The interior design company belonging to Notts County owner Alan Hardy has gone into administration. Reports from both Sky Sports and BBC Sport state that Paragon Interiors Group has had to bring in Leonard Curtis Recovery to act as the administrators for the business, who will decide what future it has. Earlier this week, Hardy emailed Paragon employees warning them that the company payroll would not be paid on time, although he did not allude to any risk of administration at that time.
At present, there is no immediate impact on Notts County. Leonard Curtis Recovery will take over the running of Paragon, and will also attempt to maximise returns for Paragon's creditors, potentially by calling in debts, or by selling it on as a going concern. Where this may end up affecting Notts County will be if the administrator decides that requesting the repayment of a £7 million debt lodged against the Magpies is in the interests of the creditors. This amount is reported to have been used by Hardy to purchase Notts County, as well as providing some funding for them. That was fine whilst Hardy remained Paragon's owner, but with that company now out of his control, the contractual terms of that loan (if any) will apply.
If Paragon's administrators do call in the £7 million debt, then unless Notts County can quickly find new owners who can quickly pay off that debt, then the end result would be a chain reaction, where County themselves would end up calling in the administrators. Hardy has claimed that Paragon's problems would not affect his football club, but unless the recall of that debt is prevented by a contract between both parties, then that may not be under his control.
Paragon's financial problems will not fall foul of any Football League rules on administration, as the two companies are operationally independent. However, if the problems spread to Notts County, then the League's rules regarding an automatic 12 point deductions would apply.
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