Another football club has entered into Administration with Plymouth Argyle appointing Brendon Guilfoyle of The P & A Partnership as Administrator after an eventful morning at the High Court.
A court hearing was scheduled for 10.30 this morning were H M Revenue and Customs applied to the court to appoint as Administrator ASAP. After a little bit of legal toing and froing and after a change of Judge due to a conflict of interest the directors and shareholder met and appointed Mr Guilfoyle as Administrator.
H M Revenue and Customs had also tried to apply for a winding up petition but this was turned down by the Judge who advised them to challenged the football creditor rule which they intend to do.
Mr Guilfoyle has issued a statement in which he states that he is looking to find a buyer for the club before the 17 March 2011 and he has already received interest from a number of parties. He is also going to sit down with Plymouth City Council on Monday 7 March 2011 to plan the survival of the club.
But how has this come to happen with Plymouth who were only taken over by the New World Partnership in 2009 and were heavily involved in the the failed World Cup 2018 bid in which they had hoped to be a chosen venue.
Reason for the failure include the lack of fund being invested by there Japanese Shareholders who had continually promised and failed to invest funds and the estimated loss of £3million in turnover when the club was relegated from the Championship last season
Since then the club has had to fight off several winding up petition from H M Revenue & Customs the most recent being in February this year in which Peter Risdale the former Chairman of Leeds United and Cardiff City and football consultant employed by the board claimed that £2 to 5 million would be required just for Argyle to see out the remainder of this season. (This is about the same amount of the alleged payoff received by Roy Hodgson when he was sacked by Liverpool)
So what is going to come out of todays event
Are H M Revenue and Customs going to continue with the aggressive approach to force football clubs into Administration?
Are they going to challenge the football creditor rule and should the Football Association and Football League be worried?
Are Plymouth Argyle going to find an buyer before the 17 March?
Only time will tell.
We’re sure you’re already aware that HMRC and other creditors are becoming more aggressive in their debt collecting techniques.
Below are the various methods HMRC are employing that may affect your client’s business. If your clients are worried about any current actions being taken by HMRC then contact us immediately.
Distraint is known as the preferred debt collection technique of HMRC as no court action is required to pursue. When HMRC levy a distraint they are able to seize goods for them to auction off. The alternative course of action is to allow you to enter into a walking possession agreement, so that you can continue to use the goods whilst the debt is being paid off. However, HMRC still retain all the rights of the distraint, where the goods cannot be sold without their permission.
A Personal Liability Notice for National Insurance may be issued when there has been an underpayment of contributions and HMRC consider failure to pay is attributable to the fraud or neglect of the directors. Your clients can be made liable for all National Insurance payments due to HMRC.
A Director Disqualification can occur if your client’s company goes into an insolvency procedure with a significant debt outstanding to HMRC. This might occur if your clients have not been making payments to HMRC and are effectively using the money owed to finance ongoing trade.
PAYE Security Bond is NEW LEGLISLATION which HMRC are trying to implement. The PAYE security is likely to be very similar to the request for a security bond for VAT. Should a bond for PAYE or VAT be requested then this may have adverse consequences on your client’s future cashflow. Immediate advice should be taken on how to deal with this.
For any of your clients who you feel may be facing serious commercial problems due to these regulations, contact us for a free, confidential, no obligation review whereby if necessary we can guide your client on;- Business Restructuring, Pre Pack Administration, an orderly Liquidation, Company Voluntary Arrangement (CVA) or any other process deemed necessary.
Hodgsons – Expert advice of the highest quality