Trust move to deny funding links

Portsmouth Supporters Trust Spokesman Colin Farmery yesterday moved quickly to deny any involvement of funding from businessmen Colin Hill or Keith Cousins as their bid to take over the ailing League One football club Portsmouth nears its conclusion. The denial will come as a relief to the clubs supporters who’ve seen a long list of undesirables attached to their club in what has been a turbulent period in their history on and off the field.

Calls have been made by fans for more transparency in all areas and the latest rumours follow on the back of moves by rival bidder Keith Harris to try and destabilise the supporters trust bid. The linking of the names Hill and Cousins could be considered to be another desperate attempt to derail the bid as it reaches its last hurdle although there are no direct suggestions that they have come from the Harris camp.

Given the importance of Property Developer Stuart Robinson to the supporters trusts bid the tale of fellow property developer Colin Hill and his involvement in football should serve as a warning to football clubs.

Championship side Peterborough United was sold in 2003 to Wetmore Foundation, a company registered in Liechtenstein. Much was made that the sale had meant the club had been saved from the hands of property developers but it soon transpired that the club had been sold to Colin Hill. Within a few months the club and the ground had been separated with Barry Fry taking over the club and the Wetmore Foundation retaining the London Road ground before transferring it to another company Peterborough United Holdings Ltd for a stated price of £3.5 million. Fry defended the decision saying "Colin Hill is a shrewd businessman and he didn't want the football club because he said it would always lose money. I'm a football person, so I took it on."

In 2006 the holding company owned by Wetmore submitted a planning application to build 96 two-bedroom and 39 one-bedroom flats on land behind the away end which had been owned by the club. Estimations at that time put the potential value of the deal at a potential £18 million with all profit going to Wetmore except for the cost of a 2,000 seat stand which was promised in the planning application. Whilst those types of numbers would have been good for the developers, the finances of the club had continued to suffer as they posted losses of £4.8 million with almost £1 million being loaned to the club by its Directors.

In 2010 a deal was signed to buy the London Road ground and surrounding land by Peterborough City Council. The total cost of acquiring the site including legal fees and stamp duty stood at £8.65 million. Whilst the numbers weren’t as high as the estimates of 2006, the deal will still have represented good business to Peterborough United Holdings Ltd and to Colin Hill on the original sum paid for the land.

At the time of writing Peterborough United lay second bottom in the Championship.

In 2006 Rushden and Diamonds avoided going into administration after being brought by the former Peterborough United vice-chairman Keith Cousins. At that point they had been facing relegation from the Conference. Formed by merging Rushden Town and Irthlingborough Diamonds the club funded by previous owner Max Griggs had won promotion to the football league and had risen as high as League One. Alongside winning promotions Griggs had provided the club with a modern stadium and excellent supporting facilities alongside the River Nene in Irthlingborough.

The problems for Rushden and Diamonds began when Griggs’ Doc Martens business ran into increasing trouble. He tried to sell the club for eighteen months but couldn’t find a bidder. Eventually Griggs handed over the club and most of its accompanying facilities to a community trust. Furthermore his generosity continued as he provided the trust with £750,000 over two years to help them get started although this in fact only managed to keep the club going for a further six months.

The trust successfully reduced the inherited annual operating losses of £1.5 million but was still losing in the region of £600,000 a year. Had they not have taken over when they did the club would have folded at the end of the 2004 / 05 season. The chair of the Rushden and Diamonds Society, Paul Hadjuk, admitted, 'I think everyone is aware that running a football club requires more financial backing than the Trust could afford to commit.'

Facing certain closure the Trust looked for potential investors, which is where Keith Cousins came into the equation with funding coming from Colin Hill. Eventually Cousins would resign from the club and in June 2011 Rushden and Diamonds were expelled from the Conference with debts of round £750,000 and faced a winding up hearing. In July 2011 the club entered administration with the administrator citing they were no longer “in a position to continue trading.” An appeal against Conference expulsion was withdrawn and the club had been refused entry to the Southern League.

Ex Rushden and Diamonds player Leon Knight used his Twitter account to let his feelings known about the club and its owners at the time;

Im gonna be going wild on twitter all day FUCK RUSHDEN & DIAMONDS the crooks 

For those who don't know Colin Hill he's the funder of Rushden and Diamonds he's the biggest crook EVER!!!!!!! 

Colin Hill turned up in the changing room and gave a team talk hahahahah what has he got anything to do with Rushden?

Knight also alleged that Cousins and Hill threatened him with physical violence as the relationship between club and player broke down spectacularly during his turbulent time with the club which saw him being sacked just four months into his deal due to alleged continual breaches of the agreement. Rushden retained the player’s rights meaning Knight was unable to register with another FA Club and he was forced to play abroad for the next two seasons.

Rushden and Diamonds were formally dissolved in 2011 but Cousins and Hills story continued with Nene Park as the ground became the home of Kettering Town, although that deal came to an end when Kettering were forced to switch their games to Corby Towns Steel Park because Nene Park has no electricity. Whilst Corby Town are charging £1,000 per game for the privilege of ground sharing Steel Park, it was confirmed in the CVA document filed during Kettering Town's administration last summer that they were paying an annual rent of £150,000 for the use of Nene Park. Latterly it has been suggested that the ground could be used to host Coventry City’s home games as they struggle with finances and the rent demands placed upon them from the owners of the Ricoh Arena.

The debenture over Nene Park is held by Conalgen Enterprises SA, incorporated in Panama. In 2009 applications were made to the Council of the District of East Northamptonshire and Northamptonshire County Council to erect a hotel and associated parking. Previous owner Max Griggs had included certain stipulations in the sale contract about anyone looking to take over Rushden and Diamonds at the time of the transfer to the Trust to try and safeguard the future of the club. These stipulations are believed to run out in 2015 and whilst the exact details aren’t known of the deal they are said to be centered round a covenant running with the land. Such a deal can impose duties or restrictions upon the use of that land regardless of the owner.

To complete the story of caution in regards to Colin Hill, Sheffield based newspaper The Star ran a story in November 2010 in which the Multi-millionaire property developer was labelled a fraud by a judge in 2009 after an old woman was nearly cheated out of her home. At the time Hill was said to backing Rotherham businessman Spencer Fearn’s bid to buy Sheffield Wednesday.

So from being labelled a fraud by a judge to a crook by an ex-employee the name of Colin Hill isn’t one that the Portsmouth Supporters Trust will have welcomed in association with their bid. Together Hill’s and Cousin’s records of involvement directly in football clubs or via business dealings through property haven’t turned out well for the clubs involved, although the businessmen don’t seem to have done too badly from the deals in comparison. From debentures to city councils the lessons are there to all to be learned from. I’m sure the Portsmouth Supporters Trust will be looking to avoid any such mistakes moving forward.

Portsmouth fans and football fans alike can donate money to help the Portsmouth Supporters Trust at http://www.pompeys12thman.co.uk

Threat of liquidation remains as Portsmouth FC (2010) Ltd creditors react to Football Leagues decision

February 10^th marks one week short of the one year anniversary since the appointment of Trevor Birch, Bryan Jackson and Ian Gould of accountancy firm PKF (UK) LLP as administrators of Portsmouth Football Club (2010) Ltd. Commenting on the case at the time of appointment Trevor Birch said “Our aim is to achieve an outcome that helps ensure the club’s long term survival, preferably by finding a suitable buyer.” Whilst that may have been their outlining aim going into the process as an administrator appointed by the High Court, first and foremost their duty is to provide the best deal possible for the creditors of the business. The fact that the business also happens to be a football club with a loyal support of tens of thousands of fans is sadly irrelevant in the eyes of the law. A football club is a business just like any other and has a duty to make sure it pays its creditors on time.

Birch et al set about that process by attempting to enter into a Company Voluntary Arrangement (CVA). For a CVA to be passed it must be approved by creditors who are owed at least 75% of the debt. Without the 75% vote the company faces voluntary liquidation. It is these creditors that the process of the CVA is built around; the possible continuation of the business only exists if it can be proven that by doing so it will provide them with a better financial return on monies owed to them. 

What is an unsecured creditor?

Contact Law defines them as such;

An unsecured creditor is a creditor who does not have security for their loan to a company. On liquidation of a company, the liquidator must follow a statutory order of payment when distributing the assets of the company. This statutory order of payment means that lenders with security for their loan, in the form of fixed or floating charges, and preferential creditors, will all get paid before unsecured creditors. While preferential creditors are a type of unsecured creditor, preferential creditors are paid before other unsecured creditors. On liquidation, a creditor solicitor can help with claiming money owed to an unsecured creditor and can also advise a company as to whom their unsecured creditors are.

It is unusual in a compulsory or Creditors' Voluntary Liquidation for unsecured creditors to be paid in full. Usually they will be paid a proportion of the money owed to them, for example, 80p for every £1 owed. As a result of their position in the statutory order of payment, an unsecured creditor will often lose money on their original investment. If you are an unsecured creditor who has not received payment in accordance with the terms of your loan, an insolvency expert can assist with applying for liquidation of a company. It is worth noting that the person applying for the liquidation of a company receives no benefit for doing so and will receive payment in accordance with the statutory order of payment.

On February 7^th the Football League announced that a bid to buy the ailing football club by football financier Keith Harris had been rejected and that the Football League would not accept any new bids. Furthermore they made announcement that "In the event the PST bid does not succeed and Portsmouth do not exit administration before the end of the current playing season, the club will lose its membership of the Football League."

Portsmouth's administrator Trevor Birch said: "We note the Football League board's statement and will consider its implications."

What exactly are those implications and what are the possible ramifications for the football club?

It might sound to obvious a point to state but if the football club loses its membership from the Football League then liquidation is the most likely outcome. Whilst the news of the Football Leagues decision was warmly greeted by the Portsmouth Supporters Trust who had previously been named as preferential bidders by the administrators, it’s worth considering why despite this fact, that PKF had approached the Football League with the offer made by Keith Harris in the first place last week. The answer lies in the deal being offered to the creditors which as I’ve already mentioned above is the primary concern of the administrator; to ensure that they are given the best possible financial resolve on monies outstanding to them. The deal offered by the Supporters Trust is said to be 2p in the £1 whilst the Harris offer was 3p in the £1. Whilst on paper a penny might not seem that much difference, when taken in the context of the total debt outstanding by the business it equates into a figure of hundreds of thousands of pounds extra that has been offered to be paid to these unsecured creditors. By law it didn’t matter that the administrator had already agreed to treat the Supporters Trust as preferred bidders, its obligation is still for them to obtain the best deal possible for creditors despite any agreements they might have already entered into with other parties such as the Supporters Trust.

In January PKF were granted an extension by the High Court until August in which to attempt to allow the company to remain trading and exit administration via the use of a CVA. Having been charged by law, by the High Court upon entering administration to represent the needs of the creditors the implications for the administrator are quite considerable given the statement made by the Football League and the factor that the Harris bid has offered better terms for the creditors. PKF cannot simply shrug their shoulders and ignore the job with which they’ve been charged by law to do.

It should come as no surprise that the creditors haven’t taken to the news as well as the Supporters Trust have following on from the Football Leagues decision. It’s also important to point out at this juncture part of the definition of an unsecured creditor as given above, namely; this statutory order of payment means that lenders with security for their loan, in the form of fixed or floating charges, and preferential creditors, will all get paid before unsecured creditors. One of the issues brought up at the High Court recently was the floating charge held by previous owners Portpin Ltd who had been attempting to take over the club in a rival bid to the Supporters Trust.

The failure of the Football League to consider the deal offered by Keith Harris carries with it a very real threat of the club going into liquidation and shouldn’t be seen as a smooth transition towards new club ownership by The Supporters Trust and being able to exit administration. This isn’t simply the case of keeping a football club from going out of business; this is a requirement of law for the administrators PKF to provide the creditors with the best deal possible on the money that they are owed. The Football Leagues belief that a new bid wouldn’t be able to be completed by the deadline provided by them doesn’t stop the decision from being challenged and there’s good cause to believe that will happen in the very near future.

Information has been passed on detailing the creditors concerns over the Football Leagues apparent stance to only consider the Portsmouth Supporters Trust bid and not the Keith Harris bid. These concerns are repeated in full here in good faith for the benefit of all the clubs fans in an attempt to show that the club remains in a very real threat of being liquidated. It should not be seen as an attack on the Supporters Trust who have worked tirelessly in an attempt to allow the club to remain trading and be able to exit administration via a CVA. It is also not a propaganda tool passed on by Portpin Ltd who I hasten to add I have never had any contact with. It is replicated as stated for the benefit of all the clubs fans in an attempt to highlight the possible danger that the club could be liquidated come the end of the season.

"We are very concerned about this latest development which appears to fly in the face of the football leagues' own insolvency policy. The decision appears to have been based upon a lack of information regarding the readiness to complete of the Keith Harris bid, the legal uncertainty regarding the legal case (which the PST bid is conditional upon) but hopefully not just a weariness with the Portsmouth case as the creditors and the fans deserve more than that.

Keith Harris' bid has been the subject of full due diligence which has been carried out over the last few months. They have fully satisfied the administrators regarding proof of funds.  They have agreed all documentation for the purchase from the administrators and all paperwork with the PFA. The only bit required to complete is the Football League consent.  It is our understanding that the Harris bid could be completed within a matter of seven to ten days.

Perhaps more importantly, this new bid has the support of all members of the creditors committee including the PFA and HMRC. This is because the bid is not conditional upon a very flimsy court case that is highly unlikely to succeed and impossible to complete in time to obtain FL approval. This is because the Court case contains major issues of public policy which will clearly involve appeals to the highest level.  It is this very court case that was forced into an adjournment literally on the court steps in December after the company seeking to acquire Fratton Park pulled out at the last minute on its commitment to fund the purchase.  The PST bid has not evidenced to the satisfaction of the creditors how this would be funded.  It is this funding uncertainty of the PST bid that is the main reason for the multiple adjournments of the court case.

As creditors, we have been told that the individual high-net worth backers of the PST bid had agreed to fund the legal costs of the court case itself as well as cover the operating losses incurred by the club during the court process.  This is a material worry for creditors to the club.  If the PST bid is already struggling to raise sufficient capital for the purchase and now must fund what is expected be a lengthy and costly court battle, there are serious concerns on the depth and commitment of financial reserves those backers.  It is important to note that the 14th February court date is only a scheduling hearing. In all likelihood, the court will not hear the case for before mid-March.  Further, one must consider the potential of appeal on any outcome.  This would only serve to further deplete the financial resources if both the club and the PST bid.

As presented and approved by the creditors, the Keith Harris bid could provide up to a million pounds return to creditors and fully comply with the CVA. The PST bid cannot comply with the CVA and will produce a much lower return to creditors because under the PST bid the majority of the money will go to Portpin.

We have been informed that the PST stormed out of a meeting with PKF when they were told that PKF and the creditors were to accept the Keith Harris bid.  The press reports from Keith Harris make it clear that he also wants to offer ownership in some format to the fans.  The PST ownership structure provides for 90 per cent of shares to be held by 5 or 6 individuals and the rest by the fans. It is these fans that should be voicing their concerns over the real intentions of the 5 or 6 individuals who seem to be happy with the FL statement of "PST or bust". A true fan would want the club saved by proper owners as Keith Harris clearly is.

If the FL fail to change their mind and the club is liquidated, everyone - including creditors, fans, staff, and players - lose out.  We understand that certain creditors may be considering legal action against the FL

Damaging revelations continue for ex Portsmouth FC owner Balram Chanrai

In a bad week for public relations it’s reported that the Nepalese businessman Balram Chanrai has been forced into hiding after a series of highly damaging revelations entered the public domain. Twitter’s information Security Director Bob Lord was today forced into an apology after it emerged the controversial ex-Portsmouth Football Club owner may have been behind an attack which saw 250,000 users’ passwords stolen, as well as usernames, emails and other data. As yet unconfirmed reports suggest that Chanrai was trying to gain access to the account of club fan Mike Hall. Chanrai was sadly unavailable for comment.

On a day of unprecedented bad publicity we take a closer look at some of the stories making today’s headlines from around the world.

Oprah Winfrey earlier today admitted that in scenes cut from her two part interview with disgraced cyclist Lance Armstrong that he had confided in her that it was Balram Chanrai and not controversial trainer Michele Ferrari that had convinced the seven times Tour De France winner that doping was the answer to secure his now stripped titles.  Chanrai was again sadly unavailable for comment.

West Bromwich Albion player Peter Odemwingie has given an exclusive interview to tomorrows Sunday Times in which he says he feels badly let down by his new advisor Balram Chanrai. Embarrassing scenes saw him locked out of Queens Park Rangers’ Loftus Road Ground on transfer deadline day as he tried to secure a move away from the Midlands Club. Chanrai was unavailable for comment.

South Korean songwriter, singer and rapper Psy has given an emotional interview to American blogger and television personality Perez Hilton admitting that he hadn’t sung on the worldwide smash hit Gangham Style. The vocals were recorded by a little known Nepalese born businessman by the name of Balram Chanrai. Sadly for Hilton fans Chanrai was unavailable for comment.

Former HMV Chiefs have blamed the collapse of their high street chain on the digital download success of last year’s biggest hit Gangham Style. Chiefs said there was no way of competing with the competition and success that companies like Apple’s iTunes had gained from the total numbers of sales from downloads compared to hard copy sales. “People don’t want to admit that they’re actually buying a record that is so bad. Today’s consumers can download these tracks in seconds without anyone seeing them buying it and claim to their friends and family that they weren’t one of the millions who brought the track or watched the video on YouTube.” HMV’s problems were confounded after South Korean singer / songwriter Psy admitted that it was a little known Nepalese born businessman by the name of Balram Chanrai who had actually sung on the track. Ex HMV CEO Trevor Moore was said to have banged his head against the wall of his country home for a full 12 minutes before finally collapsing. We have been unable to reach Mr Chanrai for a comment at this time.

Sebastien Coe, Chairman of the British Olympic Association announced the end of their investigation into the ticketing fiasco that gripped the early days of last summer’s London 2012 Olympic Games. Findings have concluded that the empty seats witnessed at many events were down to allocations given to a range of companies all owned by Hong Kong businessman Balram Chanrai. Coe has passed on the details of the findings to Brazils Olympic Committee ahead of the 2016 Games. Chanrai was unavailable for comment on the matter.

Following the highly damaging story about horse meat being discovered in burgers being sold within their supermarkets, Tim Smith, Tesco's Group Technical Director has told reporters “We now understand - with as much certainty as possible – what happened. The evidence tells us that our frozen burger supplier, Silvercrest, used meat in our products that did not come from the list of approved suppliers we gave them.” An investigation by the Ministry of Agriculture in Ireland has found that the source of the horse meat was a supplier in Poland. Those investigations have suggested the company is owned by the ex-Portsmouth FC owner Balram Chanrai. The Hong Kong based businessman has so far been unavailable for comment.

*The contents of this post are of course completely fabricated and should not be taken in the slightest bit seriously