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totemowl

Portsmouth Parachute Payments

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Sky Sports News have been reporting they will get the £37M parachute payments from next season - the implication that they get them after they have come out of admin. It's though a deal has been done.

If so, if these facts do stand up, it seems fraudalent to me - against the creditors and against those teams, especially in the Championship, because it hands Portsmouth a huge financial advantage.

I don't think they will be allowed to come out of Admin until their debt is paid.

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How long could creditors draw the administration process out? I mean, would they be able to delay any resolution or CVA until the parachute payments start coming in? If not, then I'm not sure much can be done legally, the club will technically be a different entity post-admin.

I think the FL need to stand up the the PL here, if Pompey look like they can get away from this with ~£12m a season coming in and an easier route back to the PL, then the FL need to get their arses in gear and refuse them their "golden share", much as they did with Leeds disputed non-CVA last year. Clearly the PL don't give two shits.

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I would say it's highly unlikely that any creditor will vote in favour of a CVA where they will lose out on a lot of money knowing full well that parachute payments will be payable in the near future

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Absolutely no chance.

I hope you're right, because if they do receive parachute payments then it's bang out of order.

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Guest Walkley_Owl

TBH mate A B N G is bang out of order

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If they were to receive no parachute payments because instead - it was used to pay off there debts....

What if - for whatever reason they still managed promotion next season (longshot) and as there was no parachute payments to split throughout the league as it was accounted for, we & others would miss out?

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If they were to receive no parachute payments because instead - it was used to pay off there debts....

What if - for whatever reason they still managed promotion next season (longshot) and as there was no parachute payments to split throughout the league as it was accounted for, we & others would miss out?

I'm not sure the PL could use the parachute payments to pay off debts.

The only basis I can see the PL not giving them is that Pompey would be a different entity after administration, and so not entitled to them, in which case they'd presumably be split in the normal way.

I'm not sure they can withhold them entirely on the basis that they went into admin.

Interestingly, wasn't there a threat to Leeds of the FL not allowing them to compete if they began the season in admin? If creditors were wishing to drag this out until parachute payments were available, would that be long enough to cause a similar issue?

Either way, I don't think there's a particularly high chance of them leaving this with money in the bank, really. Between the creditors, the FL and the righteous indignation of Championship supporters, I'm sure they'll be prevented from starting the next season with the PP money.

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I think the main issue is that Pompey still have a circa £3m a month wage bill, even with parachute payments they will only be able to service the football related costs and debts (which must be settled 1st) so HMRC debts won't be settled and they won't be able to come out of admin via a CVA so will start next season on min -15 points.

Whichever way you look at it they are fooked, unless another dodgy billionaire turns up.

http://www.bbc.co.uk/blogs/mattslater/2010..._crisis_qa.html

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The sooner it comes down the better.

On this note - I would hope HMRC block the administration. Or at the minimum get some sort of agreement where the creditors get the parachute payments.

HMRC routinely objedct to CVA's that involve anything less than full payment of the Tax debt - which in effect is all of them.

Surely the parachute payments will go to creditors or not be paid at all. I thought if a club went into admin it became a new entity. Surely if its not liable for the old clubs debts it shouldnt benefit from the old clubs parachute payments.

If pompey do manage to go into admin but still get payments then a league wide boycott by fans should be called for. Dont give them any more cash. This will raise awareness of how people feel and put pressure on the FA etc.

Only becomes a new legal entity once someone actually purchases the club (ie Portsmouth Holdings 2010 etc)

To play in next seasons Championship the new club will require the "Golden Share" from the football league.

To obtain this the club must pay all outstanding football related debts in full, all non footballing debts, (HMRC included) must be agreed by way of a CVA. The HMRC will not except anything but full repayment of their debts, therefore, no CVA can be obtained.

Now the only way the new Portsmouth FC can obtain the "Golden Share" is via the FL's Exceptional circamstances rule. This will without doubt result in the new club starting next season on -15 points minimum.

Yes, to a point. However if HMRC's debt makes up less than 25% of the Overall debt, the rest of the Creditors can agree a CVA it can take effect no matter what HMRC says as once 75% of the Creditors have agreed, it becomes binding on the rest.

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Yes, to a point. However if HMRC's debt makes up less than 25% of the Overall debt, the rest of the Creditors can agree a CVA it can take effect no matter what HMRC says as once 75% of the Creditors have agreed, it becomes binding on the rest.

So it is key to all this exactly who all the Creditors are, what % they are owed, and what their stance is?

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HMRC must be more than 25% Portsmouth havn't paid VAT, PAYE or NI contributions for months.

On a £3million a month plus wagebill.

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Guest Walkley_Owl

Estimated they owe £18m to the tax man, total debts = £70m therefore just over the 25% threshold.

Also cannot see Gadaymak accepting a reduced settlement, fortunately he still owns the stadium

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who owns their ground? will they lose ownership?

one of the points often used against our taking this route is that we would lose our ground and in effect have to rent it back

^^^^^^^^^^^^^^

anyone ?

Yes, to a point. However if HMRC's debt makes up less than 25% of the Overall debt, the rest of the Creditors can agree a CVA it can take effect no matter what HMRC says as once 75% of the Creditors have agreed, it becomes binding on the rest.

From what little detail I've heard the total debt is massive - The percentage of HMRC's debt is clearly crucial. I'll still be amazed if the PL don't step in in some way.

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Guest Walkley_Owl

^^^^^^^^^^^^^^

anyone ?

see my above post

From what little detail I've heard the total debt is massive - The percentage of HMRC's debt is clearly crucial. I'll still be amazed if the PL don't step in in some way.

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Estimated they owe £18m to the tax man, total debts = £70m therefore just over the 25% threshold.

Also cannot see Gadaymak accepting a reduced settlement, fortunately he still owns the stadium

ta

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Estimated they owe £18m to the tax man, total debts = £70m therefore just over the 25% threshold.

Thought it was just over £13m? Mind you, that will be increasing all the time.

Also cannot see Gadaymak accepting a reduced settlement, fortunately he still owns the stadium

I suppose it depends what the deal is - he will have to weigh up if the return he gets via the CVA will be more than he would get if the club was liquidated.

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Estimated they owe £18m to the tax man, total debts = £70m therefore just over the 25% threshold.

Also cannot see Gadaymak accepting a reduced settlement, fortunately he still owns the stadium

If he's got the ground he may not be as desperate as other creditors. All he needs to do is rent it back to the club, at say £1-2M a season. This happens - Stockport is an example of the sort of deal that could be struck (though this eventually sent Stockport back in to admin).

This is also one of the reasons why we are better off paying the interest on the debt than going into admin or selling the ground.

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To play in next seasons Championship the new club will require the "Golden Share" from the football league.

To obtain this the club must pay all outstanding football related debts in full, all non footballing debts, (HMRC included) must be agreed by way of a CVA. The HMRC will not except anything but full repayment of their debts, therefore, no CVA can be obtained.Now the only way the new Portsmouth FC can obtain the "Golden Share" is via the FL's Exceptional circamstances rule. This will without doubt result in the new club starting next season on -15 points minimum.

Heard the other day the reason the HMRC are playing hard ball and trying to get clubs wound up is because of the preferential creditors rating for players,basically when a club goes into admin the players are guaranteed to get paid in full. All other creditors HMRC included then have to join the queue to get paid whats left. In the case of Portsmouth around £1.1 million of the 11 owed.

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