Jas Boyd · @Jas72Boyd
9th Jun 2018 from TwitLonger
"A club cannae come out of liquidation when its incorporated"
I know you are all thinking why i bother, but i secretly i enjoy it.
This is the most popular one thrown at me by the "new clubbers" including various generic documents which give a flavour of how some sports clubs work but dont go into specifics and certainly dont look at the bigger corporate world of football where some FA's have rules that ignore Tax Authorities in favour of football debts despite government papers on incorporated football clubs.
The SFA, SPL and SFL released a statement confirming we were the same club. The ECA released a separate statement confirming it. 3 different law lords described how they viewed it, though they were not asked for a direct legal opinion on it. HMRC told our oldco shareholders that the club would be sold the same way in liquidation as it would through CVA, only without extra baggage. Thats HMRC. Talking to shareholders in a large UK company 2 days prior to a vote. Opening themselves to all sorts of legal bother if their statement was false. Then we have UEFA who confused the matter for a while by stating new club/company,(look up why you use a / in a sentence) in a letter before giving us their true view by awarding us 10 year ranking points and a bonus point for winning the European Cup Winners Cup in 1972. These points determine the prize money each year so have to be correct and official.
All of the above doesnt settle our enemies from across the city though because the above are all a big masonic conspiracy by all the parties who all have funny handshakes.
So i wanted to get some real life examples of "incorporated football club/companies" who have faced the same issues we experienced and I have set it out below for all to share.
Rotherham United founded 1925
https://www.themillers.co.uk/club/club-history/
Oldco 2008 - https://beta.companieshouse.gov.uk/company/05764000
Administrators statement 15th October 2008 -
https://www.scribd.com/document/381373701/Rotherham
Note:
2.1 The Adminstrator identified that the major value in the Club derived from its ability to compete in the Football League and various knockout competitions. To do so, the Club must hold a share in each of the Football League and the Football Association.
2.3 The sale process, as outlined in full in the Administrator’s proposals resulted in Rotherham Untited (RUFC) Limited “newco” making an offer of £200,000 for the Club together with funding the Administration until completion and the transfer of the Shares referred to above
4.1 Although the CVA was rejected by the creditors, under the agreement with the Football League to transfer the share, a further sum of £75,000 is to be paid by the newco
This is the Newco 2008 - https://beta.companieshouse.gov.uk/company/06550400
Liquidation commences 7th February 2009 of Oldco –
https://www.scribd.com/document/381379795/Rotherham-Liquidation
The FA handed out a 17 point deduction for failing to exit administration and Rotherham continued playing in the Football League. Full story here:
https://www.yorkshirepost.co.uk/sport/rotherham-united-hit-by-17-point-penalty-1-2511185
So to recap on the above:
Oldco went into administration.
CVA was rejected and liquidation process began
Administrators sold club to Newco
Newco took over the club
Club deducted 17 points and continued
Oldco went into liquidation
Still the same club.
Luton Town founded 1885 –
https://www.lutontown.co.uk/club/club-history/
Oldco 2006 - https://beta.companieshouse.gov.uk/company/04977080
Administrators statement 17th June 2008 -
https://www.scribd.com/document/381373659/Luton-Town
Note:
3.2.1 As previously explained the joint administrators identified that the major value in the Club derived from its ability to compete in the Football League and various knockout competitions. To do so, the Club must hold a share in each of the Football League and the Football Association.
4.1.3 The administrators accepted a conditional offer on 20 February 2008 from LTFC 2020 in the sum of £1,625,000 (together with a write off of the £520,000 loan in any event) for the business and assets of the company, conditional upon the successful transfer of the Football League share.
5.6 HMRC voted for the rejection of the Administrators proposals for a CVA therefore the the proposed CVA was rejected.
This is the Newco 2008 - https://beta.companieshouse.gov.uk/company/06133975
Liquidation commences 17th November 2008 of Oldco –
https://www.scribd.com/document/381380838/Luton-Town-Liquidation
The football league handed them a 30 point penalty and stated:
https://www.independent.co.uk/sport/football/football-league/luton-town-hit-with-points-penalty-864607.html
"A Football League statement today read: "Luton Town were unable to agree a CVA with their creditors and as a consequence are unable to satisfy the normal conditions of the League's insolvency policy for exiting administration.
"The board decided, however, that they were prepared to exercise their absolute discretion under their 'exceptional circumstances' provisions in order to accommodate the new entity.
"In accordance with recent precedent, the board decided to include the following principle conditions of entry as a pre-requisite to the exercise of that discretion.
"1) The new company (Luton Town 2020) should pay the unsecured creditors the amount offered at the time of the CVA hearing (16 pence in the pound).
"2) A 20-point deduction should apply in the 2008-09 season, which also takes into account the fact that this is the club's third insolvency event in the last 10 years."
------------
The above is a clear and unreserved acknowledgement of the continuation despite no CVA and a subsequent liquidation of the oldco
So to recap on the above:
Oldco went into administration.
CVA was rejected and liquidation process began
Administrators sold club to Newco
Newco took over the club
Club deducted 20 points and continued
Oldco went into liquidation
Still the same club.
Leeds United founded 1919 –
https://www.leedsunited.com/club/leeds-united-history
Oldco 2008 - https://beta.companieshouse.gov.uk/company/00170600
Administrators statement on the rejection of the CVA - 9th August 2007
https://www.scribd.com/document/381381212/LeedsCVA
Note:
2.2 Her Majesty’s Revenue and Customs (‘HMRC’) lodged a challenge to the CVA, pursuant to Section 6 Insolvency Act 1986 (”the Act”) and Rule 1 17A, in the High Court of Justice, Leeds District Registry (“the Court”) on Tuesday, 3 July 2007. The basis of the challenge included, inter alia, that HMRC had been prejudiced due to football creditors receiving a higher dividend than other unsecured creditors, the basis on which three named creditors had been admitted to vote, that a potential breach of Section 216 of the Act – Restriction on re-use of Company Names had not been disclosed and that other inaccurate statements may have been made in the CVA proposal
2.3 A directions hearing took place in the Court on Friday, 6 July 2007 to set a date for the full hearing of HMRC’s challenge. Due to the complexity of the matters being considered, the judge listed the matter for a five day trial commencing on 3 September 2007, being the earliest available date
2.4 The full hearing date was three weeks after the 2007/08 football season commences and the supervisors expectation was that the judgement might not be handed down until late September/early October 2007, and could be subject to appeal.
2.5 The challenge by HMRC meant the Company could NOT complete the current CVA due to constraints of time and funding. In essence the administrators were not confident that sufficient funding could be generated from the sale of players to trade the Company through the conclusion of the Court process in respect of HMRC’s challenge
2.8 Under these circumstances, the supervisors concluded that there was no reasonable likelihood of the CVA being implemented. Accordingly on 16 July 2007 and Abort Certificate was issued pursuant to paragraph 15 1 1 of the CVA proposal.
This is the Newco 2007 - https://beta.companieshouse.gov.uk/company/06233875
Liquidation commences 17th November 2008 of Oldco –
https://www.scribd.com/document/381382155/Leeds-Liquidation
The football league handed them a 15 point penalty and it was noted:
"Bates placed Leeds in administration with debts of £35m before the end of last season so as not to incur a 10-point deduction for the forthcoming campaign. Administrators KPMG then agreed to sell the club straight back to the former Chelsea chairman, despite other bids. But Bates's offer to pay off creditors at a controversial Company Voluntary Agreement meeting was legally challenged by the Inland Revenue, who were owed £7.7m in unpaid taxes.
With the start of the new season fast approaching, administrators KPMG then decided to scrap the CVA and put the club back on the market. This prompted several other parties to make fresh offers, but Bates resubmitted his original offer and emerged victorious. The Football League objected to the fact that Bates had retained control for a third time without a CVA meeting where creditors could vote on whether to accept an offer to repay monies owed."
https://www.theguardian.com/football/2007/aug/09/newsstory.leedsunited
So to recap on the above:
Oldco went into administration.
CVA was rejected and liquidation process began
Administrators sold club to Newco
Newco took over the club
Club deducted 15 points and continued
Oldco went into liquidation
Still the same club.
3 Clubs - Just like Rangers
3 Oldcos going into administration - Just like Rangers
3 CVA rejected - Just like Rangers
3 sales of the club to Newcos - Just like Rangers
3 Oldcos going into liquidation - Just like Rangers
3 points penalties handed down - Our penalties were tougher
3 clubs continuing as they were pre oldco liquidation - Just like Rangers
There are a host of others out there also. Just like Rangers