Woodstock Jag

No substantive changes. From what I gather, one of them was to do with pagination problems with the final document, and the other fixes a couple of typos spotted later.

This is precisely why we said in the statement that Working Together Protocols are being urgently prioritised! I think we are animatedly agreeing with one another, just from slightly different starting points!

It’s also worth remembering that fan consultation is being embedded at the football club. TJF members were directly consulted in recent months on: (a) the Conference league proposals (b) the reintroduction of the matchday programme The TJF Members’s survey is also due out later this month (and the blame for the delay on that is entirely with me as I’ve been trying to find the most suitable format for it). A culture of fan involvement in decision making doesn’t happen overnight. It is completely accepted that the lack of fan consultation was a major shortcoming of the investment process and how it was handled. All involved know that that cannot be allowed to happen again. If people feel that they’re being let down by their elected fan leadership the answer is very simple: get involved. Stand for election.

I don’t know the exact date but all director loans, not just that one, were repaid long in advance of any boardroom dispute arising. The loans were short-term and purely concerned with an immediate cashflow situation. As we (TJF) explained back in June the Club’s actual cash crunch point was in May 2023 (and would have been February but for unbudgeted income in the Rangers game). Over the summer the cash position obviously recovered, as SPFL prize money was paid out and season tickets were purchased for the 2023-24 season. The business has high points and low points each year in terms of cash, and you need to make sure that, at the low points, you don’t run out. What hadn’t been resolved was the need for new working capital. Even with a break-even budget for 2023-24 there would be a cash “trough” during the season, posing liquidity problems. TJF highlighted this problem in June and even put a figure on it of at least £500k being needed. We said this had to be over and above the TJF donations to the Club. At the moment TJF donates money to the Club. This is a core part of the Club’s budgeted income for 2023-24. It is also the most tax efficient way to get members’ funds to the Club. If our members think that we shouldn’t be putting money into the Club, that is of course entirely their right. If a critical mass of members were to tell us that they wanted TJF to stop putting money into the Club on a monthly, we as the TJF Board would obviously listen to that and act accordingly. I should say we have had zero emails from members (or in fact anyone else) saying this. If your point is that you think TJF should also receive shares for the money it puts into the Club, this is a position with which I have considerable sympathy. Indeed, it’s why TJF originally explored pulling together a group of Thistle-minded investors earlier in 2023 (TJF would have been part of the consortium). However, in the longer term I think the aim surely has to be to simplify the fan ownership situation and not to complicate it further by having all three parts of the fan ownership vehicle separately owning different shares. But, just like the main investment, TJF’s pledge was borne out of short-term necessity. To withdraw a commitment like that would only have the effect of damaging the football club, jeopardising its ability to deliver its 2023-24 budget. That’s not a course of action I would support in the current context. I would also point out that we will have a legally binding consultation process for any future investment process, as outlined in our document. So TJF members will have a say (indeed, being the lion’s share of the beneficiaries of the PTFC Trust, they will have the decisive say).

The fact of soft loans left the Club still in a vulnerable position (as they could fall to be repayable at any time and regardless of the Club’s cash position). And, as Jim points out, they left anyone making them in a vulnerable position (because they were unsecured loans). Those facts point to why it was that a more structured investment of at least £500k was required for proper stability on cashflow. Which TJF indicated very clearly in June. Now investment can take any number of forms, but essentially the choice is: (a) unsecured debt (unattractive to any investor for any prolonged period of time without conditions) (b) secured debt (unattractive to the Club as it’s likely to attract debt interest, unattractive to other potential investors as they rank behind as a creditor) (c) non-voting shares (unattractive to investors without more up-front conditions about how the Club would be run, and probably requiring some sort of premium/redemption model for it to be worth them risking it) (d) voting shares (less attractive to the existing shareholders, but perhaps easier to sell to an investor without heavy conditions up front, and it’s equity rather than debt so better for the Club’s liquidity and balance sheet) TJF tried their best to get the fans non-voting preference shares (c) as the vehicle, but it didn’t come off. So the choice was really (a), (b) or (d) for a structure. And (a) already had an expiring shelf life. So the question is would you have preferred secured lending (in the current environment!) to address cashflow? Or would you rather have a vehicle that sees a reversible dilution of shareholdings, with no debt interest at all and no premium on repayment? We’d all rather (e) someone somewhere willing to donate silly sums of money for no strings attached, but the Thistle fanbase doesn’t buy that many Lottery Tickets, I’m afraid! Even when Colin Weir put just shy of £1 million into the Club in 2015, it wasn’t done unconditionally. It was done in exchange for 10% of new share capital plus a further 19% of share capital for the newly created PTFC Trust. Only those shares represented a permanent dilution for existing shareholders. And a much more drastic one than this deal at that! Dilution isn’t inherently bad for affected shareholders if it makes the underlying business more viable. Not having to worry about running out of cash this season is a really important outcome. It buys the Club time and security to restructure its off-field operations, and to become a more sustainable entity. And if the Club becomes profitable over a sustained period as a result of that breathing space, such that the shares eventually fall to be redeemed? Frankly I don’t grudge any investor getting their money back. Under any other arrangement: unsecured debt, secured debt, or another type of share? They’d have been seeking the same thing.

I’m not being coy! I just said! It’s 8-1-1. I’m simply pointing out that this information isn’t in any public documents yet (because of how the filings at Companies House work) but that they very soon will be.

I know you don’t Jim. I was teasing you! I think there is one important point here. Under the agreed fan ownership model, the PTFC Trust isn’t supposed to hold elections. What you’re describing are legacy arrangements as part of the transition. The PTFC Trust’s board appointments, for example, were made in November 2022, before the Short Life Working Group had even met to discuss bringing the fan groups together. As and when Richard and Neil step aside, there will be no individual trustees. The only trustees will be fan organisations. And under the trust deed certain decisions aren’t taken by the trustees at all, but by beneficiary vote. Including TJF members, Jags Trust members, and season ticket holders. This is democratic. This includes a tie-breaker mechanism where the trustees disagree with one another on any matter. The day-to-day democratic input comes, and will come more explicitly, through TJF as the transitional arrangements properly bed in. The PTFC Trust is a single organisation that holds 68% of the voting shares in the company. It represents more than 2000 beneficiaries (including more than 1650 members of TJF). Its leadership group includes, and will eventually consist exclusively of, democratically elected membership-based fan organisations. Yes. It has a greater reasonable expectation to be able to impact Club Board appointments, make decisions about investments, and make changes to the company rules, than an unorganised group of 200+ micro-shareholders, none of which individually holds more than 1.5% of the voting share capital, most of whom hold less than 0.2% of the voting share capital, and none of whom have come to a co-ordinated, collectively agreed view on the management of the company. I have gone to great lengths to show it’s not a thing, because you’ve thrown a big red herring into this discussion Jim. The whole point is that we are operating within a structure of company law, that then sets out and defines the rights of majority and minority shareholders. It is precisely the fan ownership vehicle’s structure that seeks to facilitate participation by fans. With the best will in the world, it’s the job of the PTFC Trust to represent its beneficiaries’ interests; not those of other shareholders.

This will be public domain information in the next Confirmation Statement (due in at Companies House in mid-November) - but it’s an 8-1-1 split.

It’s not “the establishment position”. It’s how all football clubs that are more than 50% but less than 100% fan-owned work. The several hundred St Mirren micro-shareholders making up 21% of its share capital have zero Club Board directors. The 1200 or so SMISA members are part of an organisation with the right to appoint 4 Club Board Directors (the majority). The Well Society owns (IIRC) 74% of the voting share capital of Motherwell. Its Club Board consists of just four board members. Two appointed by The Well Society when fan ownership was delivered, one who has been a board member since day dot (Jim McMahon) and one appointed in 2020 (Andrew Wilson) after a skills audit. The other shareholders have zero board representation, and none of them individually own (say) even 5% of the Club. Hearts is (IIRC) just over 75% fan owned, with Bidco (Anne Budge) having retained just over 17%, and the rest owned by hundreds of micro-shareholders. Their Club Board consists of two Foundation of Hearts reps, Anne Budge, and independent and executive directors appointed on a skills based audit. There is zero representation for micro-shareholders. The mechanism for inclusive democracy is the fan ownership vehicle, and through organisations that confer influence on a one-member-one-vote basis. This is the case with the elections held by TJF. This is the case with any beneficiary votes held under the PTFC Trust deed. Micro-shareholdings do not provide the basis for that. They would give, for example, Lord Smith of Kelvin ten times as much influence over the micro-shareholding director Jim seems to want as Jim would have. As other fan owned clubs have consistently shown, the appropriate board appointments mechanism is one that blends fan ownership vehicle representation and skills-based appointments. That is what we will be seeking to implement as part of the review of the Club-Trust relationship.

To be clear, this deal involves the issuing of voting redeemable preference shares. Hence the (for the time being) dilution of voting share capital. TJF attempted to pull together a group of investors in early 2023 on the basis of a non-voting preference shares model (Sandy alluded to this at July’s AGM) but for various reasons these efforts didn’t bear fruit.

No, not at all. I'm simply pointing out that the nature of their influence isn't, and never has been, through the boardroom. That isn't how private companies limited by share capital work. It's never been how they work. The influence of micro-shareholders is through the legal protections provided by company law. Always has been. Always will be. Nothing has changed in that respect. The whole point of the corporate trustee model is that, at the appropriate time, the individual trustees will step away and the PTFC Trust will be entirely controlled by democratically elected fan ownership groups. TJF has run two sets of elections in the last 18 months. It has a vibrant membership of over 1650 members. The turnout at its last election exceeded two-thirds of the eligible electorate. Every single TJF member is eligible to stand for election, and to become part of the leadership group. Many have done so, and put themselves up to the scrutiny of their fellow fans. The Jags Trust is obviously a much smaller organisation, but its constitution is a democratic one that requires elections to be held. It was precisely in the interests of bringing the fans together that the Working Group at the turn of the year recommended that they should be part of the revised fan ownership model. To demonstrate that this was not some TJF coup-d'etat but the arrival at a consensus between groups acting on behalf of the widest possible base of Thistle fans. The Jags Trust isn't represented on the Club Board Jim! It is one of four trustees that look after the fan ownership vehicle under company law on behalf of the beneficiaries. And that was a very worthy thing to do. It doesn't mean that you should be getting a seat on the Club Board though Jim. Again, that's a very worthy thing for you to do. But it doesn't mean you should get a seat on the Club Board! This was done historically for micro-shareholdings. There was never any expectation in the 1990s that these share purchases would give those shareholders any meaningful say over the composition of the Club Board. Micro-shareholdings were, by and large, symbolic momentos for individuals who wanted to support their Club in a time of need. Unlike (say) the historic investments of people like David Beattie, or Billy Allan, or Colin Weir, these were not big-ticket strategic investments into the football club, done with a view to getting a seat at the table to strengthen and influence the sustainability of the Football Club.

For now, Companies House has now published the new Articles of Association, and the associated documentation connected with the issuing of preference shares. This public domain information will demonstrate that everything disclosed by TJF and the Trustees in recent days about the new Articles, and indeed the previous ones, is completely accurate. For those interested, the old Articles can be accessed by scrolling back on Companies House to October 2011, when they were adopted.

It is completely normal for micro-shareholdings not to be entitled to director representation. This is the case both with limited companies generally and with fan owned football clubs specifically. St Mirren, like Partick Thistle, has hundreds of micro-shareholders. Their micro-shareholders actually make up over 20% of their issued share capital. Those micro-shareholders have zero representation on the St Mirren Club board. The only people with powers of appointment of directors are the fan ownership vehicle (SMISA) and the minority investor that facilitated the sustainable fan ownership partnership (Kibble). If Environmental Air Conditioning Limited (holder of less than 0.15% of the voting share capital in the football club) want to have a whip round to get the support of 200+ other shareholders and to raise the matter of their non-representation on the Club Board at the AGM they are free to do so. To the rest of the Thistle support, and indeed the other shareholders, I suppose my message would be that there’s a much easier way to influence who goes on the Club Board and that’s to get involved with the fan ownership vehicle through its democratically elected corporate trustees.

Whilst the decision to change the Articles of Association of a private limited company can be taken at an AGM (and often are), that is not a requirement and never has been (in modern times). Section 21 of the Companies Act 2006 stipulates that modification of Articles of Association of any company may be done by special resolution. Special resolutions do not require a general meeting of the company. They require only the agreement of 75% of the voting share capital. Where decisions need to be taken quickly and within the confines of legal and commercial confidentiality constraints, companies will often use a written resolution procedure rather than convene an AGM (which includes things like notice periods that can add delay). For what it's worth - in my personal view - Jim has a point when he says that the provision around altering quorum for Board Meetings is one that would be better dealt with at an AGM. I think this would be an entirely reasonable point for him, as a shareholder in the company, to raise at the AGM in November.

I should clarify: Lord Smith of Kelvin!

The principal investor has the right, under the Investment Agreement, to appoint a director or observer to the board, provided that they continue to hold a minimum number of preference shares. Once on the board, any such director would have one vote, just like any other director. The Investment Agreement has a mechanism built-into it that provides for the redemption of preference shares only with respect to a proportion of the excess above cash reserves of £2 million. The investors can’t simply walk away and get their cash back whenever they like. That would, simply put, completely defeat the purpose of the transaction! Redemption also does not have to occur if the annual accounts don’t show net positive cashflow or no distributable reserves. The redemption mechanism has very deliberately been set up to protect the Club and to ensure that the investment is only ever exited from as and when the Club is in a position of (unprecedented) financial strength.

It is a mechanism to allow an exit in the event the Club no longer requires the working capital brought with an investment. No more or less than that.

This will be explained in more detail in a TJF update (I hope) very soon. These things take time to communicate thoroughly, accurately and in a legally watertight way. And please remember that TJF's board consists entirely of 9 elected volunteers, each one of which has a full time job over and above this stuff.

A few observations, though some of this will be easier for folk to make sense of once Companies House has published the new Articles (which are in the vast majority of respects essentially the same as the old ones). Minority Shareholders Firstly, JJ's maths is a bit dodgy, or at least misrepresents the picture that existed before the investment deal was struck. Prior to the issuing of new preference shares, the shareholdings were as follows: ~74% - PTFC Trust 10% - The Weir Shares ~7.5% - The Jags Trust/Partick Thistle Supporters' Association ~8.5% - More than 200 minor shareholders (only one of whom holds as much as 1% of the shares, and that's Lord Kelvin with just under 1.5%) The idea that The Jags Trust should be lumped in with miscellaneous minority shareholders, rather than being regarded as part of the fan ownership arrangement is... eccentric. They are one of the trustees of the PTFC Trust! Their shareholding is also drastically larger than that of any of the smaller shareholders. The position of the minor shareholders (those with less than 2% each, most with less than 0.05% each), in practice, is practically unchanged. Their voting power has always been too small to affect the outcome of any vote following the sale of the Club to Three Black Cats in 2019 (which created a single majority shareholder for the first time in decades). They would always have been outvoted by the majority shareholder on any issue, and unable to block any decisions taken by an ordinary or special resolution. It is worth pointing out here that the main protections of minority shareholders in company law actually arise out of the Companies Act directly, rather than out of the Articles of Association or any Investment Agreements. The rights of the minority shareholders are exactly the same under the Act both before and after this investment. Removal of Directors Article 22 (which governs the termination of appointments of directors) is largely the same as it was before. For example, Article 22.1.2 - recently invoked by the PTFC Trust trustees - which allows a director to be removed by written notice endorsed by authorised representatives of the majority shareholding, is completely unchanged. The addition of Article 22.1.8, to which Jim refers, has nothing to do with the Club Board and the majority shareholder somehow "colluding" to remove anyone. There is absolutely no need for such a jointly exercised power, because the majority shareholder can already remove a director unilaterally! They don't need the Board's agreement! What this actually refers to is the interaction between the Investment Agreement and the right of the principal investor to appoint a director. This right depends on holding a minimum number of preference shares, and that right is lost if too many of the shares are redeemed. The new Article makes sure that the Club Articles align with that arrangement. Quorum for a Club Board Meeting The quorum for a meeting of the Club Board was three before these new Articles and it's still three now. This can only be changed by unanimous resolution of the board members.

No, that's not correct. Richard Beastall is very much still a director of the football club. As are Caroline Mackie, Andrew Holloway and Dougie McCrea. Four directors. It was Fergus Maclennan that resigned a few weeks ago.

No that’s nonsense. If the Club’s bank balance was over £2 million, redemption would only occur to the extent that this was the case. This would also reduce the number of preference shares still there, meaning that PTFC Trust’s effective voting shareholding rises from 67% (as would those of every other non preference shareholder). Getting their money back is mutually exclusive with keeping the preference shares. That’s how redemption works!

Worth noting that: (a) we have never had £2 million cash in the bank (b) redemption reduces the preference shareholding, increasing the fan owned shareholding back towards what it was before

I'm really not sure what's difficult to understand about the sentence: "For the avoidance of doubt, the dispute and the decision taken in relation to Alistair Creevy had absolutely nothing whatsoever to do with the investment process or outcome." I'm really not sure what's difficult to understand about the sentence: "For legal reasons we are not in a position, as a trustee of the PTFC Trust, to set out what those are. That is ultimately a matter between the Club Board and Alistair Creevy."

I'm not going to comment on the substance of the last 24 hours just now, for the obvious legal reasons. But I will say this. The last few weeks have been ******* exhausting. No more so than for the TJF Chair Sandy Fyfe. He has acted with complete integrity throughout on both the boardroom dispute and the, completely unrelated, investment process. Thistle fans will not find a better representative for their interests. At TJF we have always tried to build trust with our fellow fans, and set out to be as transparent with you as is possible. If what we say doesn't give you all the information you want, we'd hope you understand that there will be good reasons that information is not being disclosed. Fan ownership doesn't allow us simply to disregard legal and commercial frameworks within which all football clubs operate. And, unlike anyone else in this process, if you think we, the TJF board, have got it wrong, you can of course remove or replace us as your elected representatives. As a members' organisation, you ultimately hold the power over us.

"We, the TJF Board, in our capacity as a trustee, were alerted to a dispute between Mr Creevy and the other Directors of the Football Club. For legal reasons we are not in a position, as a trustee of the PTFC Trust, to set out what those are. That is ultimately a matter between the Club Board and Alistair Creevy." "It became clear to us, in recent days, that an agreed solution was not possible. There was no credible prospect of Alistair continuing to work with the remaining Club Directors. Our number one priority is to cause minimum disruption to the Club’s senior leadership group. Whatever the reasons that they could no longer work together, the fact is that they could not." "For the avoidance of doubt, the dispute and the decision taken in relation to Alistair Creevy had absolutely nothing whatsoever to do with the investment process or outcome."