LOFT held a Special General Meeting (SGM) on Thursday 29 March, where its members approved the LOFT Board's proposal for handling refunds due from the Regeneration Fund. The full wording of that resolution is set out at the end of this report.
The fund was originally set up in March 2017 in order to deal with any one of three 'disaster recovery' scenarios at Leyton Orient FC – sale of the club, administration or liquidation. Since there is clearly no prospect of any of these happening soon under the club's new ownership, the legal advice obtained recently is that LOFT is obliged to offer refunds on those donations which meet the criteria set out in the original fund mandate.
The legal advice makes it clear that all fund monies not eligible for refund must remain in the Regeneration Fund and can only be spent on the 'disaster recovery' scenarios at Leyton Orient in the fund mandate. The only way that can change in the future is if LOFT passes a resolution at a future members' meeting to change the fund's purpose.
To be absolutely clear, LOFT does not propose to change the fund's purpose. The fund exists to save Leyton Orient from a crisis, and the club has faced financial crises at multiple times throughout its history. The new ownership at Leyton Orient is clearly enthusiastic and well-funded, but nobody can predict now what the club may face in the years to come.
Furthermore, if a future crisis did occur at Leyton Orient, questions would rightly be asked about what happened to the money raised by both Orient fans and fans of other clubs in 2017. It could well be extremely difficult to fundraise for a future crisis if the original 'crisis fund' had already been spent.
Therefore at this time, the c.£100k of the fund that is not eligible for refund will be kept for the Regeneration Fund’s original 'disaster recovery' purposes.
The remaining c.£80k of the fund is eligible for refund as per the original mandate, namely direct donations of £100 or more (or £20 or more) made by PayPal, the GoFundMe appeal, by bank transfer or by cheque. All other donations, including all cash put in donation buckets, are not eligible for a refund.
The meeting passed a resolution stating that those with the right to a refund should be given four options:
The purpose of the option to give the refund to LOFT's general funds is so that we can consider giving money to football community causes at Leyton Orient, similarly to how the Supporters Club spends its annual profits. It would also allow us to consider supporting other Trusts whose clubs are in crisis, in the same way that we were supported by other Trusts.
And to be absolutely clear, the only fund monies that will be spent on football community causes (whether at Leyton Orient or elsewhere) will be those refunds voluntarily given back to LOFT.
What happens next?
We will make best endeavours to get in contact during April with the c.350 people who are eligible for a refund, and ask them to complete a form setting out the options above:
The deadline for claiming a refund will be 31 October 2018, after which time any refunds unclaimed will be 'locked in' to the Regeneration Fund and no further refunds can be made.
We will report back at our AGM towards the end of the year (i.e. after 31 October) how much remains in the Regeneration Fund, how much has been donated back to be spent on football community purposes, and how much has been refunded.
The full wording of the resolution adopted at the SGM:
That the Society Board will, in accordance with the Regeneration Fund mandate adopted on 2 March 2017 and legal advice received in February 2018, carry out the following:
Register for updates: