Quote:
Originally Posted by LlayDragon
Do you have a link to the whole response please?
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Gate Approval Response:
Society Board’s Background Information:
Based on legal advice, including on the wording of this resolution, the Board opposes the resolution and advises members to vote against it.
The improvements made by the Society in the financial position of Wrexham AFC since 2011 and the acquisition of the business, trade and assets used in the operation of the Racecourse Ground make Wrexham AFC a much more attractive business than that which we inherited. The Gateway Approval Process was approved by members only last year to provide the board with general direction and guidance and a process to follow should an investment approach be made. The resolution introducing it in 2018 was a non-binding resolution to assist the Board in considering members’ views when considering approaches.
The acceptance of any investment into WAFC will ultimately be a matter to be decided upon by the members of Society, the gateway process does not authorise the Society Board to agree to or accept any investment into WAFC bearing in mind that one of the most important objectives of the Trust is upholding the mutual ownership of the Club.
Against that background, our legal advice has described removal of stage 8 as “making no sense”.
The board must have some qualitative judgement on an investor’s business plan and proof of funding before presenting the investor’s plans to the members otherwise that could lead to sound business plans to liquidate the club and distribute the assets, as an extreme example, being presented to the members. There is also the not inconsiderable time and resource required to present even the most speculative of approaches to the membership.
Board members are elected by the membership who thereby delegate considerable powers and responsibilities to those board members who can be voted off the board should the membership so wish. Part of that responsibility is to act in the interests of Trust and Club and, as set out in the gate approval process, to decide whether an investment approach meets the criteria so as to be presented to the membership.
It is not normal for companies to place speculative investment proposals to its members. The risk of loosening the process could lead to a repetition of the near farce which occurred when the previous owners were attempting to sell the club.
We strongly advise members to vote against this proposal.
NDA Response:
Society Board’s Background Information:
Based on legal advice, including on the wording of this resolution, the Board opposes the resolution and advises members to vote against it.
The non-disclosure agreement (NDA) to be used when applying the gate approval process was drafted having received appropriate commercial legal advice. It is perhaps surprising that the proposer is aware of the content of the NDA adopted by the Trust but, putting that to one side, commercial NDAs often contain a liquidated damages clause to create an effective deterrent to breaches of the terms of an NDA. A party entering into an NDA in good faith will rarely have an issue as if they do not wrongfully disclose information, they will have no liability. A liquidated damages clause of £2,000 according to the advice we have received “simply has no teeth”. And of course, it would be the football club which would be disclosing particularly sensitive commercial information should the process proceed.
As to the unilateral nature of the liquidated damages clause this is entirely logical as it protects the disclosing party which in this instance is the Football Club. The board have a duty to protect commercially sensitive information which would include sensitive information relating to individuals. Without an effective NDA in place they would be failing in that duty and could not sign one with such a low damages clause based on the advice received.
The board have to apply the set criteria when considering an approach under the gateway process. One of which is that the investment proposal is genuine and actually funded and another is that the Trust’s confidential information is protected. By signing what has been described to us as an NDA “without teeth” we would be in breach of those criteria, and others, and therefore strongly recommend members to vote against the proposal.