The first time in ages (being a referee) I've had something useful to say on the list and the lack of access to my subscribed account at work spoils it. Anyway to prove I used to know something about company insolvency ...
Under a CVA (Company Voluntary Arrangement) it needs 75% of creditors to agree to the arrangement being put in place. If 75% don’t agree then the CVA is more likely to result in liquidation which is forced through when a winding up order is granted by a court when a petition is presented by a creditor. There is a threshold for presenting a petition for a winding up order but it may be as low as £750 (but I'm not 100% on this figure, it may be £20K). Obviously with the IRS petition already rolling, it seemed that urgent action was needed to avoid it. If the liquidation had gone through the creditors would have lined up for payment. Secured creditors would have realised their security by selling it off and applying the cash against the balance of their debts. Any remaining debt may become a non-preferential creditor. Once the secured creditors had done their part, the preferential creditors (who include IRS, debenture holders with floating charges and employees with unpaid wages) come next. Again any part of their unsettled debt becomes non-preferential debt. Last in line are the unsecured creditors and the leftovers from the first two classes of debtors. Usually there's little left to fight over and they get paid a dividend which is a fancy way of saying a % of their debt. It might be as low as 1p in the £ (i.e. 1%). The administration allows the club to walk away from non-football debts and be run as a going concern. This only works where there is belief that the business has prospects of running at a profit in the future. With regard to new investors stepping in, they would want to carry out due diligence. With the company effectively no longer in existence, this would have been difficult and more importantly taken time the company didn’t have. The administrators have gone for the first person/group willing to gamble on an uncertain future and that is the one group of people who know the business inside out ... The current directors! May not like it but it puts the club on a firmer footing and brings stability when the football side needs it. God I'm boring for knowing a lot of this stuff -----Original Message----- From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED] On Behalf Of Andy Clayton Sent: Friday, May 04, 2007 5:38 PM To: [EMAIL PROTECTED] Cc: [EMAIL PROTECTED]; [email protected] Subject: Re: [LU] Admin £11M worth of them apparently. On 04/05/07, [EMAIL PROTECTED] <[EMAIL PROTECTED]> wrote: > > > > Does this mean we do not have to pay Fowler, Mills and all the other > ex-player the remaining 7 weeks wages we were supposed to be paying > until end june 2007??? > > > Sadly not. "Football debts" have to be paid in full in such circumstances. > > Mark _______________________________________________ the Leeds List is an unmoderated mailing list and the list administrators accept no liability for the personal views and opinions of contributors. Leedslist mailing list [email protected] http://list.zetnet.co.uk/mailman/listinfo/leedslist The Leeds List - "where never is heard a discouraging word..." No virus found in this incoming message. Checked by AVG Free Edition. Version: 7.5.467 / Virus Database: 269.6.2/787 - Release Date: 03/05/2007 14:11 No virus found in this outgoing message. Checked by AVG Free Edition. Version: 7.5.467 / Virus Database: 269.6.2/787 - Release Date: 03/05/2007 14:11 _______________________________________________ the Leeds List is an unmoderated mailing list and the list administrators accept no liability for the personal views and opinions of contributors. Leedslist mailing list [email protected] http://list.zetnet.co.uk/mailman/listinfo/leedslist The Leeds List - "where never is heard a discouraging word..."
