Argyle directors finally admit defeat
Posted by John Beech on March 4, 2011
The desperate rearguard fight by the Plymouth Argyle board to keep their control on trading has finally ended with the club going into Administration (1) and (2). They had already declared their ‘Intention to enter Administration’ (3), which attracted a 10 points deduction this season and the virtual certainty of relegation.
The reason they gave for ‘buying time’ was to see if they could find a buyer, a possibility that never seemed likely to this observer. As the period in which they could remain is ‘intending to enter Administration’ drew to a close, they were faced with a choice – enter Administration voluntarily, where they would have some say in who was appointed as Administrator, or wait for HMRC to press for a winding-up petition, which would have led to a less friendly, more creditor-oriented, Administrator. With HMRC pressing for a winding-up petition, not surprisingly they chose the former course.
This prolonging of the fans’ agony, by building up hope that a knight in shining amour was just waiting to be teased out of hiding by Peter Ridsdale, suggests to me that they had rather taken their eye of the ball , started to focus on red herrings, and altogether lost the plot (apologies for that horrendous mixing of metaphors). Questions will surely be asked as to why they had not sought court protection earlier. If pushed, they may even have to defend a charge of trading insolvently. This might be difficult to answer given that Argyle’s staff have not been paid for six weeks, and the club’s bank account had been frozen a week ago, this not being the first occasion that had happened of late (4).
Perhaps the oddest dimension of this tale of a last-minute fight against the odds is that three of the directors are accountants, a profession normally known for prudence rather than a lack of realism. They at least will be relieved that they had sold some of their shares to Japanese investors, so won’t have had all their personal funds at risk. The extent to which the Japanese have participated in this week’s decision-making remains unclear, as is their reaction to the news that the money they finally sent proved to be too little money too late (5).
As if things weren’t litigious enough, it was announced yesterday that the Charities Commission is to investigate a loan made to the club by The Plymouth Argyle Supporters Training and Development Trust, a body which exists to promote the training and education of young footballers (6).
What Brendan Guilfoyle, who has previously been the Administrator at Luton Town and Crystal Palace, finds as he goes through the Argyle books remains to be seen. The debt level, by received wisdom is some £3m, and possibly an injection of up to £10m is needed to restore the club to being a going business. At this stage Liquidation cannot be ruled out as a possibility.
While Guilfoyle may well see the selling of the club as a distinct challenge, he does have one intangible he can promote – the geographical location of the club and the potential to regrow the fanbase. He is also at least no longer encumbered with unrealistic plans for an enormous stadium (see postings passim).