Port Vale: Vale loan breached council cash deal
CASH-STRAPPED Port Vale breached their £2.25 million loan agreement with Stoke-on-Trent City Council when they took out a mortgage worth £277,000 last month.
Former club chairman Peter Miller borrowed the cash from Gibraltar-based company Continental Solutions on December 6, using Vale Park as security.
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At the time, Vale chief executive Perry Deakin said the money was needed to help ease the club's "cash flow" problems.
In fact, the move risked the very future of the club since it breached the terms of the substantial loan Vale agreed with the City Council in 2006.
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According to that agreement Vale are not permitted to incur more debt while the loan remains, and any attempt to do so must first be cleared by the authority.
By taking out the mortgage, Miller, pictured left, risked the council demanding the return of their cash, a move almost certain to plunge Vale into administration.
It remains unclear whether he discussed the mortgage with council officers, but it seems unlikely since his vice-chairman, Mike Lloyd, below, claimed the club board knew nothing of the loan until 10 days after it was registered with Companies House.
The city council refused to comment on the terms of their loan last night, but it appears Miller's gamble with the future of the club paid off.
Mohammed Pervez, leader of the Labour-run council, told The Sentinel it would not be in the authority's interest to take "drastic steps" that might jeopardise the club's future.
Instead, he said the council would continue to monitor the "delicate" situation while protecting public money.
Chartered accountant Sam Corcoran said he believed the club had breached their deal with the council by taking out the mortgage.
He explained: "The council loan agreement talks about not entering into any material contracts, including loans, without the approval of the authority.
"In my opinion, the loan taken out last month falls into this category because of its magnitude."
The city council loaned Vale £2.25m in 2006 to be repaid over 20 years. Latest available figures show that £1.897m is outstanding, but the city council confirmed all payments had so far been met by the club.
Vale Supporters' Club chairman Pete Williams claimed the latest revelation showed how poorly the club was being run.
He added: "I find it appalling that Mr Miller has taken out this loan without the other directors knowing about it.
"It shows how poorly the club is being run if the chairman can take such a major decision which should surely have only been taken following a vote at board level.
"By taking out the loan Mr Miller has put the club's future in further doubt, especially if he didn't seek approval from the council."
Supporters are preparing to call an extraordinary general meeting to vote out the club's four directors, and Williams added: "Fans and shareholders must come together to remove this board before they destroy our club."
No-one at Vale was available for comment.
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Comments
by trappist
Friday, January 13 2012, 9:58AM
“The role of Company Secretary Bill Lodey must be called into question as he has been at the club for so many years while Directors come and go.”
by ValiantFosse
Thursday, January 12 2012, 5:05PM
“Algy7, I do not worry about the scumbags not sleeping, it is the Vale fans who will suffer if we lose our club. What can possibly be hidden in the books? How people can still support the board and criticise peoples` efforts to evict them annoys me, supportive advice is always useful but not some of the brainless attacks.”
by algy7
Thursday, January 12 2012, 4:41PM
“For any loan of this magnitude to be accepted, surely TWO signatures should have been required by the loanee, if so, then two people are negligent.
Also I ask again what I asked a few weeks ago, what have the clubs' secretary and solicitors been doing while all this was going on ?,
a) If they knew what was happening and did nothing then they must also be culpable, and
b) if they didn't, and were kept in the dark, then Peter Miller doesn't have a leg to stand on.
I really don't know how people can sleep at night.”
by johnrhyl
Thursday, January 12 2012, 4:35PM
“Who are you Laythevale ?? One of the scam merchants in disguise your comments are very pathetic.......Lets get the Serious Organised Crime Agency involved and as for SC using lawyers in Leeds how about non locally are qualified in this situation and they are as Leeds were in similar circumstances....so lets go and rid our club of these scammers and fraudsters...I rest my case..No Comment..Pro Mo lets Go with Simmo”
by ValiantFosse
Thursday, January 12 2012, 4:23PM
“Lanternhead, Our man in Leeds is the man for the job, shareholders interests are not served by illegal company activities. Miller`s loan probably breaks a handful of company laws, let him squirm wherever he is hiding.”
by ValiantFosse
Thursday, January 12 2012, 4:10PM
“Oliver3742, my view, Plan A is EGM -- Interim Board -- New Owners. Plan B Legal Action. A lot of scope in there. You have not noticed that all the groups are united in evicting this board, and that the SC are the spokesmen? Admin is a risk at most lower league clubs, if a club borrows at 2% ? per month from an Off-shore company, you do not worry? The clubs legals are in the Black country and seemed to be mainly concerned in protecting the board at the last EGM, it is not usual to use the same lawyers in a dispute. When Woolworths closed was it the fault of the customers or the board?”
by tisdeano
Thursday, January 12 2012, 4:10PM
“Lanternhead
The solicitor chosen was before the loan news broke and for all the right reasons.
Im confident all angles are been covered carefully, however if you want more information its best you attend one of the SC meetings for further clarity.”
by lanternhead
Thursday, January 12 2012, 4:01PM
“thats all well and good for the shareholders but shouldn't they be looking for a legal practise which specialises in company and corporate law as i still think millers loan is illegal as he shouldn't have been able to secure a loan/second charge on his signature alone as it should need board approval.”
by tisdeano
Thursday, January 12 2012, 3:17PM
“oliver
Legal practice in Leeds as he specialises in the rights of small shareholders”
by oliver3742
Thursday, January 12 2012, 2:43PM
“Davoknype,
As I said a few days ago, there is much criticism admittedly from the factions but no Plan B or C.
I see there are a lot of comments from the leadership of the SC but what are the thoughts of the leadership of the B&G and SEO factions? Or are they all one and the same?
I think all talk of administration should be dropped for numerous reasons, firstly it fans the flames, secondly lets all be positive and finally it could play into the boards hands.
Who are the current auditors / accountants? Who are the current legal representatives? Why have the SC gone to a legal practice in Leeds? If anything did happen to the club I would villify the SEO group as much as the board.”