Pompey are apparently 48 hours from liquidation

You forgot "the man who doesn't exist" and the man who the FSA refused to allow to open a branch of his bank in England.

 

you really have been unlucky with owners.

 

We were unlucky with owners as well, we lost the best one in the world.

 

But his legacy lives on and our amazing progress is a testament to the great man.

 

For my sins, Insolvency is my line of work. Lots of points have been raised on here which, when looked at logically would seem to hold water but are in fact incorrect.

When an entity enters into a formal arrangement, in this case a CVA, the purpose is to deliver a clean slate. This is delivered by structuring an agreed schedule of repayments for the benefit of all creditors. In any business other than football, the principle of Pari Passu is used meaning that each creditor gets paid precisely the same percentage of what they are owed. Of course in football, all football related debts are satisfied in full first (wrong but irrelevant here). So, the debts that the CVA cover effectively disappear. This means that PFC had no debts whatsoever as soon as the CVA was agreed. However, they also had no assets either as these would all have formed a part of the CVA as security against it failing so those who have said that assets would be sold prior to liquidation are in theory correct - the trouble is, there are none any more as they are already "owned" by existing creditors.

As the club started with a clean slate but no assets and very little working capital, it was clearly living hand to mouth; in much the same way as most households live from pay-day to pay-day. So, now that NICS have gone down the pan, there simply isn't another pay-day on the horizon. If you consider that higher rate income tax runs at 50%, then an unpaid tax bill of £800k relates to a wage bill of only £1.6m. That really isn't an excessive salary bill for a Championship team - until you run out of cash of course!

So, yes the FL has a huge amount to answer for in allowing a string of unsavouries to get their mits on something that represents so much more than a mere business to so many, and yes, the fact that football creditors get paid to the detriment of small businesses and charities sucks. However, this new situation has nothing to do with a continuation of poor practise.

That said, the situation is tremendously serious for two reasons. The first is that the CVA will have to be paid monthly. If there isn't enough cash to pay the £800k tax, there's no way there will be enough to pay an extra £1.2m for that unless someone with heavyweight cash gets involved. If the CVA fails, a term of it will be the winding up of the business. The second is that there is an extremely aggressive creditor involved in the form of HMRC. In my entire career, they are still the only creditor that I have seen take action on principle. In other words, deliberately take steps to close a firm even if it means they lose out on cash. They already have the bit between their teeth, hate the football rules and are looking to set an example.

Crikey, don't I waffle!

 

Thanks for that info.

 

AA is 'not fazed' by the winding up petition..

Why doesn't he just give up now, then again meh is getting laid shed loads which should r going to HMRC

 

.

 

A building firm belonging to a friend went into administration in a previous recession and he was horrified by the costs of the administrator (not saying they are not highly trained or experienced). He reckoned that everyone would have got more if he had sold everything himself and shared it between his creditors. I realise that not everyone is honourable and the administrator acts for everyone, but their charges are massive.

Pleased to see in an article on another thread that Markus paid all our debts off.

 

CBK said that Andronikou would end up owning the club. Might not be a million miles from the truth.....

 

Am I mistaken in that the first group of creditors have to be paid first before a second group of creditors. I E as HRMC were part of the first group along with many others, wouldn't they have to be paid from any money available for pay out? In other words if they start to sell assets of any kind is it not right the proceeds go to paying 1st batch of creditors. I am sure I saw that from my days as a company director. It very nearly was a stumbling block when we were taking over another company. I can't remember the whole details though..........

 

The assets are protected from sale unless the CVA is completed or fails. If it fails, then HMRC get their share from the sale for the first round of debts but the club would be wound up.

 

HotBovril,
Being as you have a good grasp on how it works, what do you think is likely to happen next, say if a new owner cannot be found? Will it all come down to Chanrai putting his hand in his pocket or pulling the plug?

 

This isn't even funny anymore really, hope you lot can pull through. Although do agree with some others when they say you should just start again 'AFC Pompey'. Would take a few years but think would be worth it and it wouldn't take you that long to get back to the FL, as you do have the fan base.

 

TBF, he did sound rather imparcial, just telling us what happens when A meets B & so-forth.

 

If there is a buyer in the background, AA may be hoping Chanrai will pay to stave off HMRC temporarily to protect himself from further losses. If there is no buyer, Chanrai may want to cut his losses.

 

Ahhhh. Face palm for me then. d'oh

 

Yes, he needs to beef it up a bit. Shame Oxo has left.