Vital Football

We are not done...just yet...

We are not done...just yet...

Details of what had developed last night were pretty sketchy for me - I was travelling to Pompey on the train, and as such my t'internet connection is pretty weak.

Although, from what I could gather our CVA proposal had been thrown into chaos and seemed destined for failure as one of the creditors, HMRC, had got their own insolvency people, Griffin, on the case to propose their own CVA.

They feel that Sacha Gaydamak's claim for £32m should be dropped, trading insolvent should remove his right to make his claim - in fact he will be hunted down for an amount of £50m or so, and creditors should be offered a better deal than the one they had, something like 65p up to as much as 99p in the £, depending on Gaydamak's payment.

With this development my first though was that we had no chance of the other unsecured creditors accepting the 20p in the £ offer if they thought that they had a genuine shot of getting more, and perhaps in all reality rightly so...

It 'seemed' that the HMRC's 'backer' believed that the administrators were working too much in the clubs favour, and not the creditors, as they should be to be fair.

Having the CVA agreed, let alone coming out of administration seemed highly unlikely, in fact starting next season on a minus points total, as much as -19pts and with the transfer embargo STILL in place, not to mention the fact that player contract could basically be 'torn up' left us in a whole heap of trouble from the looks of it.

As I say, my details were sketchy, at best, but the impression I was getting was things were not good, and who said things could get no worse...

That said, on the flip side the common thought is that this is a last ditch 'publicity stunt' attempt by HMRC - who are mighty peeved at football clubs and the way they work - to try and force the hands of people to get them a better deal because at present, I think I am right in saying, they cannot command enough of the unsecured credit (on a proven level) to oppose the 20p in the £ offer, commonly believed to be a 'decent offer' from an administrative point of view, that other creditors appeared happy with.

A creditor thinking they can get more than first offered would, inevitably, be tempted to go for more, who would not?

But in all reality is £20p in the £, which could rise to 25p in the £, to gain a full percentage of money owed for the duration of a 4/5-year period better than a higher amount in the £, but for a shorter time period until we go out of business, not better? And we WOULD go out of business eventually on these repayments now being asked.

Repayment on that level, taking into account it would almost certainly mean relegation again, just would not be sustainable over time - so, as said, the current repayment amount and option surely makes better 'financial sense' to most unsecured creditors, many of them are actually Pompey fans (former owner fans, not fans of the club of course but fans of the money they would get back) so would that not weigh on them too?

By chasing this higher offer, which is thought should be paid; creditors would in effect be signing our death warrant as well as their own, right...

So, whilst it would be foolish to 'dismiss' this threat as a non-starter perhaps getting too carried away by its threat could be something to consider - perhaps I am being too optimistic, a new found optimism all of a sudden, but automatically jumping on the 'we are totally doomed now' bandwagon could be advised against?

Either way it will be a LONG 10-days or so in the lead up to, and the actual taking part in the CVA meeting next week...


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Date:Tuesday June 8 2010
Time: 8:00AM


Rug, it just seems to go on and on this saga. You have to question AA's intentions here and I still think he is working on behalf of Chanrai. A nail biting few days in the run up to the CVA meeting.
08/06/2010 09:00:00
BlueDR, you misunderstand Chan doesn't lose either way, he has a charge on the ground so can walk away with most if not all of his money whenever he wants. The Griffin counter proposal is from an unsecured creditor banking on Sasha Gaydamak walking away from getting his £30 m of money back. Gaydamak will have had legal advice about but hasn't walked yet. Rug my money would still be on a version of AA's proposal for the reasons you state above.
08/06/2010 09:33:00
I wonder if Mr Lampitt will issue a statement
08/06/2010 09:36:00
I might be wrong, but I thought the trading whilst insolvent took place after Gaydamak sold the club . . ? And if he doesn't get his money the club can kiss goodbye to the land. I hope you are right Rug, about the creditors seeing sense and realising that they won't get anything if the club goes under, which it will under this proposal.
08/06/2010 09:38:00
Having just read through the entire Griffin document it looks a bit like pie in the sky. It reckons on us making the best part of £30m in player sales this year and reducing our entire wage bill to less that £5m. The only income we'd get would be through ticket sales and sundries (hospitality, programmes, kit sales). Lets assume 12k for 23 games at an average of £15 per ticket (i'm thinking a fair proportion of kids as most adults would of given up). That comes to about £4.1m plus other sundries maybe taking it up to 5 or maybe 6m and that's the income to run the entire club, players, support staff, maintenance, rates, rent etc. Say we can scrape together 4m for a squad of 20 players that would average less than 4k per player per week. So we'd be starting the season with (probably -10 or 17 points) a massively under strength small squad resulting in relegation and less money coming in and probably administration again in a few years time. I think the existing CVA is a bit low, i'm sure there are large sums in the debts which shouldn't be there or can be removed (like HMRC fines) and if they can convince Gaydamak to toddle off (if there is a chance of something being found against him) maybe we could be offering 40 - 45p in the pound without putting the future of the club at risk.
08/06/2010 09:55:00
Hang on a sec - something just occurred to me. The HRMC are trying to get Gaydamek out of the picture so that their share of the debt goes above 25% and they can then scupper the CVA completely!
08/06/2010 10:18:00
Rug I had my legal risk manager look at the Griffin proposal ( as opposed to his real job) and he doesn't think it stands up without creditors expending at real risk lot on a court case. It's down to the creditors but he thinks HMRC have more chance of getting money back from the PL.
08/06/2010 10:45:00
I cant take it anymore, im gonna concentrate on the world cup for a while!!!!!!
08/06/2010 10:53:00
sorry, premature post, to finish off; Why would Gaydamak toddle off from 30mil? He will argue that football doesn't operate in the same way as normal business, it is effectively a credit loaning and borrowing scheme and according the the chap on sky sports news today who complies a report for the PL accounts Gaydamak is right. To prove deliberate malpractice by Gaydamak who acted generally in accordance with the standards of the industry ie loans against future possible earnings will be very hard. Secondly he would just bankrupt his business dealings here and transfer his profitable Pizza assets etc to an Isreali holding company where they wont be recovered.
08/06/2010 10:59:00
I think the point isn't to go after the £50m fine but more to show there's enough possibility that he behaved in a reckless manner that he might chose to cut his losses. This is of course only if there is something in the accounts that shows they acted inappropriately. The main point is were the club trading whilst insolvent whilst under his reign, if they were - which seems if not likely then at least plausible - then he's broken basic business law in the UK.
08/06/2010 11:21:00
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