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COOP Bank call in Lincoln's debt of £380,000

Luke Imp

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Doesn't read well, but at least we own the Stadium, training areas, land and external buildings if it comes to that.

What makes it worse, though, is that no bank will deal with us because we're a football Club. Stupidly as well, this isn't even potentially going out of business because of admin (I think it'll sort itself out, though)!
 
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Luke Imp

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Here's the letter from the Chairman (it's been typed out by someone so excuse the odd mistake if you find one, but you'll get the drift of it):

Dear Shareholder/Supporter

For the past 12 months our bankers (the Co-op Bank) have been asking us to find alternative banking arrangements as we no longer fir "the core customer profile" they require. We have tried all of the main High Street banks, and some lesser ones, but all in vain as every one of them has basically told us that as we are a football club business they would not be interested in taking us on a customer, particularly as we would require an overdraft facility it would appear that all avenues to find alternative banking arrangement are closed to us.

The situation as it stands now is that the Co-op Bank is pushing very hard to sever ties with us as quickly as possible and to this end it has instructed us to sell property assets belonging to the Club in order to pay back monies we owe to them.

Currently we owe the Co-op Bank around £380,000 of which approximately 80 per cent is our overdraft/working capital facility. We do not wish to sell Club assets as this would leave us in a very precarious financial position i.e., if we did, the Co-op Bank would get its money back and we would still be faced with a further a further £300/400k on top of what we owe the bank to use as working capital, effectively placing the Club in dire financial straits.

We are very angry with the way in which we are being treated by the Co-op Bank as we have always operated our responsibilities to the bank very professionally and we do not understand its attitude towards us. In the course of the coming weeks we will be lobbying hard to effect a change of mind from the bank and if anyone feels they can help us in this quest, it would be very much appreciated.

However, we have to make contingency plans and the following are some of the initiatives we intend to put in place.

1. We will be looking to issue three year Bonds starting from as little as £1000 up to £10,000 with the total sum invested to be repaid with interest at the end of the three year term.

2. For sums invested in excess of £10,000 we will be able to offer "bespoke deals" depending on the amount loaned to the Club and the repayment period.

3. As a community club we would urge all supporters to get behind the club and invest what you can afford by buying shares in LCFC. There is an application form for shares included with this mail out. Just fill it it and return it to the Club with your cheque. It's that simple. It is our intention to have more meetings with shareholders during the year, other than the AGM.

4. We are looking to strengthen the main Board of Directors and would welcome any application from people who think they could make a difference at the Club, especially financially. We have three vacancies.

5. During the course of the AGM we will be releasing details of another fund raising initiative that should hopefully get the imagination racing.

I hope that you and other supporters alike will be able to help us raise as much money as we can to help "keep the wolf from the door" in what could become a very testing year for us.

The Co-op Bank has made its intentions very clear and we do not want to be put in a position whereby the bank simply sells our Club assets from underneath us at a cheap price and without our say so just so they can get their money back. This is a very real threat.

The Board of Directors thank you for your past help and thank you all in anticipation of your continued support.

(Signed by Bob Dorrian, Chairman, on behalf of the Board of LCFC)
 

Gladders

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The bank called in our 500k overdraft a few years ago too, we repay it back so much a year
 

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Southern Shayman

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So let me get this straight? Despite the Co-op making a profit out of you and you are behaving well as customers, they want to sever all ties? :dk:

Either someone's telling porkies or this is all just very very strange.
 

Davidimp

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The co-op group are skint aren't they?
Would assume another bank would take us on if we didn't have a debt, or are you telling me NO bank will now take ANY team at all????
 

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The co-op group are skint aren't they?
Would assume another bank would take us on if we didn't have a debt, or are you telling me NO bank will now take ANY team at all????
IYour last accounts show Lincoln as maxed out on the overdraft plus owing 750k to trade creditors. Add to this the account warning from a few years ago and it's bound to make banks nervous.

The Co-Op isnt in the best of shape and have been looking to improve it's capital so this maybe related as well
http://www.thenews.coop/85147/news/...-caused-the-debacle-of-the-co-operative-bank/
 

CrazyImp

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This is going to be my only post on the matter.

I actually work for a very large High Street bank, so I can empathise with Co-Op's position purely in the sense that they want their money back, no problems there. However, to adopt the position that they no longer want the football club as a customer purely because it's a football club is frankly vile, and to not offer a viable repayment strategy from the view of things is even worse, and goes against their supposed ethical ethos as the bank that cares entirely.

I hope the people of Lincoln adopt the backlash mentality to this and switch their custom elsewhere, but I'm not holding much breath as there's a fair bit of apathy to the football club in the city.

Either way, I think they will change their mind on this.
 

Davidimp

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This is going to be my only post on the matter.

I actually work for a very large High Street bank, so I can empathise with Co-Op's position purely in the sense that they want their money back, no problems there. However, to adopt the position that they no longer want the football club as a customer purely because it's a football club i ts frankly vile, and to not offer a viable repayment strategy from the view of things is even worse, and goes against their supposed ethical ethos as the bank that cares entirely.

I hope the people of Lincoln adopt the backlash mentality to this and switch their custom elsewhere, but I'm not holding much breath as there's a fair bit of apathy to the football club in the city.

Either way, I think they will change their mind on this.
Have already closed all my accounts back in the summer after they mucked me about when I wanted to increase my mortgage to buy a new place and every time I spoke to them the amount went down. As my mortgage advisor later told me you're best away from them, they're broke!
 

Davidimp

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Your last accounts show Lincoln as maxed out on the overdraft plus owing 750k to trade creditors. Add to this the account warning from a few years ago and it's bound to make banks nervous.

The Co-Op isnt in the best of shape and have been looking to improve it's capital so this maybe related as well
http://www.thenews.coop/85147/news/...-caused-the-debacle-of-the-co-operative-bank/
Know we have quite a bit of debt but other clubs in this league and above have far more.
The letter states we owe them 80% of debt.
 

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Oh dear, how on earth is CrazyImp going to pay that? A good place to start would be to sack all the useless bastards on fat full time contracts who've been taking the piss out of you all for the last 5 years and get in some honest, hard working part timers who regard it as an honour to play for your club. Don't know if I've mentioned it before but The Shaymen are the new reality and the future for Conference clubs. :whistle:
 

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Something doesn't add up here. I've heard of football clubs being in financial trouble for a number of reasons, but not being able to find a bank is a new one on me.
 

Luke Imp

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I think it's more to do with the bank facility we currently have with the Co-op.

It's a really weird situation. Everything's manageable from our point of view. We can afford the payments, we don't pay late and £80k of the £380k it a mortgage we've got on an external building that has an income and they want all that back as well (I wasn't even aware a bank can just call a mortgage in when they wanted).

They've basically just decided to stick two fingers up at us without really having any justification to, and at the risk of completely screwing us up.

It's genuinely as stupid as the whole situation sounds. The AGM is in just under 3 weeks so we'll probably find out more then.
 

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Or maybe they are fed up with having a customer with a £380,000 overdraft? An overdraft is meant to be temporary.

It makes sense no bank is going to come in and give the option to give an overdraft of that size, especially to a football club.

It would make the most sense for Lincoln to open a new bank account with a high street bank, without the massive overdraft, and agree to repayment terms with the co-op.

As for £80k of it being a mortgage and being called in, well I suggest that someone at Lincoln might be telling half truths on this, as mentioned, mortgages have specific repayment terms, it's unlikely that one would ever be given such a clause to allow this, or that Lincoln would have ever agreed to such a clause.
 

Davidimp

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As my mortgage advisor said to me back in September after paid off my old mortgage with them after sold my house and took a new one out elsewhere as they kept dropping the amount they would lend me 'Best away from a bank with no money!'
There in the lies the biggest problem with the co-op bank they are skint so are calling in all their debts to balance the books.
Odd they are calling in the mortgage if we've kept up the payments, didn't think you could do that legally?
 

Davidimp

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Or maybe they are fed up with having a customer with a £380,000 overdraft? An overdraft is meant to be temporary.

It makes sense no bank is going to come in and give the option to give an overdraft of that size, especially to a football club.

It would make the most sense for Lincoln to open a new bank account with a high street bank, without the massive overdraft, and agree to repayment terms with the co-op.

As for £80k of it being a mortgage and being called in, well I suggest that someone at Lincoln might be telling half truths on this, as mentioned, mortgages have specific repayment terms, it's unlikely that one would ever be given such a clause to allow this, or that Lincoln would have ever agreed to such a clause.
No bank will touch us until we clear the overdraft.
I doubt we are the only in club in the country or even in this league with an overdraft that size, not that I think its ok to owe that kind of money.
Rooney earns our overdraft in under 10 days and I also note with interest that new prem league deal will see the clubs get £8 million a game!
If just some of that money filtered down here we'd all be a lot better off.
 

Luke Imp

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They might well be, but if our overdraft it at £300k, do they really expect us to be able to pay it back in one lump sum?

If they had come out and said they wanted it reducing and set up some kind of additional payment plan then I doubt we'd have said anything. As said, it's not as if we're non/late payers who can't manage the payments.
 

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No bank will touch us until we clear the overdraft.
I doubt we are the only in club in the country or even in this league with an overdraft that size, not that I think its ok to owe that kind of money.
Rooney earns our overdraft in under 10 days and I also note with interest that new prem league deal will see the clubs get £8 million a game!
If just some of that money filtered down here we'd all be a lot better off.

I don't think it would. I think it would just mean clubs get even more carefree with their budgets as they'll just see £££ from higher up the pyramid, and then when things go tits up, it would be in even bigger ways than what we've seen in recent years.

There just shouldnt be so much money at the top level of the game in the first place, and more should be devoted to the real grass roots.
 

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I don't think it would. I think it would just mean clubs get even more carefree with their budgets as they'll just see £££ from higher up the pyramid, and then when things go tits up, it would be in even bigger ways than what we've seen in recent years.

There just shouldnt be so much money at the top level of the game in the first place, and more should be devoted to the real grass roots.

Lets face it, the clubs at the top of the pyramid don't really give a toss about those of us a few levels down, they are getting richer and very little of their cash filters downwards. We nearly went bust a couple of season back over £25k owed to the Inland Revenue, which doesn't seem like a lot of money in the grand scheme of things but shows how many teams are living on a wing and a prayer. One of the reasons we didn't have the cash was because it was the middle of winter and due to postponed games because of the weather the income stream had dried up.

I feel really sorry for Lincoln as it sounds like they are being completely shafted by the bank despite on the face of it being a well run and financially responsible club.
 

Davidimp

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A bank with far less money than pretty much any bank going right now, only us!!
Anyone else know if there club is with them?
 

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If theyve still got a "black hole" of £1.5 billion its going to require a lot of £380,000's to recoup that!
 

Richard Cranium

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Oh dear, how on earth is CrazyImp going to pay that? A good place to start would be to sack all the useless bastards on fat full time contracts who've been taking the piss out of you all for the last 5 years and get in some honest, hard working part timers who regard it as an honour to play for your club. Don't know if I've mentioned it before but The Shaymen are the new reality and the future for Conference clubs. :whistle:

Given up on the Football League dream then?
 

Davidimp

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Well Madness are opening their summer tour at our ground on May 29th, kinda apt.
 

AdamStag

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There any update on it?

They clearly can't expect a club to pay that straight away - i'd like to find any club in league 2 who could do that
 

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