Posted by John Beech on October 25, 2009
With several court appearances due to consider various aspects of insolvency at different clubs, now seemed a good time to take a broad look at clubs that have been in trouble recently:
Bournemouth has been well covered in postings passim. £150,000 is due to HMRC but the club’s bank account remains frozen. Eddie Mitchell is adamant that the funds are available however (1). This impasse will need to be resolved, as the winding-up order heard on 5 October resulted in six-week stay of execution. The club remains seriously affected by a transfer embargo, yet still manages to be top of League 2.
- Chester City
Again, this has been covered in postings passim. The club faces expulsion from the Conference as it “has not complied with the terms of the compromise agreement set by the Football Conference to allow the club to participate in the competition at the commencement of the current season” and football creditors Wrexham and Vauxhall Motors remain unpaid The deadline to comply is 17:30 tomorrow, 26th. October (2). The club also remains under a transfer embargo.
The club came out of Administration in August, under the control of new owner Raj Singh (3).
- Halesowen Town
See postings passim. Two offers have been made to the Administrators, one from the Ingram brothers, who have stated that they have no intention of involving Morell Maison with the club in the future, and the other from Robert McNaughton. Creditors are to decide on 11th. November which bid to accept, both having been cleared by the FA (4). In the meantime, investigations contnue regarding alleged fraud (which relates to the club) by previous owner/manager Morell Maison (5). In an unrelated case former Halesowen Town chief executive Guy Simpon has appeared in court charged with evasion of customs duty after counterfeit cigarettes with a retail value of around £5.3m were imported into the UK (6). [Did someone mention Fit and Proper Person tests? ]
- Merthyr Tydfil
The Supporters Trust are now running the club under licence from the Administrator (7) and new sponsorship has been secured (8). Annis Abraham has recently reappeared as a potential buyer of the club however (9).
- Northwich Victoria
A debt of £450,000 to HMRC remains a hurdle to moving into an agreed CVA (10). As is all too often the case with clubs in deep debt, dreams are being refloated of buying the stadium back (11) – dreams are fine, but perhaps clearing the HMRC debt should be a tad higher as a priority.
At the end of July (the club has been in Administration since last November) the club announced that coming out of Administration was going to happen in ‘the very near future’ (12). I’ve not managed to find any more recent news, but have not been helped by the fact that my browser seems to take a strong dislike to the club’s website!
One offer for the club had been received by the Administrator’s deadline of 1st. October, but negotiations with HMRC and the club’s debt of £200,000 appear to remain ongoing barriers to progress (13). Would-be purchaser is a consortium consisting of William Harrison-Allan (chief executive of the Country Gentlemen’s Association), Jeff Hooper (wholesale florist), and Chris Bramall (managing director of Wilton Carpet Factory) (14). [Honestly, I'm not making that last bit up - click through if you don't believe me.]
- Stockport County
The club went into Administration back in April. A much mooted takeover by a consortium headed by Jim Melrose has not materialised, although a CVA was agreed in July, with debts written off at 1p in the pound. A recent announcement by the Administrator spoke of ‘around 10 enquiries from potential buyers‘ (14), but the Edgeley Park ground remains a contentious issue.
Two other clubs, who have not been in Administration, are due in court over debts shortly:
- Accrington Stanley
Deadline for clearing the debt of £308,000 owed to HMRC is next Wedenesday, 28th. October. As I write, the Save Our Stanley Fund barometer stands at a smidgeon below £120,000 (15), to which other revenues from charity matches etc. need to be added. Even if the full £308,000 is raised, there are no indications that the current Chairman, Dave O’Neill, will be able to manage a positive cashflow in the future. It is a pity for the club’s sake that he could not have come to an agreement with Ilyas Khan who had wanted to buy the club and give significant control to fans.
- Southend United
An unusual case which seems to have attracted little attention outside Southend. The club is due back in court this week over £660,000 due to HMRC; owner Ron Martin cooed to BBC Essex “There’s not a financial crisis, we are in a transitional stage moving Southend United from Roots Hall” (16), in a near-repeat performance of a confrontation with HMRC a year ago. Maybe Martin is just using HMRC as a handy overdraft facility, but the overall fortunes of the club are on a downward swing, with a move from an annual profit of £1.34m to a loss of £2.4m reported this June (17).
Martin’s use of the word ‘transitional’ with respect to the stadium move is curious. The stadium saga dates from 1998 when the current Roots Hall stadium was sold to clear debts and a rent-back agreement reached. Plans for the new Fossetts Farm stadium have grown ever more elaborate, and now include Southend’s fourth casino as well as flats, retail units and a 22,000 seater stadium (Southend’s gates are good by League One standards but this season have been averaging around 8,000).
Let me put it this way – if I were a Southend fan, I’d be beginning to wonder whether Martin’s high-risk high-return strategy wasn’t beginning to smell more of ‘risk’ than of ‘return’ (probably a bit rich, you might well counter, coming from a Pompey fan, and I’d have to concede that!)
Weymouth too will face a legal crisis point this week (see postings passim). The latest announcemnt on the club’s future, and how they will deal with Malcolm Curtis’s ultimatum that the club settle its overdraft with Barclays (18), is scheduled for Wednesday. Administration or new owners look the only likely possibilities, although they are not of course mutually exclusive, and the former followed by the latter is probably the favourite here.
And finally, Hyde United. At the beginning of October, the club managed to fight off a winding-up order brought by HMRC. The club is not yet in the clear, however, as it still has debts of £50,000 (19).
I say ‘finally’, but, with so many cases of insolvency and impending insolvency, it’s increasingly hard keeping up. If I’ve missed a club, let me know and I’ll provide what news I have. I am off to Greece on Thursday for a conference, back on Sunday, so will do my best to cover events as they unfold this week