Pompey Takeover Saga

[Wes Tender]

There was a bit of a wobble an hour or two ago, when it seemed that they might get away with it all. But when people have the chance to get over the shock/horror and think about it rationally, they begin to take comfort that it won't happen. Further comfort comes from the Skates' forums accepting that they won't get away with it and even some of the more intelligent posters admitting that their behaviour is a matter for shame.

[Draino76]

Still toast.

 

Things have only got worse.

[krissyboy31]

All of the TV money/parachute money is being held by the footballing authorities to pay off the football debts.

 

Player sales will go to Baloo.

 

And their day to day income to carry on as a going concern is coming from.............????

[St Marco]

Maybe they are increasing the debt on purpose to lower the % of unsecured creditors i.e HMRC. Would not surprise me.

 

At the end of the day though they won't have got away with it. The club's reputation will forever be tarnished in financial circles. Legit companies will do a lot of research into the people involved before they ever agree to lend them money again. They will be in CCC with a dire squad, no money and by the looks of things a new manager. They will struggle next year i think to just stay in CCC.

[Guided Missile]

The law allows HMRC to reduce the penalty to take into account the nature and quality of any disclosure made to them. A number of issues emerge here.

Firstly the legislation introduces the concept of ‘unprompted disclosure'. Basically this will happen if the taxpayer brings the error to HMRC's notice without HMRC being aware of it or having already started an inquiry. The law states that any other type of disclosure will be regarded as prompted and that will make a significant difference to the level of penalty.

 

 

 

 

Disclosure does not just mean bringing the matter to HMRC's attention. Account will also be taken of the co-operation which is given to HMRC in quantifying the error and in providing access to records. Guidance in HMRC's manual suggests that the reduction to be made in the penalty will be greatest where:

• the original disclosure is full and complete and covers not only what the error was but how and why it arose;
  
• the taxpayer provides full co-operation in enabling the investigation to be concluded as quickly as possible; and
  
• the taxpayer allows HMRC access to records and documents without the need to resort to formal orders.
  

HMRC will take these issues into account in determining the level of reduction which can be made to the maximum penalty. They are not allowed, however, to go below a minimum level which the law stipulates.

These minimum levels are as follows:

 

Nature of offence

 

Max % Min unprompted Min prompted

Careless action 30% 0% 15%

Deliberate no concealment 70% 20% 35%

Deliberate with concealment 100% 35% 50%

 

It is very obvious that there is a significant effect in making a full unprompted disclosure. Even in prompted disclosure situations the level of co-operation will make a large difference to the ultimate penalty level.

 

Assessing the penalty

 

Basic procedure

The law requires that a penalty should be formally assessed by HMRC. They have an important power to suspend some or all of any penalty which relates to careless action only. If they decide to do this, they can stipulate the period for which the penalty is suspended and can impose conditions on the taxpayer which must be complied with. At the end of the period HMRC will consider whether the taxpayer has met the conditions. If the conditions are satisfied then the penalty will be dropped. If they have not then the penalty can be imposed. HMRC are only likely to do this where they can set and measure the conditions to improve compliance. It is unlikely that they would agree to suspend a penalty in relation to a one-off item like a capital gain.

 

 

Liability of an officer of a company

The penalty provisions extend to situations in which a company becomes liable to a penalty and the inaccuracy arose as a result of the deliberate action of an officer of the company. In those circumstances HMRC can seek to recover some or all of the penalty from the officer personally. This approach is likely to be followed where it is clear that the officer may have gained personally from the deliberate inaccuracy or where the company is, or is likely to become insolvent and will not have funds to pay the penalty.

[View From The Top]

And their day to day income to carry on as a going concern is coming from.............????

 

Great isn't it.

[S-Clarke]

they're like this irritating little leach, that just will not let go. Just clings on and keeps hanging in there somehow...

 

i still think they're screwed, even if they start next year on 0 - there is no way they will be able to get in players of the quality to get them promoted - and the longer they stay down there it will get even harder.

[anothersaintinsouthsea]

Pompey are like that floater that keeps bobbing back up. Irritating but you know it'll get flushed sooner or later.

[CB Saint]

If they do survive and form this new company they will have a £5.5m pa millstone around their neck for the next 5 years. On top of this they have to weigh up with the footie creditors money, the sum of which escapes me, but is considerable. They have to get they wage bill down to £200k per week so that means off loading anyone half decent and all their loan players will return to home clubs because the players will want to play in the prem. Now to be able to do any of this they have to generate £25m pa in revenues which (assuming the first parachute payment has been earmarked for the creditors) is optimistic. Have I missed anything?

 

They will be struggling for years. Long live the thread!

[trousers]

Sorry if I'm not keeping up, but are they talking about liquidating the holding company here or the 'football club' itself?

 

If the latter then they effectively become a new club and new clubs don't just automatically walk into the 2nd tier of English football, do they?

 

Either they are starting afresh or they're not, surely?

 

And even if it's the former (I.e. Holding company) didn't we learn the hard way last year that the football league don't recognise this dual identity??

 

Confused...

[JackFrost]

A lot of people are forgetting that the FL had no say in this meeting today.

 

I think they'll have something to say about

 

1) The 'new' Portsmouth FC even starting in the Championship, as opposed to the Conference South for instance

 

2) A very hefty points deduction

 

It's only Andronikou I believe that reckons they can start next season in the Championship with no points deductions in their new guise

 

And besides, even if they do they'll have no money, a **** poor squad full of frees and loans which will be one of the favourites for relegation

Edited 6 May, 2010 by JackFrost

[niceandfriendly]

I'm so sick of hearing news stories about that disgusting lot. I just want them to die, now.

[The boy done well]

If Bournemouth had a very strict embargo for a debt of £1.5m what kind of an embargo are they like to get for debts of £138m-ok, scaled down by the CVA but still huge. I doubt if the football league would allow them to add anyone to their squad except in dire emergency for years.

[aintforever]

I still refuse to believe that the FL will give them anything less than -17. leeds had a CVA agreed and were still punished, and considering the grief they put Bournemouth through there has to be some sort of fair play.

 

What the Skates have done is much worse than Leeds and being as good as relegated anyway meant the -9 was not even a punishment.

[Crab Lungs]

Put them in L1 :smt077:smt077:smt077

[Matthew Le God]

Comparisons? Not a perfect match of course.

 

http://news.bbc.co.uk/sport1/hi/football/teams/l/luton_town/7507736.stm

 

http://news.bbc.co.uk/sport1/hi/football/teams/l/leeds_united/6920103.stm

 

10 points out of the 30 point deduction Luton Town had were for financial irregularities in payments to agents. So the Football League do dish out punishment even if it is criminal.

 

There do seem to be some odd dealings with Pompey and agents. Mandaric, Storrie and Redknapp all have court cases for tax evasion and convicted fraudster Daniel Azougy was left advising operations.

 

From the Creditors document on page 5

 

Mr Al Faraj appointed Mr Mark Jacobs of Fuglers solicitors and Mr Daniel Azougy to assist

with the general running of the club and the making of executive decisions.

Edited 6 May, 2010 by Matthew Le God

[Saint_John]

Comparisons? Not a perfect match of course.

 

http://news.bbc.co.uk/sport1/hi/football/teams/l/luton_town/7507736.stm

 

http://news.bbc.co.uk/sport1/hi/football/teams/l/leeds_united/6920103.stm

 

 

I can see Leeds and Luton taking legal action against the FL if they do not impose a points penalty.

 

When we were docked 10 points I remember Lord Muck saying something like "The FL has got to be seen as FAIR to all it's members".

[jawillwill]

I thought this thread was going to be about Pompey buying Marek Saganowski. LOL!

[Gingeletiss]

Sorry if I'm not keeping up, but are they talking about liquidating the holding company here or the 'football club' itself?

 

If the latter then they effectively become a new club and new clubs don't just automatically walk into the 2nd tier of English football, do they?

 

Either they are starting afresh or they're not, surely?

 

And even if it's the former (I.e. Holding company) didn't we learn the hard way last year that the football league don't recognise this dual identity??

 

Confused...

 

 

Portsmouth football club....PFC as they were 11 years ago.

 

Portsmouth city football club....PCFC as they are now. They are past masters at regeneration, and binning all their debts. I trust the FA the FL, UAFA, and FIFA are all compliant in this, because as a football fan, I think it stinks.

[Dark Munster]

 

200 MILLION.

 

I rescind my earlier statement that Peter Storrie was Probably the Worst CEO in British Corporate history.

 

I think time will now show he was Probably the Worst CEO in GLOBAL Corporate History.

But if they get away with it, then wouldn't that would make him a very successful CEO?

 

There's no way that poopy can get away with all this scot free, something will happen to them, also were the Football League in the meeting today agreeing to the fact that poopy won't get a points deduction next season if they become a new company? No, they can do as they please as they've always done. Also if poopy change companies I reckon they might get told to fook off to the conference.

 

The HMRC are looking out for themselves here and I agree with GM that they are after the full amount of money owed (now just under 35m) and if they don't get it then they will deny the CVA.

 

There's more to come yet I reckon.

 

I hope you're right. But maybe HMRC are now willing to settle for 20% of 35m (in effect, about 40% of the original 18m), rather than getting S.F.A. There's no way they're going to get anything close to 100% of the original 18m.

 

I am hoping that HMRC are agreeing to let them propose a 20% CVA, only to then veto it because they (HMRC) are owed over 25% by value of the debt. Thus triggering AA's much stated liquidation?

 

They surely cannot roll over and let AA rub their tummies for 20p in the pound over 5 years?

 

See above.

CHEATING BASTARDS.

[Viking Warrior]

That Alien **** is a total arsehole. Are the legal entitiies Premier League etc so inept they cannot see that he is pulling the wool over everybodies eyes.

 

The next thing is the PL will award him compensation for his hurt feeling

 

**** off pompey **** of android.

 

Sorry for my language but PCFC and the alien have totally ****ed me off with the latest story.

 

Come you football authorities get a ****ing grip and sort these cheating bastards out once and for all

[OldNick]

Oh, and at those who said they would get away with it also.

Now Benjii, I have been at a funeral today and so missed most of the action.

On the way home i had to listen to Matt Slater on five live. He said that Pompey were going to pay 20p in the £ over 5 years and would start next season on 0 points in the CCC.

Now of course he may not know the full facts as nor do I.

They then went and interviewed Terry the builder who is on the creditors committee, that also includexs bizarrely the PFA (why when their debts are covered by football full payment stuff)

Now Terry the Builder and Bishops printers together were on the committee. Both Pompey fans or suppliers in the future.

The builder was owed 55k. Now he will get 20K knocked off his tax bill as a bad debt, and also return back 20p in the pound. Of course the original 55k included his profit, perhaps half.

What is his debt really after tax rebate and his 20p in the £ ? 10-20k perhaps at most less his initial profit. He is not going to allow anything to happen to Pompey and as he said, @ At least we can guarentee the clubs survival'

The HMRC have upped their debt, in this climate , will they turn 7m down?

Pompey will get away with it.

 

It is not that i dont trust your , Claphams or others judgement on this, it is just that it is too big a rotten apple to crush as the smell is too much for people to take and it would bring too many people into the equation.Football does not want that.

There has been no question why Pompey appointed a new CEO, funny he was part of the FA in a great job, why leave tghat, unless he was sent to cover.

I feel sick of this and the way the media just brush it off as 'Oh Pompey owe 138m' no questions and then, 'and we feel sorry for the supporters'

Well I dont as they are donning their Wembley kit all on the back of being part of supporting a illegally trading business

[Doctoroncall]

Damn - I'm good!

 

Ahem...one I posted earlier :

 

Originally Posted by Guided Missile

Let's get one thing straight. After the winding up order was published in the London Gazette, a court order was required to transfer assets from the club. It was not possible to change the status of members, ie shareholders, or creditors. Any such activity will be ruled invalid, ie unsecured. Even then, the debts have to be shown to be valid to the court, ie have a loan instrument that was agreed by Portsmouth City Football Club and the lender. I think that the court will quickly whittle down the supposed debts that the administrator is claiming.

 

What people also forget is that two can play at this game and HMRC have not even started with penalties and interest on the money they are owed. Since April 1st of this year, they can impose penalties of up to 100% of the VAT owed and if the company can't pay, ie is insolvent they can force the directors to pony up.

 

The fun will continue for a while and it continues to look more and more like that scene in "Bridge Over the River Kwai", when the train crashes into the river.

 

Not right according to this... guardian report on CVA meeting

[OldNick]

Not right according to this... guardian report on CVA meeting

AA will get freedom of the city. They will name a bell after him and Avram after this dodge.

Seems to me the HRMC have handed this case over to the office junior

[Joey-deacons-left-nut]

I'm quite looking forward to the Football League getting their grubby little mits on the filth....

[NickG]

Oh, and at those who said they would get away with it also.

 

all I have heard was Radio Solent saying this was a good news day for skates as they definately will still exist and start in CCC on 0 points.

 

went onto say their debts will be cleared and the company liquidated.

 

if this is the case, as they would have been relegated anyway then they have got away with it!

 

not paying players, paying for players when on ban etc.

[chrisobee]

Disgraceful, the Revenue wouldn't hesitate to bankrupt your average person for £5k or less and yet Poopy look like getting away with it. The tax they owe is all our money so we've all been cheated by this scummy little bunch of crooks. My hatred of Poopy was never as great as most people but it sure is now. Take away Saints and you can stick League football where the sun don't shine. Fairness? I doubt most of those involved in running the game have a clue what it means.

[Kingsbridge Saint]

The Football League will not allow them to start on 0 in the proposed circumstances, or their integrity and reputation for treating all clubs fairly will be completely shot to pieces. They have been very consistent with this in the past.

 

I think the CVA will be agreed because the players contracts revert to the football authorities in a liquidation if it isn't agreed. That means the creditors would get much less than under the CVA. The Revenue could now block the CVA to make an example of them, effectively writing off 7M from the public purse as a deterrent to others in future, but would take down the other creditors as well so I think they are unlikely to do that.

 

So most likely scenario is now CVA agreed, and Pompey play on next season probably under a points penalty in the Championship, with a low quality playing squad trying to generate 25M a season to wipe it's own backside. So it might be fun for years to come!

[NickG]

how can they have a points penalty if cva agreed?

[aintforever]

I think the CVA will be agreed because the players contracts revert to the football authorities in a liquidation if it isn't agreed.

 

Surely the administrator can sell all the players before liquidating?

[Minsk]

Maybe I am being thick, or maybe it's the alcohol, but........

 

They are going to liquidate the owning company in 9 months time? This is half way through next season. Therefor.....

 

In order to get their 'Golden Share' for next season surely they have to first pay off all outstanding football debts? 38m? Or take a points deduction?

 

Or, if they are allowed to start the start the season, surely they will have a transfer embargo if they have football related debts (ala Bournmouth) which means not even being allowed to sign players on loan. Seeing as they will pretty much have to off-load most of their current squad, what kind of team would they field next season? How few of the phew will pay to watch such a team getting stuffed every week? How will they then be able to pay the agreed 20% in £?

 

And then, given the mess they are in, I have no doubt any investigation into the former company would result in finding financial irregularities. Weren't Swindon once relegated a division (or 2?) for such things?

 

In summary, even if their plan does come to fruition, they should still be royally screwed.

 

Thoughts?????

[dubai_phil]

But if they get away with it, then wouldn't that would make him a very successful CEO?

 

 

They won't they're Toast

 

Hayling Island isn't that far from Ford Open Prison either so in that respect he may get away with it

[Gemmel]

how can they have a points penalty if cva agreed?

 

3 different ways;

 

1) Financial Irregularities (See Luton)

2) Peter Storries tax case (Based on his role as CEO - Thats the charge)

3) Liquidation - No one has ever liquidated and not received a penalty.

[Kingsbridge Saint]

how can they have a points penalty if cva agreed?

 

Because Androids plan is to liquidate Portsmouth City Football Club Ltd regardless - he said so last night. There has always been a points deduction in these cases, regardless of where the football club sits in the structure.

[Kingsbridge Saint]

Surely the administrator can sell all the players before liquidating?

 

Not sure there'd be much time if the CVA is rejected. At best it would be a fire sale and realisable values would plummet.

 

It is interesting that HMRC have implied they will back the CVA only on condition that liquidation of Portsmouth City Football Club Ltd follows. That means that legally they can go after the company directors for the balance of the money they are owed beyond the 20% or so they get through the CVA. If I was Chanrai or Storrie I would be heading for the hills.....who else is exposed?

[slickmick]

Now Benjii, I have been at a funeral today and so missed most of the action.

On the way home i had to listen to Matt Slater on five live. He said that Pompey were going to pay 20p in the £ over 5 years and would start next season on 0 points in the CCC.

Now of course he may not know the full facts as nor do I.

They then went and interviewed Terry the builder who is on the creditors committee, that also includexs bizarrely the PFA (why when their debts are covered by football full payment stuff)

Now Terry the Builder and Bishops printers together were on the committee. Both Pompey fans or suppliers in the future.

The builder was owed 55k. Now he will get 20K knocked off his tax bill as a bad debt, and also return back 20p in the pound. Of course the original 55k included his profit, perhaps half.

What is his debt really after tax rebate and his 20p in the £ ? 10-20k perhaps at most less his initial profit. He is not going to allow anything to happen to Pompey and as he said, @ At least we can guarentee the clubs survival'

The HMRC have upped their debt, in this climate , will they turn 7m down?

Pompey will get away with it.

 

It is not that i dont trust your , Claphams or others judgement on this, it is just that it is too big a rotten apple to crush as the smell is too much for people to take and it would bring too many people into the equation.Football does not want that.

There has been no question why Pompey appointed a new CEO, funny he was part of the FA in a great job, why leave tghat, unless he was sent to cover.

I feel sick of this and the way the media just brush it off as 'Oh Pompey owe 138m' no questions and then, 'and we feel sorry for the supporters'

Well I dont as they are donning their Wembley kit all on the back of being part of supporting a illegally trading business

 

 

Maybe HMRC wont turn down £7m, but all this means is that a prospective buyer now has to find even more money. No one is going to buy them with that much debt.

 

Chainari will carry on until he has got his money out and them just dump them. Then its bye bye cheating skates.

 

p.s If HMRC do except the CVA it will open the doors for others to follow suit. On that basis I really can't see them agreeing to it.

[bridge too far]

HMRC have only agreed that Android should work up a CVA proposal, haven't they?

 

They haven't actually agreed to a CVA because Android has only 'indicated' the percentage and the 5 year payment deal. He hasn't come up with a firm proposal, I don't think :smt102

[Frank's cousin]

Can someone explain the NEED to liquidate PCFC? If they agree a CVA they will in effect become debt free in five years (assuming that they dont ramp up more debt in a stupid attempt to stay in the CCC) - I am confused here (stupid?) but this bares all the hall marks of an attepmt to avoid something or other - smells bad...

[Chez]

Can someone explain the NEED to liquidate PCFC? If they agree a CVA they will in effect become debt free in five years (assuming that they dont ramp up more debt in a stupid attempt to stay in the CCC) - I am confused here (stupid?) but this bares all the hall marks of an attepmt to avoid something or other - smells bad...

 

one company liquidated only for a another company to take on the CVA repayment agreement. Very weird.

[fanimal]

And now that AA who is supposed to be an Administrator, says there will be no firesale of players in the summer - excuse me but what about selling assets to repay debts?? And how can you keep staff on paying high weekly salaries with no income to support them? What the hell is going on here??

[Glasgow_Saint]

And now that AA who is supposed to be an Administrator, says there will be no firesale of players in the summer - excuse me but what about selling assets to repay debts?? And how can you keep staff on paying high weekly salaries with no income to support them? What the hell is going on here??

 

That attitude will anger those that need to agree the CVA. If you're owed money would you accept 20p in the £1 and then watch/agree the company continue with all its assets still in tact? I would be furious.....I'd insist that anything worth money was sold so that people owed £'s are paid to a maximum.

[OldNick]

for a feeling of justice to be done, I myself cannot see any of that coming to pass yet.

Phil and others give me comfort some justice will be had, but at present it looks far from that at present.

[Wes Tender]

Not right according to this... guardian report on CVA meeting

 

Far be it for me to question what the Guardian says, but I have a strong feeling that GM is right and that the doubling of the debt (exactly) is more than a mere coincidence. Rather than it being money owed to them on taxes not paid on image rights, etc, surely it is far more realistically the 100% penalty imposed on them for not paying their tax debt.

[slickmick]

Can someone explain the NEED to liquidate PCFC? If they agree a CVA they will in effect become debt free in five years (assuming that they dont ramp up more debt in a stupid attempt to stay in the CCC) - I am confused here (stupid?) but this bares all the hall marks of an attepmt to avoid something or other - smells bad...

 

 

Know doubt on the instructions of previous or present owners.

[Doctoroncall]

Far be it for me to question what the Guardian says, but I have a strong feeling that GM is right and that the doubling of the debt (exactly) is more than a mere coincidence. Rather than it being money owed to them on taxes not paid on image rights, etc, surely it is far more realistically the 100% penalty imposed on them for not paying their tax debt.

 

and the times...Portsmouth able to avert another points penalty

 

The extra claim from Revenue & Customs is a serious matter. Andronikou said: “The HMRC debt went up from £17.5 million to £35 million. They have had a review of possible tax outstanding from player salaries or from image rights and they have made an assessment.”

 

 

I'll be happy if the HMRC want to impose a fine as well as asking for outstanding tax on top of the initial claim of £17.5m.

 

 

 

I'm getting to the impatient stage and want justice served, but what is more frustrating is there is no clear picture in all this:

 

I can potentially see point deductions coming their way akin to Luton's financial mismanagement, but it's no guarantee.

Some say liquidation of PCFC will trigger penalties - is that true? If so, why liquidate at all, especially as they will be CVA debt free after 5 years?

The CVA still has to be approved but assuming current figures owed are correct and CVA is approved, £55m needs to be paid.

What is AA basing the £25m income and is that projected over the term of the CVA or just the first year?

If the first two parachute payments are to be used to pay off the football creditors and the player sales to pay off Chainrai - where's the money coming from to run the club?

Edited 7 May, 2010 by Doctoroncall
Add questions

[anothersaintinsouthsea]

Looking at this afresh today I'm not convinced they will get a points deduction if this plan goes through. As I understood it, if a CVA was agreed before the deadline then you avoid the points penalty. That's what Pompey will be doing, if liquidating the old company is part of the CVA then why would they get a further punishment?

[Gingeletiss]

Just a point here, I'm sure the informed few will enlighten us all!

 

Chainrai has offered to pay all small unsecured debts of £2,500 or less i.e. charities etc. I thought that if any debts were settled in full, then all debts must be settled in full.

 

 

Answers!

[Doctoroncall]

Just a point here, I'm sure the informed few will enlighten us all!

 

Chainrai has offered to pay all small unsecured debts of £2,500 or less i.e. charities etc. I thought that if any debts were settled in full, then all debts must be settled in full.

 

 

Answers!

 

He can but PCFC cannot.

[Gingeletiss]

He can but PCFC cannot.

 

Got you, bets on this 'gift' finding it's way onto the books though!

[NickG]

Looking at this afresh today I'm not convinced they will get a points deduction if this plan goes through. As I understood it, if a CVA was agreed before the deadline then you avoid the points penalty. That's what Pompey will be doing, if liquidating the old company is part of the CVA then why would they get a further punishment?

 

my reading of it, they are getting away with it!