Coventry City to be Liquidated
August 2, 2013
Coventry City football club has gone into liquidation after Arena Coventry Limited (ACL) rejected proposals for the club to exit administration.
The crucial creditors’ meeting ended in ten minutes this morning and administrator Paul Appleton confirmed the Sky Blues’ move to liquidation.
ACL rejected Appleton’s Company Voluntary Arrangement (CVA) which would have bought the club out of administration, pills a position they have been in for a number of months after continued rent dispute with ACL.
A statement from the club read: “It is with great regret that a proposed Company Voluntary Agreement (CVA) has been rejected by Arena Coventry Limited (ACL).
“It means CCFC Ltd is likely to be put into liquidation which is expected to result in a points penalty for the club going into the new season.
“The football club and the Alan Higgs Centre Trust accepted the administrator’s CVA, impotent but the City Council, through ACL, have chosen to reject it – leading to possible liquidation and the risk of a 15-point deduction.
“The club will hold urgent meetings with the Football League this afternoon to go through the next steps for the football club.”
Appleton released his own statement after the outcome and said that “all parties except Arena Coventry Limited and HMRC accepted the CVA proposals.”
He continued: “At the meeting held on Tuesday, ACL had put forward modifications that were not compliant with the terms of the Insolvency Act and Rules. This was explained to both them and their legal representatives at the time.
“The adjournment provided them with an opportunity to put forward modifications that were compliant with the law in order to make use of the time made available by the adjournment that they themselves proposed.
“However, despite being given this further opportunity, they declined. Accordingly, when asked whether they were in favour or not of the Proposals, ACL confirmed their rejection.”
In response ACL commented: “ACL, jointly owned by the Alan Edward Higgs Charity and Coventry City Council, voted not to approve the Administrator’s proposals.
“This decision was based on ACL’s twin aims: first, to keep Coventry City Football Club playing in Coventry; and second, to ensure that Coventry City Football Club is financially viable for the next few years and beyond. This last point is especially important given that CCFC has been the subject of a ‘catastrophic insolvency’ in the hands of its previous owners.
“The CVA proposals put forward by Mr Appleton simply do not address these obvious concerns. And these concerns are not only the concerns of ACL – they are the concerns of all Sky Blues’ supporters, and should be the central concerns of both The Football League and The Football Association.
“Mr Appleton has the ability to put forward new proposals, and we would welcome these as soon as possible.”
Football League must take action
Supporters Direct, the organisation who promote the value of supporter community ownership at clubs, have been in constant contact with supporters’ group, the Sky Blue Trust, throughout the ordeal.
Speaking exclusively to iSportconnect, Kevin Rye from Supporters Direct urged the Football League to take action.
“We are in constant contact with the Sky Blue Trust over this matter, and are currently trying to ascertain what the League are intending to do,” said Rye.
“The eyes of the World are on The League as they make a decision which will be vital to the credibility of their role as a regulator at a time when the Government is threatening intervention should change not come from the governing bodies.”