No one will pay top dollar for a premier league club who don't have control over their own stadium so allam doesn't want to lose this. The SMC debt is small change to the allams and only about 10% of what the football club owe him. There is no big plan here. He is a bully who thinks he can do what he wants because he's rich. If the council do take action it will be against the smc and the ultimate sanction will be that the lease agreement could be cancelled. I don't think the smc has any debts secured on the lease any more so this complication is gone but I don't see the council having any interest in taking back control

If you own an insolvent company you don't have to put your own money into it to pay its debts. You can put it into liquidation and the creditors are paid out of the assets - if any. The council could take control of the SMC, terminate the lease and wind up the company. If Allam was the only or major creditor and had to whistle for his money would anyone care?

Interesting scenario. And no.

If this is indeed the case, then building up debt in the SMC might not be the most sensible thing to do.

THANKS FOR THE REMINDER WILF

It's not that simple. The SMC owns a lease which has a commercial value so any owner of the company can't just liquidate it and walk away from any debts.

My understanding of the agreement is that City and FC are the major users and the agreement is with the council. It was for twenty five years, with an additional twenty five to follow with some safeguards, such as rent/charges linked to other stadiums like Halton , Huddesfield and will be independent of any SMC control. If SMC changes or goes bust this has no effect on the agreement on the major users, I know the Lib Dems did there very best to mess it all up but I do not think they can have altered these main planks of the agreement.

Now clearly if there is a change of the way the stadium is run and it indeed it goes to the city council then we may have to look at costs etc. I for the life of me can not see why we are suddenly a drain on the economics of the stadium unless of course its part of the plan. I know when Adam Pearson heard about FCs deal when he was citys boss he was not impressed one bit as I do think Richo got us a good deal overall. Now what the little Pharaoh is really up to is beyond me, but he has managed to alienate just about everyone in the UK with Liverpool supporters now boycotting the KC because he wants to charge them £48.

Cheers Phil for the council input, not a bad lad really shame he comes from the dark side

If the council terminates the lease the company has no value whatsoever.

Not only that, what would the value of the lease be exactly? Since the SMC loses money (now, suddenly, despite previously turning a profit on lower utilisation) it can't be ascribed a value as there's no projected future earning potential attached to it.

Quite. You could value the lease on the projected rental income to the end of the term less anticipated costs. However Allam would have us believe that the rental income doesn't cover the running costs so there is no profit. Even if the lease was not terminated by the council a liquidator of the SMC could disclaim it as being onerous.