DAVID CONN ARTICLE: BATCHELOR - `I DO ASSET-STRIP`
'I do asset-strip' says the man who wants Mansfield
John Batchelor may not rename them Harchester but insists he will make a profit from Stags' distress
Wednesday April 9, 2008
Full article here here
John Batchelor first rolled into football in March 2002 when he bought York City for £1 from the then majority owner Douglas Craig, who was threatening to withdraw the club from the Football League and sell the ground for housing.
Craig wanted £4.5m for Bootham Crescent and the supporters' trust agreed to back Batchelor's takeover because he said he had the money to buy it. He also promised he would give the trust a decisive 25.1% of the club's shares.
Batchelor whipped up some headlines for his idea to "brand" York City together with his motor racing team, but that was froth on impending financial meltdown and in December 2002 he put the club into administration. The fans' sense of betrayal that he never came through on his promises was then deepened by the discovery that he had made more than £300,000 from his association with the club.
The house builders, Persimmon, had agreed to buy Bootham Crescent and had paid £400,000 to Batchelor for sponsorship of "York Sporting Club", intended to be a merger of the football club and motor racing team. Batchelor paid £100,000 of it into the club, then steadily withdrew all but £30-40,000 to pay for his entertainment and expenses. He kept the other £300,000, spending a chunk of it on the car-racing, and while York were plunged into trauma he bought a house for £250,000.
Little was heard publicly of Batchelor after that - until now, when he has thundered back as the man most likely to take over Mansfield Town, although after the public outcry he is likely not to rename the club Harchester United and feature them as a TV dream team. They are another struggling club, on sale for £1 by a profoundly unpopular owner, Keith Haslam, and in danger of relegation from the Football League.
Batchelor's business record, available for scrutiny via Companies House, will not reassure any Mansfield fan that he has greatly changed. Of 24 companies of which he has been a director, 14 have been or are about to be struck off the companies register, six have been insolvent, three are still going but he is no longer involved - he says he sold them on successfully - and only one small company in which he is a director is active.
One company Batchelor took over - although he did not become a director; his partner, Cheryl Hopkins, did - was Moornate Chemists in Nelson, near Burnley, a steady, solvent, family business selling cleaning products. Within three months, last July, Moornate was insolvent and in administration, after effectively being merged with another company he took over, Besglos, which was also in administration the following month.
David Brown, Moornate's former owner, says Batchelor promised to pay him £485,000 for the business, in instalments, and did pay him £70,000 up front. However, he has been left devastated, without the business he built up over 30 years, and still owed £415,000 of the price agreed. Batchelor, however, has said he bought and sold Moornate's factory, making £75,000 for himself.
"He ruins people's lives and walks away with money," Brown says. Several former staff of Besglos, and their families, are still struggling to recover, having moved to work for Batchelor on the promise of handsome salaries, then been left unpaid and lost their jobs.
Brown recalls that in one meeting Batchelor told him: "This is what I do for a living: I fuck companies."
Batchelor himself turns out to be not only frank about admitting all this but determinedly so. He says he spent a month in late 2006 in hospital for alcohol dependency and now feels he must give straight answers to questions.
So, of his original promises to the York City supporters' trust, he acknowledges: "Basically, I was lying to them. There is no way of dressing it up."
He says he worked for many years selling hygiene products, then had a midlife crisis aged 38 and decided to chase excitement, which led him to chance his luck in football.
"When I walked through Douglas Craig's door," he recalls, "I really was a toilet-roll salesman with nothing more than a load of debt."
He admits to having cleared £120,000 personally from the York sponsorship money and spending some of it on his racing team.
Of his line of business he says openly: "I do asset-strip. I have realised if you follow the right procedures you can borrow against a company's assets to take it over. I target companies in financial distress. We try to fix them - some of my companies have gone on to do very well and I have sold them. Where I can't, I can arrange a 'pre-pack', agreeing beforehand what I will pay for assets, then put the company into insolvency. The suppliers and creditors fall away and I am left with a clean company."
Batchelor is plain: he always seeks to emerge with money himself. Of the human cost of the Moornate and Besglos insolvencies, he maintains he has "no pangs of conscience" and says: "I have always worked, brutal though it sounds, within the boundaries of what is legal."
His plan for Mansfield is to make money by selling the club on to the fans, and - with marketing of a similarly outlandish vein to the Harchester United idea - take for himself 25% of any profits the club then make.
Haslam, Mansfield's sole director for 15 years, bought the club originally for £1, then was responsible for redeveloping Field Mill between 1999 and 2001 in a deal with the builders Bowmer & Kirkland. However, he enraged many supporters later by taking out £585,142 in personal loans from the club, of which £239,297 was "written off" - the most recent accounts show that he has repaid the balance. Those loans were unlawful, because directors are prohibited from borrowing more than £5,000 from their companies. The club have also loaned over £580,000 to Haslam's holding company, Stags Limited, which bought land in Skegby, near Mansfield, to build an academy.
Both Batchelor and James Derry, a businessman who has tried to buy the club, say Haslam is offering Mansfield Town for £1 but wants to keep Field Mill and charge £275,000 annual rent to the club, or £175,000 if Mansfield are relegated to the Conference. Both say Haslam intends to keep the Skegby land, with the club effectively required to write off the loan to Stags Ltd. Neither Haslam nor Stephen Booth, Mansfield's chief executive, would confirm whether those are indeed the terms Haslam is seeking.
Most depressing to many Mansfield fans is that the football authorities are apparently powerless to act as one of the game's long-standing town clubs, formed in 1897, lurch into this unseemly stand-off. The Football League has a "fit and proper persons test" for football club directors and substantial shareholders but it does not bar from involvement people, such as Haslam, who have committed breaches of company law, or those with serial insolvency records, in and out of football, such as Batchelor. The disqualification applies to any person with unspent convictions for dishonesty, anyone who is bankrupt, and anyone who has run a football club into insolvency twice.
John Nagle, the Football League's spokesman, explained: "In order to make the test meaningful and workable it has to be based on clear objective criteria rather than a subjective judgment of someone's suitability." Which means that if Haslam, or any other owner, is fed up or unpopular enough to sell to him, John Batchelor could have his hands on another football club tomorrow.
Lifelong fan made loss but is not fit and proper
The chairman of Rotherham United has become the first director of any English football club to be disqualified under the "fit and proper persons test". Denis Coleman took the Millers over in March 2006, and quickly cut its losses via a company voluntary arrangement. However, the club, whose former chairman, Ken Booth, owns the ground, still struggled, Coleman could not secure investment, and last month it went into administration. That constitutes a second "insolvency event" while Coleman has been on the board, so under the test he cannot be a football club director or 30% shareholder. "I am a lifelong fan," Coleman complained. "I took over because the club was in trouble. We had to do the CVA to save it. Being involved has cost me money, I have not had a penny out, unlike people at some other clubs, yet I am barred and they can be involved. That's ludicrous."
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