Football Administrations - Plymouth Argyle FC a lesson learned?

The Administrators of Plymouth Argyle Football Club (Plymouth) recently announced that they would accept a 50% deduction in fees to enable a sale that would save the club. The club was ultimately sold to James Brent’s Green Pilgrim Limited.

Brendan Guilfoyle, of the P&A Partnership, has had considerable experience of football administrations (including both Crystal Palace FC and Leeds) however with the experienced football administrator willing to accept a significant reduction on fees this may send out a warning to those considering accepting an appointment of a football club.
 
The P&A Partnership offered to accept half of its fees for the administration and offered to supervise the company voluntary arrangement for free. However Akkeron, James Brent company, issued a public statement stating that Green Pilgrim had made a final offer to the administrators reported to be to pay 20% of their professional fees.
 
Ultimately a deal was agreed which led to the P&A recovering some of their fees, whereas should a sale of not concluded they may have been forced to liquidate the club with no recovery of their fees.

The administrators fees were one of a number of issues and problems that they dealt with including HMRC voting against the CVA and their staff receiving threatening emails from fans who believed that the administrators had “backed the wrong horse” by trying to sell the club to Bishop International Limited; who it transpired did not have sufficient funds to complete the deal.

The lesson to administrators is clear – do not accept an administration of a club unless you have secured funding and you have detailed plans of how the club will exit administration. Administrators can no longer risk accepting an administration and trading the club by asking the players to defer wages in the hope that a “white knight” will purchase the club with an unlimited amount of money.

To fund the administration the administrator will need sufficient monies, with the recent tactic being to accept a payment for exclusivity – a tactic that Guilfoyle utilised with a purchaser that subsequently had insufficient monies to do the deal. Clearly purchasers are becoming difficult to find, especially purchasers who are willing to fund the administrators trading.

In light of the difficulties faced by the P&A and the opposition to CVAs by HMRC administrators should now be wary in accepting such an appointment.

For further information or advice, please contact one of our sports law specialists below.

Call Mark Hovell on 0161 234 8810 or send an email

Call Matthew Chantler on 0161 234 8719 or send an email