Re: Bryn Law puts forward 'Gate Approval Process' changes and NDA changes
 

[QUOTE=LlayDragon;2264203]Do you have a link to the whole response please?[/QUOTE]

[B]Gate Approval Response:[/B]

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.

[B]NDA Response[/B]:

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.

Re: Bryn Law puts forward 'Gate Approval Process' changes and NDA changes
 

[QUOTE=Todd Sweeney;2264204]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.[/QUOTE]

One sided legal opinion but lawyers are generally paid to advise on protecting the interests of the instructing party so no surprise. You cannot fairly expect the other party not to have reciprocity. Yes the club may disclose information of a sensitive nature but its most certain when you ask for proof of funds that the other party will as well.

At the moment the way its structured any of the board or the board in its entirety may disclose the financial details of an interested party without penalty, that's just not right. NDA's must be fair and reciprocal. Otherwise rightly they may be deemed as a gate keeping procedure ensuring no right minded entity whether individual or corporate would sign it so therefore not proceed.

Re: Bryn Law puts forward 'Gate Approval Process' changes and NDA changes
 

[quote=Phils-an-alki;2264188]Trust? That's long gone. I wouldn't trust that lot as far as I could throw them.

Its just putting ridiculous unnecessary obstacles in the way as a way of blocking investment and therefore they retain the power. Far to easy to say legal advice without going into detail and providing evidence.

[B]Never heard that about Hamilton before but I was wondering when someone would hark back to the past as part of the justification[/B].[/quote]


Why shouldn't we look back to what happened? You learn from history.

Re: Bryn Law puts forward 'Gate Approval Process' changes and NDA changes
 

Also with the two boards being more leaky than a sieve you can understand why the NDA is truly off-putting to anyone with a brain cell.

Re: Bryn Law puts forward 'Gate Approval Process' changes and NDA changes
 

[QUOTE=bartonbank;2264210]Why shouldn't we look back to what happened? You learn from history.[/QUOTE]

That's not what I said, is it.

Re: Bryn Law puts forward 'Gate Approval Process' changes and NDA changes
 

[QUOTE=Phils-an-alki;2264145][I]"Furthermore, the fact the potential investor must then make a 5k payment to facilitate a second meeting and provide a business plan and proof of funding, [B]but the Society board still has the right to end the process at this stage without disclosing the detail to the membership[/B] is unlikely to encourage credible investors to pursue the process to
this stage. There are good and bad investors out there, my contention is that whilst this process is rightly designed to discourage those whose intentions could be harmful, it’s actually too restrictive and is actually discouraging even those with positive intentions."[/I]

There it is.[/QUOTE]

Few things come to mind.
An NDA for £2k is peanuts even for a chancer. £50k might be too high for some genuine "investors"
£20k seems a fair figure but it's not going to change at this meeting.
A groundswell of opinion might encourage the board to rethink the basic terms of this part of the process.
The fact that the club can stop the process without disclosing the details to the membership, suggests that the NDA is a 2 way thing. Whether the penalty works both ways is debatable.
It doesn't prevent the club from informing the membership that there had been an approach.
Secondly. £5k is not to set up a second meeting, it's to protect the club from the cost of due diligence. A £5k deposit to carry out due diligence is not an onerous figure and is a realistic amount for employing the accountants etc to fully investigate the proposals and the proposer.
Finally. If Bryn's contact was serious about "investing" and had been put off by the terms, it would not have been unreasonable for them to have gone public about their offer.

Re: Bryn Law puts forward 'Gate Approval Process' changes and NDA changes
 

[QUOTE=Rob;2264185]A simple disclosure would help, every year a simple "X entities enquired about entering the Gate Approval Process, Y entered it and Z completed it"

Reasons for failure were.... then some default lines eg. no proof of funds, directors were a bunch of crooks, euromillions winner wanted the club for £1m its worth more, they loved rockin robin too much etc etc.

Personally I think the above would knock a fair few issues on the head.[/QUOTE]

This seems a good compromise. I am not entirely satisfied by the current process but equally I'm not convinced of Bryn's resolutions are workable or get to the heart of the issues.

Re: Bryn Law puts forward 'Gate Approval Process' changes and NDA changes
 

[QUOTE=bartonbank;2264210]Why shouldn't we look back to what happened? You learn from history.[/QUOTE]

Well you should but that doesn’t apply here. We rinse and repeat.

We don’t even know what Bryan Law is proposing. That is madness of the highest level.

Re: Bryn Law puts forward 'Gate Approval Process' changes and NDA changes
 

No point whatsoever in having a 2k penalty in a NDA. Anyone with bad intents is hardly going to be put off by that. There has to be a serious fine for using our sensitive information against us. Maybe 50k is too high but 2k would make an essential NDA an irrelevance.