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Football League sets standard for CVAs
England - 08 May, 2008
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England's Football League has set what it hopes will be an unchallenged standard — clubs that exit insolvency without a Company Voluntary Arrangement will be deducted 25 points.
The league mandated that clubs also have a settlement that is accepted by three-quarters of the creditors.
The new ruling is in place after Leeds United challenged — but lost — its bid to overturn a 15-point penalty after leaving administration without the CVA.
It has become an issue more of late with HM Revenue & Customs usually voting against CVAs. That becomes a major issue when the government often is a leading creditor among clubs.
It could be termed the "Leeds Rule." A three-man arbitration panel upheld Leeds' penalty. The club had agreed to accept the penalty upon leaving insolvency without the CVA in place. Later, they decided to challenge.
The league mandated that clubs also have a settlement that is accepted by three-quarters of the creditors.
The new ruling is in place after Leeds United challenged — but lost — its bid to overturn a 15-point penalty after leaving administration without the CVA.
It has become an issue more of late with HM Revenue & Customs usually voting against CVAs. That becomes a major issue when the government often is a leading creditor among clubs.
It could be termed the "Leeds Rule." A three-man arbitration panel upheld Leeds' penalty. The club had agreed to accept the penalty upon leaving insolvency without the CVA in place. Later, they decided to challenge.
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