Portsmouth FC into Administration

Will new Insolvency Practitioners keep Portsmouth FC in existence?

Portsmouth Football Club has entered into Administration for the second time in three seasons.

The 2008 FA Cup winners were placed into administration at a High Court hearing on Friday 17 February 2012. This was as a result of the issuing of a winding up petition by HM Revenue and Customs on 03 January.

The club received a 10-point deduction due to the administration. This is deepening the threat of relegation as they now currently sit at the forefront of the relegation battle. Should the club be relegated it would have a detrimental effect on the attract-ability of new investors to keep the club alive.

The club has debts of around £4m, of which around half is owing to HMRC in unpaid tax.

Other creditors include West Bromwich Albion, Wolverhampton Wanderers and Bristol City Football Clubs, the Football League itself, and Portsmouth City Council.

The administration order came after the club’s parent company, Convers Sports Initiatives, went into administration in November 2011.

Former professional footballer Trevor Birch, of the accountancy firm Pannell Kerr and Forster, has been appointed by a judge as Portsmouth’s administrator.

The administration allows the club to access its bank accounts after they were frozen following HMRC’s winding-up petition. It also enables Portsmouth FC to continue trading while searching for new owners. However, the future of the Fratton Park club is looking uncertain.

It is less than four years since Portsmouth won the FA Cup, beating Cardiff City in the final at Wembley. The club became the first Premier League club to be placed into administration in February 2010. This results in the deduction of nine points and relegation at the end of that season. Now, as members of the Football League, the automatic penalty is a 10-point deduction. Consequently, it has seen them drop to the relegation zone.

A spokesman from HMRC said they were pleased the court had appointed different administrators to those of parent company; “HMRC is pleased that the Court agreed with our view that the creditors of any business have a right to expect that the administrator in these circumstances is completely independent. This is why we suggested the appointment of PFK whose knowledge of the football industry and lack of previous connections to Portsmouth FC should reassure creditors,” said the spokesman.

Insolvency practitioners are brought into financially struggling football clubs much more. Lisa Hogg and David Elliot of Wilson Field Limited were appointed Joint Administrators and then Joint Liquidators of Gretna Football Club when it ran into difficulties. They had no interest with the investors.

Andrew Bilby

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