Swindon and Salisbury lie rough forty miles apart, so it is quite possible that a Salisbury City fan may have picked up the latest copy of The Swindon Advertiser and read this intriguing report, entitled ‘Town’s CVA finally signed off‘. Quite what their reaction was I hesitate to guess. They must surely have looked to compare Swindon’s situation with that of Salisbury City (if you are unfamiliar with Salisbury’s current battle, see previous posting Appendix E: Tough Love for Salisbury City?).
It followed a rather terse posting on the Swindon club website (1) on Thursday
At the time that the Andrew Fitton led consortium acquired a controlling interest in Swindon Town Football Company Limited, it immediately met the conditions attached to the CVA (Creditor Voluntary Arrangement) that the club was in at the time.
The club is pleased to announce that after a protracted period of time, the administrator (Hacker Young) has officially confirmed that the CVA has been discharged and that the records at Companies House have now been amended accordingly.
As Chairman Andrew Fitton told the The Swindon Advertiser:
[People] probably though we were out a long time ago, but that wasn’t actually the case.
“It has taken two years and a huge amount of effort to get something to happen which was meant to happen in June 2008. But if you look at the Companies House website we are absolutely clean now.
“It was red tape and just legal issues whereby you cannot close out the CVA until everybody has cashed their cheques.
Now why might people think Swindon were out of a CVA a long time ago? Well compare that statement yesterday to this one of Andrew Fitton to The Swindon Advertiser on 31 May 2008 (2): “ …if you do a search for Swindon Town you will see we are no longer a club the subject of a CVA.” So there you are Andrew, mystery solved. Recycling at its best.
Fitton continued in yesterday’s interview:
“There was a letter dated July 2008 saying we had fulfilled all our objectives, but that still wasn’t good enough.
“And at the same time you have people who are not fit and proper going under the radar and getting into other clubs – it just doesn’t add up.”
In the wake of Town’s League One play-off final defeat to Millwall, Fitton hinted that he may have been ready to walk away from football after becoming “disillusioned” with the sport.
And he explained: “This situation is what a lot of my recent frustrations have been based on.
“We spent thousands of pounds on lawyers which has no influence on Swindon Town Football Club.
“It doesn’t help the players or help us win games. It is just crap that has to be swept up.
“Technically we could have been subjected to a transfer embargo, but thankfully the Football League were very good and decided that we had done everything we could and lifted it soon after we arrived at the club.
“I wish I could say the same about the FA though. They suspended our membership, meaning we weren’t even allowed a vote with them because they think we are a club who are financially delinquent.
“Should the FA have spent their time suspending our membership, or should they be sorting out the problems in our game?
“This is something celebrate. But you can now put into perspective my frustrations outside the game.”
Three cheers, it would seem, for the Football League, for not being too retentive in the application of its Rules and Regulations.
But surely this can’t be the same Football League that is threatening to expel Stockport County for entering a second season in Administration, not grant Grimsby Town reprieve if that should happen, and then play 2010/11 with a club short, thus depriving very club in League 2 of one week’s match day revenues? Well, yes it is – rules is rules, you see.
Given that Andrew Fitton is not an entirely reliable source of information, I’ve been trying to make sense of my Swindon Town file to see just how long the club has been suffering an insolvency event. Clearly it goes back as far as May 2008. The problems at Swindon predate Fitton, and are complex, with various attempts to bring them out of a CVA.
In January 2008, the BBC website reported that the total transfer embargo had been lifted, being replaced with a ‘flexible’ one, meaning “they can only sign and loan players with approval from the Football League” (3). The report concluded “The flexible embargo will be removed on 31 May once all agreements have been met between Fitton’s consortium and the Football League“.
Previous contenders to run the club included BEST holdings (a Portuguese consortium), the mysterious Mike Diamandis, Willie Carson and Sir Seton Wills.
In July 2007 when the final payment of the CVA was due, then Administrator Andrew Androikou proposed amending the CVA and delaying a payment of £900,000 until the end of May 2008 (4).
In March 2007 the following exchange appeared on the club’s website (5) in a Q&A session:
Q. Why have no Accounts been produced for over 3 years?
The only accounts that are overdue are those that relate to the year ended 31 May 2005. They are completed in draft and await the final audit report. Accounts for the year ended 31 May 2006 do not have to be filed until 31 March 2007.
An interesting answer to a different question.
In November 2006, a BBC report cited a Swindon Town board statement referring to “when the CVA was structured five years ago” (6).
In October 2005, the club narrowly escaped a winding-up order from HMRC, the second that year (7).
At the AGM in December 2004 as reported by the Supporters Trust (8), it was reported that:
No accounts were presented as the club is currently trading insolvently and the auditors will not sign off the accounts until an £800,000 cash injection is handed over.
2004 was characterised by continual disputes over planning permission for a new stadium that the club clearly could not afford.
The Trust’s report (9) of the club AGM in December 2003 also mentioned the problematic preparation of club accounts:
AGM brings more questions and answers for shareholders.
Swindon Town’s 2003 AGM was a largely harmonious meeting at the County Ground this morning, with both shareholders and board members keen to look to the future.
The meeting featured a number of questions from the floor regarding the three years of accounts recently delivered to shareholders, and the continued backlog of the remaining years accounts.
2002, on the other hand, was characterised by a spell in Administration, from March to August (10 and 11). Debts at the time were £1.6m, including nearly £1m to the Inland revenue (now part of HMRC).
In August 2001 the club was reported as being in breach of its CVA (now you hadn’t forgotten had you!) (12), by failing to meet the conditions that “the debt to the Inland Revenue would be settled and sufficient working capital would be channelled into the club to keep it running efficiently“.
It was in fact back in August 2000 (13) that the CVA had been agreed, following the takeover of the club by Terry Brady (14). This brought the club out of Administration which it had entered in February 2000 (15), when the club was reported as being between £2m and £3m in debt, projected to make a £1.5m trading loss this season, and needing to repay between £250,000 and £500,000 immediately. The debts include £214,000 due to the Inland Revenue.
Rather a long time for a CVA to run – almost ten years. The obvious club to be lenient with in the application of rules? Perhaps not. Stockport fans (and Grimsby fans) as well as Salisbury City fans might use a stronger term.
No doubt Andrew Fitton will speaking up at the Football League on Stockport County’s behalf.