Generic clubs in financial crisis Thread

[Deadlock]

Since 2003 HMRC are no longer a preferred creditor - they take their place alongside all the other unsecureds.

You have to wonder which oxf*rd idiot was in charge of the Treasury when that decision was made.

Oh.

[Baines]

thinking about it, presumably if Pompey were to be liquidated, then presumably they would cease to hold their players' registrations, and those players would be free agents.

I guess so as there would be no-one in existence holding onto the registrations. However, I'd be a little surprised if the whole liquidation process - debts established, assets brought in, creditors paid out and company struck off the register, before the end of the season.

[Rex]

Isn't the situation currently that the club is going to be deducted 9 points, go into administration, get relegated and deducted a further 10 points. 1 years saving grace.

The liklihood of finding the right investors before this friday are very slim.

Sadly those people who will get hit in the pocket harder than the playing staff are not that high on the priority list.

[Smoking Kills Dancing Doe]

The fact the players get paid in full, while the guy who fixed the dressing rooms getting a penny in the pound, is certainly one of the more disgusting aspects.

I've never understood administration, ever since that season Leicester got promoted. How can you just write of debts? Or am I once again missing the point completely?

Still Pompey fans deserves a club to support. I just really hope the culprits get exposed. Anyone want to take bets on any media outlets running stories about Redknapp/Storrie?

More chance of Pompey staying up.....

[Wycombe Royal]

I've never understood administration, ever since that season Leicester got promoted. How can you just write of debts? Or am I once again missing the point completely?

And it isn't just in football, private individuals can do it as well. Why do you think credit card interest rates are so high, even for those with excellent credit ratings.

[Royal Rother]

thinking about it, presumably if Pompey were to be liquidated, then presumably they would cease to hold their players' registrations, and those players would be free agents.

I guess so as there would be no-one in existence holding onto the registrations.

Hmm, interesting. The players are considered intangible assets of the company with a value based on the length of contract and signing on fee.

In normal circumstances ownership effectively passes to the liquidator, whose job it is to raise maximum revenue for the creditors through selling those assets. So I'd have thought the registration still exists, it's just that the contract is presumably nullified if payment is not being made in the terms of the contract associated with the registration.

Whatever, it would not make sense for any club to pay for a player who 1. can't play for them this season and 2. will presumably be available for nothing in a few weeks / months time. Neither would it make much sense for a player to agree to move clubs now, for a fee, when presumably he can negotiate a joining fee when he becomes a free agent.

Either way, Pompey appear even more fcuked.

[Mr Angry]

I understand from media reports that the costs of administration (£3M) have had to be guaranteed by the current owner (Chainman whatisface); presumably that will go onto his $17M of existing debt.

Incidentally, the Tax and PAYE that Pompey owe HMRC isn't £7M or even £11.4M - its actually £18M!!!!!!!!

One other point; the NZ consortium who were supposedly interested in buying Pompey had been investigated for financial irregularities by the NZ authorities a while ago.....

Frankly I agree with those who are saying that administration is an easy cop out for clubs in difficulties after mis-manmagement; the sanctions that would be imposed on a club have to be strengthened as a result of this hugely embarassing debacle. I go back to the idea that Directors associated should not be allowed near a football clubs boardroom ever again.

Furthermore, points deductions should start earlier; ie: when salaries don't get paid (isn't that a clear sign of financial mismangement??) 1st time there is a delay - formal warning; 2nd time - 3 points deducted 3rd time - 9 points deducted - 4th time - relegated 1 division. The propsed sanctions would concentrate minds wonderfully.

[Baines]

thinking about it, presumably if Pompey were to be liquidated, then presumably they would cease to hold their players' registrations, and those players would be free agents.

I guess so as there would be no-one in existence holding onto the registrations.

Hmm, interesting. The players are considered intangible assets of the company with a value based on the length of contract and signing on fee.

In normal circumstances ownership effectively passes to the liquidator, whose job it is to raise maximum revenue for the creditors through selling those assets. So I'd have thought the registration still exists, it's just that the contract is presumably nullified if payment is not being made in the terms of the contract associated with the registration.

I'm not sure that's quite correct. It's not my field of expertise so maybe things have changed, but my recollection was that whilst the property of a bankrupt individual vests in the trustee in bankruptcy, the property of a company being liquidated never vests in the liquidator. The liquidator has possession of the company's assets (or rather has the power to bring all such assets into his possession), but that possession does not amount to ownership - it merely entitles him to deal with the assets. So, until the time the company is wound up any playing contracts remaining in existence will continue to be between the company and the player, and any registrations held pursuant to those contracts would remain property of the company.

Of course, as you say, it may be that non-payment of wages will bring the contracts to an end and that may result in the company losing the registration.

[exileinleeds]

The latest news on Sky says the PL "will do everything they can" to help Pompey through administration.

http://news.sky.com/skynews/Home/UK-New ... nistration

I had to smile at the last paragraph....

Administration and the nine point deduction that goes with it would make Pompey's relegation to the Champions League inevitable

[Royal Rother]

Hmm, interesting. The players are considered intangible assets of the company with a value based on the length of contract and signing on fee.

In normal circumstances ownership effectively passes to the liquidator, whose job it is to raise maximum revenue for the creditors through selling those assets. So I'd have thought the registration still exists, it's just that the contract is presumably nullified if payment is not being made in the terms of the contract associated with the registration.

I'm not sure that's quite correct. It's not my field of expertise so maybe things have changed, but my recollection was that whilst the property of a bankrupt individual vests in the trustee in bankruptcy, the property of a company being liquidated never vests in the liquidator. The liquidator has possession of the company's assets (or rather has the power to bring all such assets into his possession), but that possession does not amount to ownership - it merely entitles him to deal with the assets. So, until the time the company is wound up any playing contracts remaining in existence will continue to be between the company and the player, and any registrations held pursuant to those contracts would remain property of the company.

Of course, as you say, it may be that non-payment of wages will bring the contracts to an end and that may result in the company losing the registration.

I'm sure you're probably right - my use of the word "effectively" was supposed to add a shade of grey to my statement.

Actually, thinking about it, when goods are purchased out of a liquidation a duly appointed agent issues the Sales Invoice, not the Liq - how the goods pass into his hands and whether it is actually his reponsibility to get best price rather than the liquidator's I don't know, I've gone all vague.

Oh well, who cares about the technical shit, as long as Pompey get buried. It's for the good of the game.

[Mr Optimist]

I was working late last night and had Talk Spurt on, and unless i am hearing things I am sure the Pompey spokesman they were talking to was called Phil Hole.

yeah...good luck with that mate!

Thanks for the comments re Pompey's non-academy .......evil smile passes over my face.............!

[TFF]

Isn't the situation currently that the club is going to be deducted 9 points, go into administration, get relegated and deducted a further 10 points. 1 years saving grace.

The liklihood of finding the right investors before this friday are very slim.

Sadly those people who will get hit in the pocket harder than the playing staff are not that high on the priority list.

The Guardian http://www.guardian.co.uk/football/2010 ... -deduction suggests they could face a 20-point deduction, like Luton did, should they fail to agree a CVA.

I can't remember why Luton got such a stiff penalty, but 10 looks like a minimum tbh.

[SpaceCruiser]

I can't remember why Luton got such a stiff penalty, but 10 looks like a minimum tbh.

Wasn't it actually two infringements (one of them being the administration and the other I can't remember), both costing them 10 points which totalled 20 points?

[Mr Angry]

This is probably the most easily digestible and succinct breakdown of the Pompey situation;

http://www.bbc.co.uk/blogs/mattslater/2010/02/portsmouth_fc_in_crisis_qa.html

[Silver Fox]

Good link, I particularly enjoyed the part where it says Pompey's wage bill includes tax, which they'll have to start paying now

I still can't see how they can be in any way viable but as many have already said, the PL only care up until July 1st (or is it June 1st?) and then it's not their problem

[Deadlock]

One thing in the blog - it says the club have to ask the high court to be placed in administration. Does the court have to agree to this?

[Jimmy the Tree]

I can't remember why Luton got such a stiff penalty, but 10 looks like a minimum tbh.

Wasn't it actually two infringements (one of them being the administration and the other I can't remember), both costing them 10 points which totalled 20 points?

I think the second 10 point deduction was for not having the CVA in place for the start of the next season. Didn't they get another 10 point deduction for some dodgy agent payments, making 30 points? Or did that get reduced under appeal?

[Platypuss]

This is probably the most easily digestible and succinct breakdown of the Pompey situation;

http://www.bbc.co.uk/blogs/mattslater/2010/02/portsmouth_fc_in_crisis_qa.html

This bollox again:

"in this case [liquidation] would mean the end of Portsmouth FC as we know it: a fate not witnessed in professional football since Aldershot went to the wall in 1992."

In the google era is it really too hard to get these basic facts right?

[Barry the bird boggler]

One thing in the blog - it says the club have to ask the high court to be placed in administration. Does the court have to agree to this?

No I don't believe so, I think the court has to see some benefit or light at the end of the tunnel to make the effort worthwhile, not necessarily sure whether that is the case with Pompey but then if they can point to a buyer being out there who just needs time to look at all the pieces and put an offer together I guess it should be granted

[Arch]

"we should also remember our own guilt as co-conspirators: we have all demanded more "ambition" from our clubs but have rarely cared about the cost."