Hull Set for Talks with Creditors

Further to last week’s revelations about the state of the clubs finances, the chairman of Hull City FC is to meet with creditors this week to address the club’s debts, as it prepares to be relegated from the Barclays Premier League.

Adam Pearson, who helped rescue Hull from administration in 2001, is faced with financially restructuring the club and tackling debt believed to be up to £35m. The club must also contend with losses that relegation from the Premier League would incur such as television revenue, which was worth £32.5m to Hull in 2009.

Pearson insists the club will not go into administration, but has not ruled out the possibility of the club entering a company voluntary arrangement (CVA). The most obvious way for the club to address the financial situation is to sell high profile players. However, Pearson acknowledged that the imminent FIFA World Cup tournament will make it difficult to make significant financial gain from the sale of players.

Pearson said: “Administration is not on the agenda. It is a pretty simple structure here, the owner has 100 per cent of the club and his very clear statement is that administration is not on the agenda, so we will have to find another route forward.”

If the club enters a CVA it will be deducted ten points upon entry into the Championship.

Pearson added: “There are numerous routes, one is the informal route which everyone would like to take, where you sit down with creditors and try to restructure.

“To go through the CVA would be one of the last scenarios, but if we have to go down that route then we have to build a team that can fight back from that deficit.”

Pearson is due to meet with creditors all week both at the KC Stadium in Hull and in London. There is even a possibility that former manager Phil Brown, who is currently on gardening leave, will be reinstated at the expense of ‘football management consultant’ Iain Dowie, as this could be a cheaper option.

Hull currently have several players on high wages with little resale value, including Jimmy Bullard, who was purchased for £5m and is believed to be earning £45,000 a week.

Pearson’s statement is unlikely to relinquish rumours about the possibility of Administration, as the mounting debts and loss of revenue will soon take the club deeper into trouble.

Posted at 03:22PM Apr 28, 2010 by Marc Stenton in Insolvency  |  Comments[0]