Football Management

Commentary on the management of over 160 English football clubs by Dr John Beech, winner of the FSF Writer of the Year Award 2009/10 Twitter: @JohnBeech Curator of! Football Finance

Insolvency overview

Posted by John Beech on November 15, 2009

Three weeks is a long time in football management – it was only on 25 October that I posted my last overview.  Previous ‘overviews’ can be accessed by clicking on the ‘Overviews’ tag at the top of the page.

With a number of clubs things have become clearer, but for many the confusion has just changed to a new confusion.

  • Accrington Stanley
    The absurd brinkmanship that saw the club rescued on the footsteps of a court has seen Ilyas Khan come in as non-executive Chairman, but with ex-Chairman Dave O’Neill effectively in day-to-day control as Managing Director and Head of Operations.  Khan is now talking of the Championship in three to five years (1), not suggesting a great degree of realism, and seems to have forgotten all the talk of being pro-fan – certainly no indications of any fan directorships.  The current crisis is over, but I’m not encouraged at the prospects for the longer term.
  • Bournemouth
    Bournemouth won my Soap Star of the Year Award last season and obviously are reluctant to give up the title.  Eddie Mitchell announced last Monday that £80,000 had been paid to HMRC (2) and the remaining £70,000 would be paid by today (although, as I write, that second payment had not been confirmed).  Where this money has suddenly materialised from is not being revealed, although Mitchell says it is being “paid through hard work – not through loans or anything else. It is hard work which usually does it”, whatever that means.
    A case brought by Jon Piper against Vice Chairman Jeff Mostyn personally over a loan of £30,000 has been dismissed, but he is taking action against the club over a different loan.
    Meanwhile manager Eddie Howe is making himself more and more attractive to other clubs by sustaining moss impressive performances on the pitch.
    Definitely one with legs.
  • Bromsgrove Rovers
    The club has been bought from the Administrator by Mike Ward (3), together with as yet unnamed partners, but these do not include Tom Herbert, former Chairman.  The purchase has yet to be approved by the FA, and Ward is not make any announcements at this stage on his strategy.
  • Chester City
    See postings passim.  The club, or rather the company, its owner and the board, continue to make a mockery of football governance.   Owner Steven Vaughan is, it would appear  no longer a ‘fit and proper person’ following being banned from acting as a company director, or in any way controlling a company as a result of his involvement in a VAT scam while a director of Widnes.
    Vaughan however “indicated to The [Chester] Chronicle that his disqualification will not effect the club as he has no part in running it” (4).  As if!  An FA spokesperson said to the Chronicle: “All I can say at this stage is that we are aware of the decision and that we will be considering it in line with the requirements of our Fit and Proper Person Test”.
    Meanwhile the Conference have given Vaughan Chester another extension to paying their football creditors! (5)
    The club website is its usual informative self – the most recent news item is ‘Youth team coach required’, posted as recently as 6 October.
    Quite why the FA and the Conference both continue to pussy-foot around is far from clear.  Their lack of action is setting very dangerous precedents.  Frankly, phoenixing as AFC Chester is becoming the only viable way forward.
  • Darlington
    No developments of significance, but new owner Raj Singh is busy trying to get sponsorship from local businesses (6).
  • Halesowen Town
    See postings passim. The day of decision by the creditors on who of two rival bids has come and passed, with the meeting postponed.
    So, an unusually quiet period of activity for the club by recent standards, but Yeltz fans must just be wishing that the whole sorry episode comes to a definitive conclusion.
  • Hyde United
    The club has survived its immediate demise, but a debt of £50,000 to HMRC remains (7).  In what way the board is going to change its business model in order to meet this remaining debt has not been announced, but apparently it allows new signings (8).
  • Ilkeston Town
    Back in July, the club faced a potentially serious problem with the personal bankruptcy of benefactor Chet Whyte (9).  Latest news is that a deal for the Whyte family to sell the club to a group of Nottingham businessmen has collapsed (10).
  • King’s Lynn
    Not much to report here other than new signings (11). The deadline to pay HMRC £65,000 remains 25 November.
  • Lewes
    The club was given a three-month adjournment on 3 September  of an HMRC winding-up order, and have to pay off the outstanding debt at £10,000 a month.
  • Margate
    By way of a change from developments, or lack of them, at other clubs, some unmitigated good news – the club has cleared its debt to HMRC in full, having raised money through a successful shares issue (12).  Excellent news!
  • Merthyr Tydfil
    The Supporters Trust, now running the club, have had to make some tough decisions.  Wages have been cut by 50% (13) in the light of unexpected debts of £40,000 to the FA, Merthyr Tydfil Borough Council and the Administrator, and disappointing revenues.
  • Northwich Victoria
    Still no CVA agreed.  As a result, the club cannot yet receive the financial benefits of their successful cup run, thought to be £43,000 so far (14), with an FA Cup Second Round tie at home against Lincoln to come.
  • Ringmer
    Still a news blind spot, I’m afraid. Unless, of course, you know better – any information would be gratefully received.
  • Salisbury
    Discussions between the would-be consortium (15), the Administrators, the Conference and HMRC are ongoing, with the Administrators “still confident that agreement can be reached” (16).
  • Southend United
    See postings passim, and The continuing Southend saga in particular.
    The matter remains closed apparently, at least to Chairman Ron Martin, even if the mystery of where the money came from remains unresolved, and there is no indication of how a repeat of the recent fiasco will be avoided.
    Presumably the move from Roots Hall remains ‘transitional’ and, at least to Chairman Ron Martin, there was ‘no financial crisis’ (17).
  • Stockport County
    The Administrators remain confident that ongoing discussions will lead to an exit from Administration (18).  We shall see.
  • Weymouth
    See postings passim.
    Ian King recently described the club as “one of the ongoing financial basket-cases of the last three years in non-league football” (19), and with good reason.  I see them as a seemingly never-ending Western, with an ever-changing cast of ‘good guys’ and ‘baddies’.  The end may yet be nigh however.
    To cut a complicated and ongoing story short, here are the most salient points.
    On 28 October, the club announced their intention of appointing Administrators ( a pre-Administration legal move) (20).  This prompted two expressions of interest in buying the club.  One was led by Chris Bryan, local businessman, and involves one Steve Beasant, the other being led by ex-Cambridge United chairman George Rolls.  However the deadline was passed without either group formalising a deal.
    Director Paul Cocks then announced that the club was “under an obligation to take formal insolvency proceedings” (21).
    The Ryan offer had been one of £2 (sic), but has subsequently been revised upwards.  Beasant cannot be one of the directors as he is a property developer (no, that’s not yet a reason for failing the Fit and Proper Person test, although it probably should be, but bear with me) who was declared bankrupt at the end of last year (22).  This hardly augurs well.  Ryan has been putting the case for his bid on the Weymouth Independent Fans Forum on the thread OUR OFFER under the particularly irritating pseudonym of ‘True Facts’ – a tautology since there cannot be a fact that is not true. Cocks has also been posting on the forum (23), and on the club website (24).  He resigned as a director on Friday night, although his resignation has yet to be accepted. News on the club website may dry up if his resignation is accepted.
    All of which leaves the club in an unholy mess.

Other clubs on my radar screen are the Premier League trio Hull, Portsmouth and West Ham, for well publicised reasons, together with a number of Football League clubs who I have mentioned in previous postings, now plus Watford (25).


23 Responses to “Insolvency overview”

  1. simoncope said

    Any news on the situation at Farsley Celtic John?

    • John Beech said

      Latest (!) I have is from 15 October – HMRC, the largest creditor, objected to the proposed CVA (1). The Administrator was reported as due to discuss the situation with Conference, but I can find no report of that meeting having taken place.

  2. John Beech said


    The Conference have issued a statement this morning (1) confirming that Chester’s deadline has been extended until 30 November. The subtext is that Chester is trying to get the money they are ‘owed’ from the Football League.

    Even if Chester get the money, if they then use it to pay off last season’s debts, they are simply creating a new problem for themselves this season.

  3. John Beech said


    The board has accepted the Ryan/Beasant bid “subject to certain conditions being met in order to safeguard the club’s future” (1).

    The club, and the saga, continue.

  4. John Beech said


    The club’s HMRC debt has been paid, and the winding-up petition has been officially dismissed (1)

    • John Beech said


      The club has ‘agreed terms’ with John Piper over the £30,000 loan Piper was seeking to be settled (1). There are still some deferred rent payments to the club’s landord which remain.

  5. John Beech said


    By an overwhelming majority, the club’s creditors, who ironically included Morell Maison, voted to accept the offer from the Ingrams brothers (1).

    • John Beech said


      First indications of the plans by the Ingrams have been announced, with the return of a familiar face (1).

    • John Beech said


      Just when things seem to be sorted for much abused Yeltz, it has emerged that the takeover by the Ingram brothers has not actually been finalised (1), and the club remains banned from the potentially lucrative FA Cup.

    • John Beech said


      Although agreement has been reached for the Ingram brothers to buy the club, it still remains in Administration. To add to the uncertainty surrounding the Yeltz, Chief Executive and acting Commercial Director Brendan Phillips, who only returned to the club in October, has resigned (1). He has cited differences with Graham Ingram over the future direction of the club. Not good news.

      • John Beech said


        There was confirmation yesterday (1) that the documents to bring the club out of Administration were lodged at Companies House on May 25th. All that now remains is for the FA to ratify the transfer of membership.

  6. John Beech said


    Two new reports have appeared on Lewes, in the Brighton Argus (1) and the club’s website (2)

    The club faces another HMRC winding-up order following its failure to keep to a repayment schedule, although the club has a different interpretation of that schedule. The sum currently in dispute is £20k, which should be seen in the light of a) the £20k the club has repaid since September and a further £10k ‘in place’ for this month’s payment, b) a total outstanding to HMRC of £47k, c) the fact that some of the payment so far has only been possible by taking out loans, and d) a much high level of ‘soft debt’ hanging over the club.

    • John Beech said


      The club have failed to pay the installment due to HMRC in December and face the possibility of being wound up when they return to the High Court on Wednesday (1). See also a statement from the club (2).

      • John Beech said


        It looks like the immediate danger is over – the HMRC bill has been paid (1), with the money being raised by donations and interest-free loans. There is still the problem of £40,000 of other debts to be faced, and donations and interest-free loans do not make their business model sustainable.

  7. John Beech said


    The Vics have had their transfer embargo by the Conference lifted in spite of still being in Administration (1).

    • John Beech said


      The lifting of the transfer embargo has proved academic – the club has transfer listed its entire first team (1). Poor gates are proving to be an underlying problem.

    • John Beech said


      Entering a CVA and a takeover are tantalisingly close (1) but currently frustrated by bureaucratic problems caused by the change in Administrator.

    • John Beech said


      An improved offer has been accepted by HMRC and the club can now enter a CVA (1).

  8. John Beech said


    A meeting of creditors has rejected an offer of 5p in the pound from prospective purchaser Mike Ward (1). This may prove the last straw for the club.

  9. John Beech said


    The Football League is currently refusing to transfer the club’s Football League share to the Melrose consortium (1) and the Administrators are seeking clarification on the unresolved issues.

  10. John Beech said


    A CVA has been agreed and the club should shortly come out of Administration and officially into the hands of the Harrison-Allan consortium (1).

  11. John Beech said


    Good news (courtesy of Anthony Mouzer)- the club has agreed a CVA (1), and the stabilisation of matters off the pitch can begin. Good to see fan involvement.

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