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Majority of creditors agree to deal with Rotherham United
England - 09 May, 2006
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League One club Rotherham United will not face liquidation, but chances are they will start next season at a 10-point disadvantage.
The clubs board announced that the Company Voluntary Arrangement (CVA) has been accepted at a meeting by a majority of the club’s creditors, roughly 79 percent.
“We are pleased to announce that the CVA has been accepted,” said Jeremy Blizzard of XL Business Solutions Ltd. “All the creditors were given the opportunity either to accept or modify the arrangement that was put forward by the Directors on the 18th April to restructure the finances of the club. Some modifications were put forward (at) the meeting and these were duly accepted. We wrote to 200 creditors and the arrangement is binding.
Blizzard explained that, with the terms, a new company will be formed and it will purchase the assets of the old company. They will go to The Football League and the Football Association and try to have the shares transferred from the old company to the new one. The new company can trade at that time, but under the terms of the proposal, the old company will continue to trade for around six to eight weeks until the share is transferred from the association and the league.
“This is a major step and shows we have security of tenure for ten years with the landlord and we are hopeful that we can conclude in the future,” Blizzard said.
The new company will pay sufficiently to enable creditors to be paid a penny to the pound, and that total claim will have to be paid by the new company. The total due creditors is roughly GBP 3.7 million of which GBP 2.95 million-worth accepted the proposal, equaling approximately 50 creditors.
“Under Football League rules, normal trade creditors try to save the club and this has happened here,” said David Hinchliffe of advisers Walker Morris.
The club faces a ten-points deduction next season, although they are considering an appeal against that. Rotherham United chairman Denis Coleman said, “I would like to put it on record to thank everyone who has helped the club through this difficult period, especially the supporters and creditors from local businesses who have been very patient. Without the help of Walker Morris we wouldn't have known which road to go down, it's been hard but we have got there. We have some good business plans and now we need the backing of the supporters as every penny counts.”
The clubs board announced that the Company Voluntary Arrangement (CVA) has been accepted at a meeting by a majority of the club’s creditors, roughly 79 percent.
“We are pleased to announce that the CVA has been accepted,” said Jeremy Blizzard of XL Business Solutions Ltd. “All the creditors were given the opportunity either to accept or modify the arrangement that was put forward by the Directors on the 18th April to restructure the finances of the club. Some modifications were put forward (at) the meeting and these were duly accepted. We wrote to 200 creditors and the arrangement is binding.
Blizzard explained that, with the terms, a new company will be formed and it will purchase the assets of the old company. They will go to The Football League and the Football Association and try to have the shares transferred from the old company to the new one. The new company can trade at that time, but under the terms of the proposal, the old company will continue to trade for around six to eight weeks until the share is transferred from the association and the league.
“This is a major step and shows we have security of tenure for ten years with the landlord and we are hopeful that we can conclude in the future,” Blizzard said.
The new company will pay sufficiently to enable creditors to be paid a penny to the pound, and that total claim will have to be paid by the new company. The total due creditors is roughly GBP 3.7 million of which GBP 2.95 million-worth accepted the proposal, equaling approximately 50 creditors.
“Under Football League rules, normal trade creditors try to save the club and this has happened here,” said David Hinchliffe of advisers Walker Morris.
The club faces a ten-points deduction next season, although they are considering an appeal against that. Rotherham United chairman Denis Coleman said, “I would like to put it on record to thank everyone who has helped the club through this difficult period, especially the supporters and creditors from local businesses who have been very patient. Without the help of Walker Morris we wouldn't have known which road to go down, it's been hard but we have got there. We have some good business plans and now we need the backing of the supporters as every penny counts.”
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