Too much credit
Today seeks to clarify the future with regards to ‘football creditors’ in the Industry. How often have I been in debates on seemingly ‘straight forward’ definitions as to what’s ‘in’ and ‘out’ of the football creditors list. The importance often in my acting as adviser to a bidding party that seeks to understand more fully the investment implications of any expression of a desire to take over a failing club.
e-petition describes the current debate as: “When football clubs go out of business or into administration in the main with large debts it is the football industry that protects itself through this rule. This means that other clubs, players on large contracts, are always guaranteed to receive monies owed to them but the companies servicing clubs with outstanding invoices only receive whatever the creditors agreement allows, normally 1/2p in the pound”.
Of course, depending on whom I’m representing, I might be either for or against the motion to change. However, in that I seek a ‘level playing field’ in most instances it would appear only fair that the rules governing administration for football become streamlined with those for business as a whole. Certainly, HMRC agrees and seeks parity for this sector of the economy with the rest of the real world. Since the Enterprise Act, HMRC has lost its status as a preferential creditor and joined the ranks of unsecured creditors in an insolvency situation.