Watford avoids administration

English Watford has paid nearly GBP 5 million to Jimmy and Vince Russo and avoided the immediate danger of administration. The Russo brothers were the chairman and vice-chairman of the club until they resigned last week and they had demanded a repayment of the GBP 4.88 million they had made to Watford through their company Valley Grown Salads. When they rejected the current majority shareholder Lord Michael Ashcroft's GBP 7.5 million rights-issue package, administration seemed like a imminent possibility.

The Telegraph reports that Watford has released a statement about the payment having been made. "Watford Leisure announces that on December 21, 2009 Fordwat Limited paid approximately GBP 4.93million to Valley Grown Salads in full and final settlement of VGS' demand of 15 December 2009 for full repayment of approximately GBP 4.88million in loans previously made available to the Company. The sum of GBP 4.93million paid by Fordwat included accrued interest and a contribution to the legal fees of VGS (in accordance the loan agreement between VGS and the Company). In connection with the above payment, on December 21, 2009 Watford Leisure signed an agreement with Fordwat for a loan to the Company of approximately GBP 4.93million, repayable on demand and accruing interest at the rate of 4.5 per cent above the base rate of Barclays Bank plc (except in default when the rate rises to base rate plus 7.5 per cent). Furthermore, it is the understanding of both Watford Leisure and Fordwat that security over the Vicarage Road Stadium for the Fordwat Loan, replacing that of VGS, will be put in place in due course. The purpose of the Fordwat Loan was to prevent the company being placed in administration by VGS."