Meet the Administrator - The minutes
At last the minutes of the last meeting with UHY Hacker Young have been agreed. I publish them in their entirety even though events of the last two weeks have 'somewhat` changed the figures.
Minutes of Meeting with Andrew Andronikou. Thursday 8 April 2010. 19.30 Fratton Park Boardroom
Present:- Roy Gregory (RG) Portsmouth Supporters' Club Central Branch; Mick Bleach (MB) Chichester Supporters' Club; David Taylor (DT) Vital Pompey; Jo Collins (JC) Pompey Supporters' Trust; Bill Gillon (BG) Pompey On-Line; Mike Hall (MH) Pompeyfans.com; Rob Ridout (RR) Isle of Wight Supporters' Club; Barry Dewing (BD) Portsmouth Independant Supporters' Association; Alan Taylor(AT) Supporters' Advisory Panel; Reece Percival (RP) Pompey Anorak Brigade; Pam Wilkins (PW) Football Supporters' Federation.
Andrew Andronikou (AA) Administrator; Mike Kiely(MK) Associate Partner UHY; Terri Mulgrew (TM) Senior Insolvency Administrator; Johnny Moore (JM) PFC Fan's Liason Manager.
Forward funding/debt situation
1.Have the administrators now clarified what the club owns, what has been sold away etc (i.e merchandising rights, tv revenue, the parachute payments etc). If not, when will this be clarified so as to enable interested parties to know what they are purchasing?
AA is now clear how the parachute payments work and what funds will be available. This is a difficult question to answer. As the administrator AA has made a deal with the Premier League (PL) There are obligations on the parachute money for instance to pay football creditors.
2.What is the size of the debt?
Total debt now £100m, broken down as:-
32m Gaydamak Trust, £5m Suliman Al Fahim, £1,800,000 Al Faraj, £5m General eg local traders, £17-18m HMRC (although £9m of this is disputed vat payment), £16-17m Football Creditors, £14m approx Portpin, £8-9m Football Agents.
Creditors are being asked to fill in a proof of debts form and to provide documented proof of debts.
3. Has the process of forensic investigation started?
Forensic investigation is a long drawn out and complicated process. AA has a duty of care to all parties. It is a very complicated matter. His focus is on saving the club. Overheads need to be reduced for going down from PL to Football League(FL). Whatever has happened in the past cannot be erased from the accounts, which will be gone through with a fine tooth comb.
They have asked for all Fugler's transactions, but this will be a large volume of work to check.
4.Future viability if parachute payments are drawn down?
Financial order is in place. The CVA is viable. If there was no football creditors rule finacial management would be easier
5. £5m compensation for HR is apparently missing from 2008, how far has the investigation progressed into this?
This payment is showing in the accounts. AA aware there is a rumour that it was paid to Sacha but the cash flow has not yet been traced through the accounts.
6. Who took the £1.5m in unauthorized payments confirmed by AA to the News and Telegraph?
Primary concern is to identify why it was made.
7. What happened to the >£20m in transfer revenue? According to the leaked accounts from Dec 3rd we were still owed £16.2m. If it was forward funded,
When was this?
Transfer money owed is still £0.5m. £1m -£1.5 due from Middlesbrough for Gary O'Neil if he plays one more game. AA believes they will not play him and will sell him rather than have to pay us.
8. What other irregularities have been uncovered?
No illegal irregularities yet uncovered.
9. What proportion of the current debt is owed to former/current owners?
Accounts show £32m owed to Gaydamak Trust.
Money paid to Chainrai has been verified as received into the club accounts, £17.5m was received from Portpin and can be tracked almost to the penny.
AA is aware of the loan to Benjani. It has not yet been repaid but will be.
AA does not know who paid Azougy's wages, he assumes they were paid by Fuglers but this has yet to be determined.
Status of the takeover
AA does not understand why Rob Lloyd (RL) talked to supporters first
1..Sources claim the change in backer was weeks ago - why raise it now?
The change in backer was last week.
2..AA confirmed to several newspapers that two groups had provided proof of funds. At the last meeting we were told no group had provided proof of funds. Why the discrepancy?
The discrepancy was caused by the fact that the two groups have now merged into one, with one proof of funding, which AA wasn't happy about.
AT pointed out that at the last meeting we were told that no one would have access to the data room without being named.
AA said that the money had been coming from a group which had been identified, which then decided against exclusivity. This had now changed to an individual who has not been named.. MK has allowed them to see the information but not take any out.
AA believes PFC can survive but wants to find the right person with integrity to take over. His gut feeling is that RL can deliver the money but is still working on the people involved.
BG asked if it were true that the group is one investor plus a hedge fund.
AA doesn't know until he has seen the proof . He has asked RL not to talk to supporters or the media until there is something definite. AA is keeping an open mind on RL until he has proof.
AA is arranging for PFC to be self funding, although if he could find a buyer with working capital that would be good. He doesn't want someone who will again overspend on players and put us back in the same position. He has to make sure the creditors get their money. He also realises the club has a social responsibility to the City of Portsmouth.
Liquidation is not an option as there would be no return to the creditors as the player registrations would revert to the relevant football authorities.
BG Asked if the prime aim is for PFC to be self sufficient, if so how would the debts also be paid back? AA Said that the CVA would take 4-5 years to clear.
3.Why has AA been quoted as saying Chainrai ticks all the boxes when he has not passed the FAPPT, the sale process is in its infancy and he is considered wholly unacceptable by the vast majority of the supporters?
AA maintains Chainrai does tick all the boxes. He has has not applied to take a FAPPT. He is AA's Plan B. Plan A is to bring someone else in. Portpin want their money back but won't bring the club down to get it.. AA is aware that the majority of supporters are against Chainrai but has to make a decision for the benefit of all.
BD pointed out that a football club is not a normal business so the supporter's opinions should be considered.
AA stated that Chainrai is very much Plan B, a last resort if there is no Plan A.
4..How many other expressions of interest are there and what stage are they at?
AA has received around a dozen expressions of interest including one from the USA, but none of them can meet his requirements. Cattermole wanted his flights paid to come over to the UK. AA does not believe that a buyer has arrived yet. He feels this will happen in the close season when the CVA is in place.
CVA related questions
1.How will the creditors be selected for the creditors committee?
AA has had an informal meeting with 9-10 creditors, some were football agents. The creditors will select their own committee, which AA wants to be a transparent process.
2. When will this creditors committee meet?
A proposal will be sent out to convene a creditors meeting at which the CVA proposal will be presented together with the history of why PFC is in administration and what the administrators have been doing and their proposals for getting the club out of administration. The creditors can elect a committee, min 3 and max 5, which should be in approx 4 weeks..
3. Do they know the date that the club has to exit administration by in order to avoid further points deductions in the Championship?
Must agree CVA by the time the fixtures for next season are published on 17th June (I have verified this is the correct fixture date. PW) So that the FL can be sure PFC will be able to compete next season.
4. Premier League allowing us to sell players or advance monies? Has any progress been made on this now that the 9 point deduction effectively seals our relegation.
If we win the semi will players be retained to allow the club to present a competitive side in the final?
AA speaking to PL but cannot discuss. Although we have a window to sell early, this does not mean players would leave before the end of the season. Loan agreements cannot be cancelled before the end of the season.
It was widely reported that at its height our wage bill was £52m. Now, after shedding the likes of Crouch, Defoe, Diarra, Campbell, Distin, Muntari etc Andronikou recently stated that the wage bill is still £45m. Are we meant to believe that the above players combined wages amounted to £7m per year?
Current wage bill is gross £4.5m per month.
Have March's wages been paid and if so, who paid them (and was the tax and NI on them paid also)
Yes March wages have been paid by the administrators from the club's money, which has not increased the debt.
Status of Peter Storrie? - Can AA explain Peter Storrie's role at the club and his salary?
PS has been kept on in a consultant role for his experience and knowledge of FA Cup admin and process. There are only PS and Tania Robbins left who know what is happening. Only football people can deal with football. PS also has good contacts when it comes to player transfers. He has waived his contract and is now only receiving a fraction of it.
AA said he has changed every aspect of PFC from top to bottom. When the CEO has become the focal point of the club it is all wrong. The only person who is heard of in public should be the manager.
Have they taken the PISA plan into consideration?
Do they understand that the vast majority of fans simply will not pay above £400 for season tickets?
AA There is a balance between what supporters want to pay and what the club needs to survive. Lucius is currently working on season ticket prices and comparing them with other FL clubs. AA would be sad if prices were set too high for a lot of supporters as he realises what a big part PFC plays in peoples lives.
BD pointed out that there is goodwill involved and that people would get out of the habit of attending matches and taking their children if prices were too high.
AA pointed out that money is needed to update the stadium.
Wembley, Club has 32 in Royal Box and a box of 20. All other tickets will be paid for. AA has no breakdown of who would have them. Yes, PS would be there.
Home games - the regime has been changes, as shown by the empty directors box at the last home game.
AT - Will we have a squad of players for next season?
AA - We will have a squad.
PW - Have redundancy payments been made?
AA - They are in the pipeline and will be paid in the next few weeks.
JC - Is the club operating within it's finacial capabilities?
AA - It is not making more debts, but players are on high wages and he is still not happy with the number of employees. There will need to be further cost cutting for playing in the FL.. He will get down to business in the close season.
JC - At the winding up hearing the judge made it part of the order for the Fuglers accounts to be made available?
AA - This is being done but it is a long process.
JC - MK said at the last meeting that he would let us have a copy of the court order.
MK - Will send this to JC.
RG - Who will be the manager next season?
AA - Hopes Avram will stay. He is included in their plans, likes the club and wants to stay..
MB - Is anything happening about the stadium?
AA - We have been talking to the Council about it.
BD - Will ticket prices be reduced for the last two home games?
MK - Prices have been reduced - BD but this is only on the Milton End.
AA - Will be reduced for Villa game in all areas.
AA Agreed to another meeting, hopefully in around a months time - now confirmed as 11th May 2010.
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