Curtis' email to club directors

I write in my capacity as the largest creditor (possibly close to the majority creditor) of WFC Ltd through my company Wessex Park Ltd (WPL). I am aware there is likely to be a board meeting to determine the immediate future of WFC Ltd on the morning of Monday 23rd of November 2009. It is very clear the business is trading whilst insolvent and has in all probability been doing so for several months and certainly for the past three weeks.

The Directors are aware of this position which can best be demonstrated by the very fact of the application to the court to register a "Notice of Intent to Enter Administration". This as we know was granted but has been allowed to expire without any obvious remedial actions taking place.

I can only presume (on the basis that professional advice was taken to initiate this action) that the current and past Directors are aware of their legal responsibility to the company's creditors and the consequences of their actions in carrying on trading after this notice has expired in the full knowledge that the position has not improved.

To be clear after having identified that in all likelihood the company is trading whilst insolvent you have a legal duty to be working in the best interest of the creditors.

To continue to "trade on" in the knowledge that the company's liabilities may be growing is potentially to the detriment of all creditors. Further it seems likely to me that the collective position of the creditors is deteriorating on a daily basis and if so this makes the Directors personally culpable.

If this is to continue I now believe that it would be in the creditors best interest to bring an end to the business. That said I understand you may have 2 offers on the table and you might argue it is in the creditors best interest to consider those offers over winding the business up.

As the largest creditor I offer you my view on the options as I understand them and my response to them.

1. Beasant/Ryan offer

I am not privy to the fine details of their offer (and even if I did my information would be out of date as soon as I write to you because of the relentless changing of their position) but I am aware they have not met the conditions of the board as set last Monday and frankly it appears there is no possibility they will do so.

In addition they appear to base part of their proposition around challenging my loans, the land transaction and further to take action against former directors.As you would expect if they do I will robustly defend my position. Regardless of that fact they do not have my support despite them meeting me and there is no agreement around the treatment of my loans.

This is still the position and unless they intend to settle the Barclays overdraft and the Carlsberg loan (thereby relieving the demands under my guarantees) together with repaying my £221,000 loan I would not consider this to be a better proposition to winding the business up.

In fact their public and private statements on the topic mean that having taken professional advice on the subject the only practicable way forward for me would be to pursue immediate repayment through the courts as soon as possible after you allow them to take control.

It is worth stressing this is entirely due to the threatened adversarial actions of these people, and as a result of their meeting with me. You will see (in 2 below) this need not have been the position had they dealt with the matter differently.

2. George Rolls

Again I am not privy to the details of his offer but I am aware that he has spoken to Barclays and Carlsberg regarding the clubs indebtedness to them.

He has also negotiated a stand still arrangement with me on my loans. By this action he at least tries to demonstrate his intentions are honourable and in the best interest of WFC and its creditors.

Obviously nothing is certain but if this is confirmed then I have agreed, in principle, to terms similar to those given to WFC now. It is not for me to comment on his plans or his experience other than he clearly has more with regards to the running of a football club than the two people in 1 above.

3. Liquidation

I now think this should be given full consideration as this could well be in the best interest of the creditors over the offers in 1 and 2 above simply because it seems to me that you are likely to have insufficient proof that either offer is certain (or even likely to be) better.

Simply attempting to shift the position by passing responsibility at this late stage will not in my view absolve any director for their responsibility for the current position or what occurs in the immediate future. I don't need to say more on this point.

You undoubtedly have a difficult decision to make which I recognise is yours not mine. I am advised (and you should have taken your own advice on the position) you have now moved to a situation where your duty is to decide upon which option is in the best interest of the creditors and no longer the shareholders of WFC Ltd.

Certainly it would be odd to allow the position of creditors to worsen; option 3 potentially draws a line under it, the other two if chosen will undoubtedly be tested for the 'reasonableness' of the decision ie what evidence was there to truly believe this was a better way forward.

I recognise this must feel like an impossible position to be placed in but is one you must now face.

I repeat that this is a decision for the directors of the club alone to make but I wanted to bring to an end all of the misinformation and innuendo and clarify my position in the circumstances as I understand them. You I presume have access to professional advice to discover if my views above are mistaken.

I wish you well and hope you find a way. Please don't hesitate to contact me if you require further clarification.

Kind regards, Malcolm Curtis