Portsmouth creditors approve CVA deal

English Portsmouth creditors have approved a company voluntary arrangement (CVA) which will allow the club to come out of administration. This development allows the club's chief executive David Lampitt to move on with hiring a manager and he is said to be "currently negotiating a contract". Her Majesty's Revenue and Customs (HMRC) can potentially challenge the approval legally because it voted against the club's proposal to settle the outstanding debt at 20p to a pound over the next five years. The proposal was approved by 81.3 per cent of the creditors. There is a 28 day period during which parties can challenge the agreement or raise objections.

HMRC was allowed voting rights corresponding to a pending payment of GBP 24 million by the administrators. Revenue has claimed that it is owed GBP 37 million, and if it had been allowed enough votes to reflect that it would have had more than the 25 per cent required to block the CVA. HMRC has released a statement saying that, "HMRC notes that the result of today's vote was to accept the CVA proposals. HMRC stands by the full amount of its claim. We will now carefully consider our position following the decision to reduce the amount of our claim for voting purposes. HMRC believes the so‑called football creditors rule is unfair, unlawful and unacceptable. It cannot be right for millions of pounds worth of assets and income of Portsmouth FC to be earmarked for payment of football debts in full while other creditors – including the public purse – have been offered a mere 20p in the pound over five years."

It is seen as unlikely that HMRC will initiate a legal challenge. David Lampitt will assume day-to-day responsibilities for the club and report to the administrators. Chief administrator Andrew Andronikou has said, "We are now in a transitional period where we hand over the club's daily business more fully to David Lampitt." There is speculation that former Notts County manager Steve Coterill is the serious contender to replace previous manager Avram Grant.

Lampitt has told the club's website that, "This is a hugely significant day – I'm very pleased the vote has gone through. The deal reached between the administrators and the creditors provides us with the first step towards the rebuilding of the club. One of my tasks is to bring stability to the club so that it has a long-term future. This should make it a more attractive proposition for new investment. I believe this has to the best way to bring long-term success."