League One side Portsmouth have admitted that they are still in a position where they cannot guarantee starting the 2012-13 season. Currently in administration, they are in theory going through an agreed CVA process with former owner Balram Chainrai having 28 days to finalise his arrangements through his company Portpin.
The fly in the ointment, which was known about at the time of the CVA being agreed, is that Chainrai was highly unlikely to take back control of the club whilst their player wage bill was so high, and so the 28 day process would end up not being followed through. With administrator Trevor Birch attempting to off-load their high earners, the Portsmouth News yesterday indicated that the annual wage bill had been brought down to £8 million but previous reports had suggested they needed to reduce that by a further three million for Chainrai or Portsmouth Supporters Trust - who are also waiting in the wings - to make their final move.
At the time the CVA was agreed, the implication was that deadline day was at the end of the 28 day period - July 23rd - although that date appears to have disappeared off the radar suggesting that Birch will allow further time beyond that time. However, he has warned that with nine days having passed since the last player came off their books, that time is running out:
"We are just not making quick progress and at this moment in time I am doubtful we will start the season. We are at a stalemate and that is why the start of the season has to be in jeopardy. We are having trouble with more or less all the players. A lot of them are not prepared to take any compromise deal over a period of time. They want (the wages owed to them) straight up and not over the time period I am suggesting which is four years and written into the CVA. I think there is an element of putting their head in the sand believing all of it will go away. Portpin will not complete a deal while the players are still there – neither will the Trust. If nothing can be done liquidation starts to loom again very strongly."
Even though there is a strong possibility that Pompey may not exist by the start of the season, the club are also attempting to set up a pressure group of club creditors in an attempt to lobby the Football League. The Hampshire club have put out a statement asking for creditors of the company that collapsed in February 2010 with debts of £138 million to contact them - something that is a little surprising given that the CVA that was put in place to pay creditors as a result of that administration should mean they have their full details already.
Having since collapsed a second time, clocking up a total of £58 million worth of debt, the Football League have made it clear that any prospective owners would have to accept a 10 point penalty due to the creditors from the 2010 CVA not having received any payments before the second company collapsed.
In their statement, the Football League identified two reasons for proposing that penalty - one was that of ensuring "sporting competition between clubs" whilst the other was that the creditors of the 2010 company were now standing to receive "less than one penny in the pound, without having the opportunity to indicate their satisfaction" - despite having voted to receive 20 pence in the pound back in 2010.
Pompey's response has been to ask those 2010 creditors to write to them, to see if they are willing to support the 2012 proposals and on the basis of a consensus will try to get the points deduction withdrawn:
"We need (to) contact all 2010 creditors, inviting you to decide whether you are in favour of or opposed to the latest CVA proposal approved in June 2012 in order that we can lobby The Football League to withdraw the 10 point deduction."
The likely flaw in Pompey's argument is that the process of setting up a CVA is to ensure that a proportion of the old company's debts are honoured when league membership is transferred over to the new company. If it later transpires that those debts aren't going to be honoured, then the 2010 CVA effectively becomes null and void. This is consistent with the League's handling of Rotherham United, who were given a 17 point deduction in 2008 after going into administration twice in three years.
Meanwhile Pompey trialist striker (and former Glovers trialist) Izale McLeod has confirmed that he will be putting pen to paper, just as soon as they are authorised to sign players by the Football League. They currently have in the region of eleven 'trialists' spending ten days in Spain - former Glover Luke Rodgers is another familiar name they have recruited in, and it appears a few of those present are on pre-contract agreements. McLeod denies he has any other fall-back options in place at present:
"I’ve had to be patient but everything is more or less sorted out now. I am just waiting for the club to sort itself out. I have always known right from the start this is the main place I wanted to come. I am not going to name other clubs who have come in because I have decided I am Pompey. But there have been a few clubs, a couple of League One and a few from League Two. As soon as the embargo gets lifted I am good to go. At no time have I thought about going elsewhere. I am sure we will see floods of players coming in when the Football League give the go-ahead. Sooner rather than later, hopefully."
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