors, so the restrictions arising from the charges were never tested. All it amounts to is that Duchatelet may feel he was mis-sold the club by the former owners, but again the paperwork was surely available to him and any professionals he employed to advise him. His error, if he misunderstood, has nothing to do with the ex-directors - with one potential caveat.

Going back to the December 31st 2010 date of the deed quoted that was precisely the date of the sale of the club to the Jimenez-Cash ownership, which demonstrates that the ex-directors had been engaged in the previous sale of the club in a way they weren't in 2014. Indeed, one of them – Richard Murray – was the vendor in 2010.

As a director under all three recent administrations and 10 per cent shareholder during the Jimenez-Cash period, Murray was uniquely placed both to have known how Jimenez and Cash were trying to sell the club in 2013 and to have advised Duchatelet about the loans, which include £2.6m to him, when the latter took over.

The loans themselves go back to 2009, but it is not the case that they were simply rolled over without further discussion and legal agreement in the 2010 sale. It was only the case in 2014, when as the club now admits, Duchatelet “did not pay attention” to them.

In any event, former director and loan-holder Bob Whitehand tweeted in response to the latest statement that the loans were explained by him to Duchatelet’s chief executive Katrien Meire – herself a lawyer – in February 2014, while as we recently revealed the owner himself met former chairman and loan-holder Derek Chappell in Brussels in 2016. Whitehand also made the point that the seven loan-holders each had the wording reviewed by their respective lawyers.

There is no explanation for Duchatelet’s weak understanding of them other than a lack of due care and attention on his own part, consistent with his slapdash approach to much else surrounding the club. Indeed, if his own legal advice is contrary to the existing interpretation then it is surprising that he has not already sought to have the charges against the assets removed. After all, he's been selling since 2017.

Other aspects of the club’s response do not stand up to much scrutiny either. 

“The price, which was agreed initially with the parties looking to acquire the club more than a year ago, is still the price at which the owner is willing to sell to them, even though the club is now in the Championship,” it is claimed, despite briefing from both the long-standing Australian consortium and the rival Mehmet Dalman camp - reported by the Evening Standard to have walked away - that it has changed.

In fact, the figure of £33m which came from the Australians has remained consistent. What has pivoted, according to them, is responsibility for resolving the loans, which they say was previously Duchatelet’s but was passed to them on promotion - potentially a 21 per cent cost increase, but arguably no change to the "price".

De Turck has previously said that at least one agreed deal involves a future payment on promotion, which if true Duchatelet seems likely to want to leave on the books as secured debt. That might well be another reason for releasing the charges which secure the current loans, even though according to the current owner the value of The Valley far exceeds £7m.

Meanwhile, it is unclear that Dalman was at the table a year ago, which would exclude him from the club’s carefully chosen form of words, as it would other bidders. Note the qualification that the price is the one at which he is willing to “sell to them” - those he agreed a deal with a year ago – other interested parties have been quoted much higher prices in the last six months or so.

Bizarrely, the club also returns, yet again, to the 2015/16 approach made by former chief executive Peter Varney, even though no question appears to have been asked which relates to that and it has no obvious relevance. 

Having previously reasserted on June 7th the lie that Varney, Derek Chappell and myself were advocates for the owner of Ebbsfleet United to buy the club, the latest statement now takes the opposite position and asserts that my own message seems to have been “sell the club to anyone”.

In fact, there has never been a protest linked to a specific purchaser; the focus has been and remains on removing Duchatelet. It remains hard to imagine how any owner could have mismanaged the 2015/16 campaign to a greater extent.

However, the emails between Duchatelet, Meire and Varney published by Voice of The Valley that December did explode the myth that no one was interested in buying the club. 

A key to the credibility of the unknown interested party then was that they were being brought forward by Varney, who enjoys the respect and trust of those of who had worked with him at Charlton for many years, as well as a large cohort of fans. 

It’s perhaps no surprise, considering the company he keeps, that Duchatelet has never understood that either.