HMRC Appeal Pompey CVA

HMRC have continued in their ongoing battle against the controversial football creditors rule, they have now launched an appeal against Portsmouth FC’s CVA proposal, it is thought that they probably rejected the proposal initially, however it still got the 75% approval necessary.

Part of their claim is stating that there were ‘material irregularities’ in the vote count when the CVA was voted on.  Previously, Administrator Andrew Andronikou had denied the reported figure of £37m owed to the taxman, saying it was less than this.  However, HMRC believe that the debt was such that they should have had a more than 25% sway in the vote, thus being able to block it completely.

If the application to the High Court is granted and the CVA blocked, it may have a detrimental effect on the club due to current football rulings.  If Portsmouth cannot exit Administration via a CVA, they will receive a further points penalty at the start of the new season, as well as having to remain in Administration.

 Furthermore, the Football League may place a transfer embargo over them, meaning they would not be able to register any new players, or even renew the contracts of existing ones.

HMRC have released a statement saying, “We are acting in the interests of all those creditors who are not in the football industry. We don’t think it’s right that they are offered 20p in the pound against full repayment of others. Also we cannot agree with the striking out of £13m of debt which seriously undermined our ability to challenge the CVA."

Posted at 01:48PM Jul 16, 2010 by Marc Stenton in Insolvency  |  Comments[0]