Ptfc Trust Update

[ARu-Strathbungo]

26 minutes ago, Jordanhill Jag said:

Thats my reading also - its the Democratic Republic of North Glasgow ( DRNG) -  if Im reading it correctly - the Trust can Vote for the Election of Directors or Abstain - they cant Vote against the Election of Directors  - which defeats the purpose of Fans having shares and exercising any Authority over them -  I would hate to think that the Board would use this Share Block to fight off any takeover - as they belong to the Fans not the Board  - and any big decision like that should be voted upon by the Trust Members-  prior to any decision - without it - the default position would be to abstain in any vote 

But in simple terms - this cant continue in its present form .............

 

And that other body … the Jags Trust? what are they in relation to this organisation I wonder? They have 7.46% of shares making the two together owners of 26.74% of PTFC.

This is not the 'fan ownership' I thought it would be.

[Jordanhill Jag]

22 minutes ago, ARu-Strathbungo said:

And that other body … the Jags Trust? what are they in relation to this organisation I wonder? They have 7.46% of shares making the two together owners of 26.74% of PTFC.

This is not the 'fan ownership' I thought it would be.

Jags Trust have nothing to do with Current Trust - they are a fully independant body  

[Norgethistle]

The fans are gifted shares.

A trust is set up to represent the fans.

The board has no shares.

The board takes the fans shares.

The trust says nothing.

The fans have no shares.

The board have free shares.

Fans find out 4 years later.

The fans are shafted.

 

”Trust “ is the wrong term to use for this organization, we’ve became a banana republic 

[stolenscone]

1 hour ago, Jordanhill Jag said:

Thats my reading also - its the Democratic Republic of North Glasgow ( DRNG) -  if Im reading it correctly - the Trust can Vote for the Election of Directors or Abstain - they cant Vote against the Election of Directors  - which defeats the purpose of Fans having shares and exercising any Authority over them -  I would hate to think that the Board would use this Share Block to fight off any takeover - as they belong to the Fans not the Board  - and any big decision like that should be voted upon by the Trust Members-  prior to any decision - without it - the default position would be to abstain in any vote 

But in simple terms - this cant continue in its present form .............

 

Jim - if you are referring to Clause 5 of the original Trust Deed, then that is not what the clause says:

It begins by saying that Trustees can exercise all voting rights in a full and free manner as if they were absolute owners [of the shares].

You have homed in on the following wording which says that "... in particular [the trustees] may exercise such voting rights by either voting or by abstaining from voting so as to ensure or further the appointment or reappointment  of any one or more of their number to be directors ...".

Use of "in particular" means that the stuff about voting for directors is not exclusive. It is simply indicitave of one thing that the Trustees can do - they can still vote in any manner and on any thing that they like, so long as the absolute owner of the shares has the right to so vote per the Companies Act and Memo & Arts of the company.

In fact, all the wording about voting on a director is intended to do is to make it clear that the Trustees are entitled (but not obliged) to vote for one of their own number (ie for one of the Trustees) as a director of PTFC. Whoever drafted it probably thought it worthwhile to expressly mention this in case there was a future query about conflict of intetest between the director and trustee roles.

[Jordanhill Jag]

8 minutes ago, stolenscone said:

Jim - if you are referring to Clause 5 of the original Trust Deed, then that is not what the clause says:

It begins by saying that Trustees can exercise all voting rights in a full and free manner as if they were absolute owners [of the shares].

You have homed in on the following wording which says that "... in particular [the trustees] may exercise such voting rights by either voting or by abstaining from voting so as to ensure or further the appointment or reappointment  of any one or more of their number to be directors ...".

Use of "in particular" means that the stuff about voting for directors is not exclusive. It is simply indicitave of one thing that the Trustees can do - they can still vote in any manner and on any thing that they like, so long as the absolute owner of the shares has the right to so vote per the Companies Act and Memo & Arts of the company.

In fact, all the wording about voting on a director is intended to do is to make it clear that the Trustees are entitled (but not obliged) to vote for one of their own number (ie for one of the Trustees) as a director of PTFC. Whoever drafted it probably thought it worthwhile to expressly mention this in case there was a future query about conflict of intetest between the director and trustee roles.

David - thanks for clarification 

[jaf]

38 minutes ago, stolenscone said:

Jim - if you are referring to Clause 5 of the original Trust Deed, then that is not what the clause says:

It begins by saying that Trustees can exercise all voting rights in a full and free manner as if they were absolute owners [of the shares].

You have homed in on the following wording which says that "... in particular [the trustees] may exercise such voting rights by either voting or by abstaining from voting so as to ensure or further the appointment or reappointment  of any one or more of their number to be directors ...".

Use of "in particular" means that the stuff about voting for directors is not exclusive. It is simply indicitave of one thing that the Trustees can do - they can still vote in any manner and on any thing that they like, so long as the absolute owner of the shares has the right to so vote per the Companies Act and Memo & Arts of the company.

In fact, all the wording about voting on a director is intended to do is to make it clear that the Trustees are entitled (but not obliged) to vote for one of their own number (ie for one of the Trustees) as a director of PTFC. Whoever drafted it probably thought it worthwhile to expressly mention this in case there was a future query about conflict of intetest between the director and trustee roles.

David, yes because you would have thought that a trust with a majority of the positions held by club directors, notionally for the benefit of the supporters, may well have conflict of interest issues all over the place. One would expect in many walks of life, those concerned to, for example in event of a possible takeover where they may lose their offices,  exempt themselves from influencing and voting on the Trusts position. My reading however is that the Trust Deed specifically (at 11.1) states that not only does the Board have de facto control of this parcel of shares through the trust they are also immune from any conflict of interest challenge? 

 

[jaf]

One week ago :

The board have no shares, the fans have 27%.......

This week :

The board are in effect our biggest single shareholder without ever having paid a penny for the shares, the supporters having a mere 7%...

What a difference a week makes.

 

 

[erty13]

The board are Partick Thistle.

[Norgethistle]

1 minute ago, erty13 said:

The board believe they are Partick Thistle.

Fixed it for you

[stolenscone]

1 hour ago, jaf said:

David, yes because you would have thought that a trust with a majority of the positions held by club directors, notionally for the benefit of the supporters, may well have conflict of interest issues all over the place. One would expect in many walks of life, those concerned to, for example in event of a possible takeover where they may lose their offices,  exempt themselves from influencing and voting on the Trusts position. My reading however is that the Trust Deed specifically (at 11.1) states that not only does the Board have de facto control of this parcel of shares through the trust they are also immune from any conflict of interest challenge? 

 

Sandy - I confess that I haven’t been over the deed in any great deal. I just had a quick look to respond to Jim’s point. I’ll take a look at Clause 11 and circulate my thoughts.

[stolenscone]

1 hour ago, jaf said:

David, yes because you would have thought that a trust with a majority of the positions held by club directors, notionally for the benefit of the supporters, may well have conflict of interest issues all over the place. One would expect in many walks of life, those concerned to, for example in event of a possible takeover where they may lose their offices,  exempt themselves from influencing and voting on the Trusts position. My reading however is that the Trust Deed specifically (at 11.1) states that not only does the Board have de facto control of this parcel of shares through the trust they are also immune from any conflict of interest challenge? 

 

Sandy - I’ve had another look at the deed. I’ll caveat my following comments by saying that I’m not (and don’t pretend to be) a corporate lawyer. That said:

Clause 11 of the main trust deed attempts to deal with conflicts of interest. It makes it clear that having dual interests (eg director and trustee / trustee and shareholder) does not necessarily require the trustee to absent him/herself from a vote. Material conflicts need to be disclosed.

Personally, I don’t think that you can contract out of a conflict of interest. The trustee must be mindful that they always have an underlying duty of care to the beneficiaries, and any trustee seeking to take advantage of this provision in the trust deed would still (in the event of there being a material conflict of interest) be laying themselves open by a claim of breach of trust by a beneficiary if it could be argued that the trustee’s decision was not in the best interests of the beneficiaries. 

Of course, this sort of thing can be difficult to prove, but if I was a trustee, I would be extremely nervous about putting myself in that position.

I note from the 2018 variation that the min number of trustees has been evened up: x3 directors and x3 supporters. That makes much more sense, if this is not to be viewed as a rather skewed power grab.

I wasn’t 100% clear from the deed about how decisions are taken, but since a simple majority is needed to make a quorum, my working assumption is that a simple majority can take a decision. I may have missed the operative wording, however.

In light of the evening up of the trustee composition (x3 directors / x3 supporters), I’m not sure that I fully understand your comment about the Board having de facto control of this parcel of shares, but again, I may have missed something.

NB the 2018 variation refers to an earlier variation, which I have not seen and which is not saved to the website. I don’t know what it says or how it affects my comments above.

best wishes

David

[jaf]

36 minutes ago, stolenscone said:

Sandy - I’ve had another look at the deed. I’ll caveat my following comments by saying that I’m not (and don’t pretend to be) a corporate lawyer. That said:

Clause 11 of the main trust deed attempts to deal with conflicts of interest. It makes it clear that having dual interests (eg director and trustee / trustee and shareholder) does not necessarily require the trustee to absent him/herself from a vote. Material conflicts need to be disclosed.

Personally, I don’t think that you can contract out of a conflict of interest. The trustee must be mindful that they always have an underlying duty of care to the beneficiaries, and any trustee seeking to take advantage of this provision in the trust deed would still (in the event of there being a material conflict of interest) be laying themselves open by a claim of breach of trust by a beneficiary if it could be argued that the trustee’s decision was not in the best interests of the beneficiaries. 

Of course, this sort of thing can be difficult to prove, but if I was a trustee, I would be extremely nervous about putting myself in that position.

I note from the 2018 variation that the min number of trustees has been evened up: x3 directors and x3 supporters. That makes much more sense, if this is not to be viewed as a rather skewed power grab.

I wasn’t 100% clear from the deed about how decisions are taken, but since a simple majority is needed to make a quorum, my working assumption is that a simple majority can take a decision. I may have missed the operative wording, however.

In light of the evening up of the trustee composition (x3 directors / x3 supporters), I’m not sure that I fully understand your comment about the Board having de facto control of this parcel of shares, but again, I may have missed something.

NB the 2018 variation refers to an earlier variation, which I have not seen and which is not saved to the website. I don’t know what it says or how it affects my comments above.

best wishes

David

Hi David, thanks for the response and I agree with all you write re conflicts of interest

As for my point on control I had not noticed the deed of variation at the time,  the issue of a deadlocked vote would be interesting to understand where casting vote sits, and my understanding for the moment is that the Supporters Trustees are a board appointee and two elected trustees; this may of course alter in line with the Trust deed in due course, but a Supporters trustee whose position is in the gift of the Board would not be ideal.

So progress for sure, by the late 2018 variation - though the conflict of interest cause is concerning, because although your points are valid, what would be the point of it, if people were going to correctly exempt themselves from conflicted proceedings?

 

 

 

 

[Jordanhill Jag]

7 minutes ago, jaf said:

Hi David, thanks for the response and I agree with all you write re conflicts of interest

As for my point on control I had not noticed the deed of variation at the time,  the issue of a deadlocked vote would be interesting to understand where casting vote sits, and my understanding for the moment is that the Supporters Trustees are a board appointee and two elected trustees; this may of course alter in line with the Trust deed in due course, but a Supporters trustee whose position is in the gift of the Board would not be ideal.

So progress for sure, by the late 2018 variation - though the conflict of interest cause is concerning, because although your points are valid, what would be the point of it, if people were going to correctly exempt themselves from conflicted proceedings?

 

 

 

 

The only way that something that could be a potential conflict of interest could be addressed is by - exempting yourself from proceedings - Trust abstaining in the Vote - or go to your Membership and ask for a Mandate via them voting on the subject 

there is always a duty of care - exemption from conflict of interest doesn't remove that   

 

[stolenscone]

Indeed. The composition and manner of appointment of trustees is integral to your question.

Absent other provisions, the normal approach to a deadlocked decision would be for the meeting chair to have the casting vote, so yes, it could be manipulated.

Personally, if I was a supporter appointed trustee and I had genuine concerns that a major decision was being taken by the trustees which was not in the best interests of the supporters at large, then I would strongly consider going public and calling out the fellow trustees on the matter, particularly if there was a strong conflict of interest issue.

In saying this, I mean a genuine and well founded concern - not merely a difference of opinion.

In that context, it would take a very bold conflicted trustee to plough on and be damned, this opening themselves up to a potential (personal) legal action.

Anyway, I’m not a trustee and have no skin in this particular game, other than as an interested observer. I also have no inside knowledge of what’s going on behind the scenes (if anything).

[Third Lanark]

Just now, Jordanhill Jag said:

The only way that something that could be a potential conflict of interest could be addressed is by - exempting yourself from proceedings - Trust abstaining in the Vote - or go to your Membership and ask for a Mandate via them voting on the subject 

there is always a duty of care - exemption from conflict of interest doesn't remove that   

 

According to you it’s not definite a takeover is planned everytime you are asked about this, yet it’s the only thing you seem to constantly comment on repeatedly on a daily basis so presumably you know a lot more than your telling.

Your only commenting on the board being undemocratic regarding shares but you are presuming every single jags fan is in favour of a takeover- if you have been reading all the posts you will see that is far from the case, I still have concerns. 

Just because your completely in favour of it don’t presume everyone else is

[Third Lanark]

1 minute ago, stolenscone said:

Indeed. The composition and manner of appointment of trustees is integral to your question.

Absent other provisions, the normal approach to a deadlocked decision would be for the meeting chair to have the casting vote, so yes, it could be manipulated.

Personally, if I was a supporter appointed trustee and I had genuine concerns that a major decision was being taken by the trustees which was not in the best interests of the supporters at large, then I would strongly consider going public and calling out the fellow trustees on the matter, particularly if there was a strong conflict of interest issue.

In saying this, I mean a genuine and well founded concern - not merely a difference of opinion.

In that context, it would take a very bold conflicted trustee to plough on and be damned, this opening themselves up to a potential (personal) legal action.

Anyway, I’m not a trustee and have no skin in this particular game, other than as an interested observer. I also have no inside knowledge of what’s going on behind the scenes (if anything).

But that’s it some people have as many concerns over the consortium as they do the board, just because some people shout loudest and are desperate for a takeover to happen does not mean even the majority of fans do

[Jordanhill Jag]

1 minute ago, Third Lanark said:

According to you it’s not definite a takeover is planned everytime you are asked about this, yet it’s the only thing you seem to constantly comment on repeatedly on a daily basis so presumably you know a lot more than your telling.

Your only commenting on the board being undemocratic regarding shares but you are presuming every single jags fan is in favour of a takeover- if you have been reading all the posts you will see that is far from the case, I still have concerns. 

Just because your completely in favour of it don’t presume everyone else is

If you read my post I have clearly stated  that in key decisions where there is a Conflict they should go to there Members and seek a Mandate 

[stolenscone]

9 minutes ago, Jordanhill Jag said:

The only way that something that could be a potential conflict of interest could be addressed is by - exempting yourself from proceedings - Trust abstaining in the Vote - or go to your Membership and ask for a Mandate via them voting on the subject 

there is always a duty of care - exemption from conflict of interest doesn't remove that   

 

Jim - I suppose the other way of looking at it is that if there’s a strong difference of views between Board and Supporter appointed trustees, then taking the moral high ground and simply abstaining from a vote may hand control to the other grouping. (Our supporters’ groups have a long and proud history of abstaining!)

But really, this kind of scenario envisages the relationship between factions of trustees operating at the very limit of being a functional relationship. I can only really see it happening in the case of a fundamental breakdown.

And that’s where the agreement seems to fall down. I can’t see that it addresses what should happen if the wheels fall off. Logic dictates that the whip hand should sit with the supporters in those circumstances - it is supposed to be a supporters’ trust, after all - but unless I’ve missed it, the drafting doesn’t seem to cater for it.

[stolenscone]

12 minutes ago, Third Lanark said:

But that’s it some people have as many concerns over the consortium as they do the board, just because some people shout loudest and are desperate for a takeover to happen does not mean even the majority of fans do

Matt - just for clarity, I am not offering an opinion on any potential takeover, and I am not seeking to influence the opinions of others. My intent is just to provide some balanced analysis of the practical effect of the Trust Deed. What people do with that is up to them, but hopefully it may help some people to come to a more informed view.