Minutes from RamsTrust Meeting with the EFL Executive

RamsTrust representatives met with the EFL Executive on Wednesday 19th January.

• The EFL opened the meeting by referring to the increased “noise levels” since the end of last week which followed an EFL Board Meeting where the League had requested an update from Administrators, as had been referenced in the League statements.


• The EFL stated that they still required specific detail on what the current position was in regard to cash flow. The EFL had provided the club with time to resolve the requirement for funding to the end of the season but was now aware from discussions that after the first week in February the club would no longer have sufficient funding to keep the club trading.


• The EFL stressed that for the integrity of the competition and to ensure chaos did not ensue they need certainty that funding would be available as per the terms of the Insolvency Policy so that Derby will be able to fulfil their remaining fixtures.


• Whilst the EFL has been provided with a couple of potential options in respect of sources of funding, as it stands the Board was not satisfied that DCFC had the appropriate funding in place.


• For example, the club had not made any significant player sales in order to generate income and reduce costs, which the EFL was aware would be the usual approach undertaken to ensure to generate funds.


• The League also say they need to understand if there is a preferred bidder so that things can move forward, the current issues can look to be resolved and a deal can actually be done.


• The EFL say that they would usually only speak with a preferred bidder to ensure they meet the requirements of the League and its Insolvency Policy but there has been dialogue previously with two of the parties though they accept things have changed in the period since those discussions, with one of those bidders withdrawing.


• Those parties they have held discussions with had not been able to commit to meeting the terms of the Insolvency Policy of paying unsecured creditors 25p in £. Under the League’s insolvency guidance this could result in a 15-point penalty that would ordinarily take effect at the start of the season following the date of the administration.


• The League has not had a comprehensive estimated outcome statement based on potential bids so are not fully aware of possible outcomes.


• The League understood these are not insignificant issues for the Administrator to overcome and that the overall matter is not solely dependent on the claims from Middlesbrough and Wycombe, who the League say are not football creditors presently but could be if they were successful in their claim.


• The claims by the two clubs are contingent claims – another example would be additional fees for player appearances. If a club goes into administration those additional fees would still have to be honoured if they are met in the future ie the purchaser steps into the shoes of the club in respect of football issues.


• The arbitration with Middlesbrough started a year ago but has still not been resolved; the belief is that this should have been addressed much earlier. The EFL felt this was always going to be an obstacle to the sale of the club and should have been a priority for the administrators to address.


• The EFL said its Insolvency Policy exists to protect its membership and to ensure no club seeks to gain an advantage over another by not paying its football debts and that it has an obligation to preserve the position of all its members.


• They say by just allowing the compensation claims to be discarded or making a decision now in one particular direction would risk action being taken by the other interested parties (and potentially other clubs) and that would ultimately have an impact on all members who are not directly involved.


• They accepted that current EFL rules extend beyond normal insolvency practice, but the EFL is in effect a ‘private members club’ and the rules that are in place have previously been agreed by all clubs.


• In an attempt to bring a resolution to the matter, the EFL has written to Middlesbrough, Wycombe & Derby and set out its view as to a process that would determine whether the claims by Middlesbrough and Wycombe would be regarded as football creditors. They are waiting for responses from each of them before looking to agree on how to move forward. This will take more time but is being expedited.


• The EFL say they have also proposed formal mediation in a further attempt to try and get the parties to reach an agreement and that would need to involve the clubs, the Administrator, and any preferred bidder.


• The EFL say they have met with Government and local MPs this week with Pauline Latham proposing a meeting of all relevant parties (EFL, DCFC, MFC & WWFC) to get everyone to agree on a way forward to save Derby County. The EFL confirmed they are happy to attend this meeting as soon as possible.


• The EFL will be releasing a statement shortly to provide an update to Derby supporters and also to respond to various allegations made over the past few days in more detail.


• One of the issues raised was in respect of the comments made earlier in the day around an EFL deal with Middlesbrough FC linked to disciplinary action being taken against Derby County for alleged Profitability and Sustainability breaches. The League advised that this matter was dealt with in the original Disciplinary Commission in 2020 when the panel said it had no hesitation in rejecting the club’s analysis, and suggested interpretation of improper influence. The League is frustrated that this issue has been raised again and considers it an unhelpful distraction.


• They are happy to meet again with RamsTrust as soon as required and will do everything they can in their power and within the confines of their Regulations and Insolvency Policy to help save Derby County.