Today the following message was sent to all club members.
Dear Member,
I bring you very sad news about the future of our Club.
In 2008 the Club signed a lease which means we now pay £160,000 a year for the use of our facilities. The Club has lost money every year since.
A rent of £160,000 a year is untenable for a members sailing club, unheard of within the sailing world. Queen Mary is probably the most comparable club to us pays some £20,000 a year. The only reason we have been able to continue is down to the reserves of the Club and the goodwill of the membership, both of which I believe are exhausted.
This year’s fall-off in membership renewals forced us to approach the landlord, Bewl Water Boating Ltd. to renegotiate the level of rent the Club has to pay.
The membership renewals looked initially strong and in-line with last year’s figures, more people renewed early. However it became apparent we had many fewer latecomers renewing. This in turn caused a revised view of the targets for training this year.
We have already paid the landlord some £39,943 in the first 3 months of this year, this is as much as any other inland club the RYA could give us figures for pays in an entire year.
Our request was for a rent-free period and to renegotiate the rent in-line with a level the Club could bear moving forward.
On Thursday 18th of June we received the outcome of these discussions and not only has the landlord refused any movement but in addition they have rescinded a longstanding agreement for us to pay our rent monthly. The landlord has presented us with an invoice for the next 3 months as per the terms or our original lease. This becomes payable Wednesday 24th of June making the club unable to pay its debts as they fall due.
The landlord’s action has had the direct result of making the club technically insolvent.
From our discussions with the landlord’s agent, we understand David Sullivan to have the controlling interest in Bewl Water Boating Ltd. owned by Kent Attractions LLP. who in turn owns the head lease to Bewl Water. David Sullivan is the co-owner of West Ham Football Club and as per Wikipedia is reported to be worth some £850 million. I am told David Sullivan that was the ultimate decision maker.
My view is that given the intransigence of the landlord, it would appear that he has no desire to see the Club continue, and he possibly has other plans for the site. We feel it would be prudent to assume the landlords actions in recovering their debt will be as hostile as the law permits.
This has radically reduced our options and our planned presentation at the EGM.
We are contacting our MP’s and Southern Water to lobby on our behalf as we believe this will likely fundamentally change the usage of Bewl Water.
Unless an alternative source of funding is made available to the club we are now unable to pay our debts as they fall due. The lease offers us 21 days of protection before the landlord can enter the premises, however with 7 days notice they could seize assets to cover their losses.
Unless the landlord can be persuaded to change their position this leaves us with 3 options to discuss at our EGM on Sunday.
- Members fund the shortfall, we would need some £40,000 to pay the rent immediately and then further significant funds throughout the course of the year. We would also need a Commodore and team to be co-opted that are prepared to take this on with the time and energy to turn the club around.
- The club goes into administration, administration offers additional protection over the clubs assets to stop the landlord seizing assets to cover the rent. This offers the best prospect of returning some value to all creditors including the member loans.
- The club goes into liquidation, this legally requires 21 days’ notice of another EGM, by which time the landlord would’ve likely seized the clubs assets and there would be no assets available for repaying any other creditors.
I will not argue for the membership to put their hands in their pockets as I believe it will only prolong the inevitable. As no prospective candidate for commodore has made themselves known, I don’t believe we will have currently a team in place with the time and energy to turn the club around.
As a director I am under legal obligation to consider the best interests of the creditors. I cannot approve utilising the overdraft facility which I have now instructed the bank to withdraw.
The Flag Officers felt we had no choice but to go to the court for a Notice of Intention to Appoint an Administrator, which we undertook on Monday morning. A copy of the filed notice is attached to this email.
Now this is in place a degree of protection is placed over the Club’s assets and the administrator is able to start negotiations with interested parties and advise the membership on whether there is any reasonable prospect of a deal or if winding up the club is our best option. These options will be presented at the EGM on the 28th.
I have sought advice from White Maund, an insolvency and administration practitioner who have specific experience acting for sailing clubs.
I plan to appoint them directly after the EGM on Sunday unless members can present a compelling alternative.
Once appointed I will relinquish my duties as a director and the Main Committee will have no further role.
As a result of this, the Flag Officers and Main Committee do not consider it likely that any member will need to offer at the EGM to be co-opted as Commodore for the rest of this year. We also do not think that there will be any resolutions for members to vote upon at the EGM.
We intend to hold the EGM as planned on Sunday; it will be an opportunity for members to hear from us what has happened over the past few months and for us and the intended Administrator to answer questions as best we can. We will not be circulating financial information in advance as it has been rendered obsolete and inaccurate by the most recent developments, but we will be able to discuss the finances at the EGM to the extent appropriate to do so. If an alternative proposal is put forward at the EGM then that can still of course be discussed at the time. An agenda for the EGM is attached to this email.
Given the current uncertainty I would urge all members to remove their boats from the site at their earliest opportunity.
As members of the club the Main Committee are deeply disappointed and saddened by this outcome.
I would like to offer my personal thanks to all the Flag Officers, Main Committee Members volunteers and Staff that have worked so hard to improve our fortunes.
The loss of BVSC will leave a big hole in my life, breaking the news to my daughter this morning was very tearful. It will be a tragic loss to the local community and sailing in the region.
Trevor Spink
Vice Commodore
