Generic clubs in financial crisis Thread

[rhroyal]

Anybody else desperately want to see the next English club living beyond their means going the same way as Rangers?

[Who Moved The Goalposts?]

Anybody else desperately want to see the next English club living beyond their means going the same way as Rangers?

Yes, but when a club like Pompey can emerge from years of shady financial doping and mismanagement with the "punishment" of having all bar 2% of their debts wiped out, it's going to have to be something pretty spectacular.

[superreadingfan]

why didn't rangers just do what pompey did?

[Royal Monk]

But its not really 2% is it ...

The last cva agreed was 20% , so its 2% of the 20%

So basically they have turned roughly £130M ( original debt turned into cva1) + £60M ( debt built up after cva 1) into £500,000 less expenses

Its a disgrace if the football league let them get away with this

[Mr Angry]

St Johnston have just announced that they are voting against Newco Rangers being admitted into the SPL.

Thats 6 votes against - so far - so Newco Rangers WON'T be playing in the SPL next season.

St Johnston
Hearts
Hibs
Dundee Utd
Aberdeen
Inverness

[superreadingfan]

Well Fox Soccer Channel will be happy they just picked up the SPL lol

[weybridgewanderer]

why didn't rangers just do what pompey did?

They tried to but their creditors voted against the cva.

Maybe green should just have said he would pay them loads more and then just not pay it

[Ian Royal]

why didn't rangers just do what pompey did?

They tried to but their creditors voted against the cva.

Maybe green should just have said he would pay them loads more and then just not pay it

This is what happens when you don't run up extremely large spurious debts outside of what you owe to HRMC. They have a big enough share of the debt to block a CVA.

[ZacNaloen]

So the secret to running a football club is to make sure that whoever you owe money to make sure HMRC aren't the biggest creditor.

[Ian Royal]

So the secret to running a football club is to make sure that whoever you owe money to make sure HMRC aren't the biggest creditor.

Remember when that mysterious debt owed to Bates suddenly materialised about a week before the Leeds CVA was to be voted on and suddenly left HMRC on about 1% of the debt less than they needed to block his deal?

And mysterious isn't it, how Pompey's debt this time around seemed almost exclusively to HMRC originally, and yet it suddenly spirals and they still can't block the CVA second time around.

Basically, Rangers were just incompetant compared to an English club.

[Royal Monk]

HMRC' s original debt was reduced to 20% by the first cva (as unsecured creditors) where Chainari (or whatever his name is) as a secured creditor kept his debt at the original level.
This is why the HMRC went to court to try and get the football creditors rule overturned (they lost but are appealing the decision)

[Flyingkiwi]

From today's Guardian.

Police investigate Rangers takeover

The Crown Office said prosecutors instructed Strathclyde Police to investigate alleged criminality following a preliminary police examination of information passed to it in February this year by the club's administrators.

Mr Whyte bought an 85% shareholding in Rangers for £1 from the Murray Group last May and made several pledges of investment and paying off the club's bank debt.

Rangers went into administration on February 14 and was consigned to liquidation earlier this month.

The Crown Office said: "The Crown Office has today instructed Strathclyde Police to conduct a criminal investigation into the acquisition of Rangers Football Club in May 2011 and the subsequent financial management of the club. The investigation into alleged criminality follows a preliminary police examination of information passed to them in February this year by the club administrators.

"The procurator fiscal for the west of Scotland will now work with Strathclyde Police to fully investigate the acquisition and financial management of Rangers Football Club and any related reports of alleged criminality during that process."

Rangers FC was forced into administration through court action from HM Revenue and Customs. The debt to HMRC was recently listed at around £21 million in the failed company voluntary arrangement proposal to creditors.

Immediately after being appointed, administrators Duff and Phelps announced that the club failed to pay about £9 million in PAYE and VAT since Mr Whyte took over.

They also revealed that Rangers paid off Lloyds Banking Group using £24.4 million from investment firm Ticketus, on the back of future season ticket sales.

Businessman Charles Green's consortium bought the club's assets for £5.5 million earlier this month.

http://www.guardian.co.uk/uk/feedarticle/10306499

Also, a bit of a coincidence that the last 2 owners have been named Green and Whyte. Bit of a Celtic set-up, maybe?

[Alexander Litvinenko]

So the secret to running a football club is to make sure that whoever you owe money to make sure HMRC aren't the biggest creditor.

Remember when that mysterious debt owed to Bates suddenly materialised about a week before the Leeds CVA was to be voted on and suddenly left HMRC on about 1% of the debt less than they needed to block his deal?

Debt that was owed to an internet-only radio company with limited reach which was suddenly discovered to be owed hundreds of thousands of pounds for advertising they'd done for LUFC?

I'm trying to remember who owned that internet-only radio company with limited reach ... I think his initials were K and B.

[cmonurz]

Read that Rangers might start next season in Scottish FL Division One – do they FL clubs now have a similar vote as to where Rangers go?

[cmonurz]

And can someone explain how the calculation above works, in practice.

Original debt was millions, now it is only a few hundred thousand. What does that mean? Who agrees on creditors’ behalf to accept such measly sums for the debt? Is the problem not the FL which is, after all, protecting the club and fans, but the likes of HMRC and other creditors who simply don’t act strongly enough in demanding full repayment of their debt?

[Barry the bird boggler]

So when are the government going to introduce new legislation to change this like they promised?

[Wimb]

And can someone explain how the calculation above works, in practice.

Original debt was millions, now it is only a few hundred thousand. What does that mean? Who agrees on creditors’ behalf to accept such measly sums for the debt? Is the problem not the FL which is, after all, protecting the club and fans, but the likes of HMRC and other creditors who simply don’t act strongly enough in demanding full repayment of their debt?

As far as I'm aware it's to do with whether the creditors think they'll get more from the liquidation process or by accepting a CVA. They can demand they get paid back in full but the club can turn around and do as Rangers have done and declare themselves bankrupt and just fold.

HMRC usually accept the CVA as it's better than nothing but they've got pissed off in recent years due to clubs seemingly using administration/CVAs as a way to wrack up big tax debts.

[cmonurz]

Ta. I guess what I’m asking is if HMRC said, ‘ummm, no, we want all or most of the money you owe us’, would Pompey be fcuked?

[TFF]

Ta. I guess what I’m asking is if HMRC said, ‘ummm, no, we want all or most of the money you owe us’, would Pompey be fcuked?

HMRC wanted to oppose the CVA @ Pompey because they wanted "all or most of the money" owed. The original CVA limited that (as a non-footballing debt) to 20%.

To start with everyone thought that HMRC had a big enough slice of the total debt to carry the vote against a CVA but Andronikou found enough debt elsewhere - mostly Gaydamak and Chanrai iirc - to make HMRC a minority stakeholder.

[cmonurz]

Bradford Bulls into administration, and say they face liquidation in 10 days.