Insolvency expert warns Northampton Town fans of challenges faced by club

editorial image
17
Have your say

An insolvency expert has warned Northampton Town fans that football clubs “rarely come back” from winding up petitions.

Further misery was heaped on Cobblers fans this morning with the news the tax collector had lodged a petition to cease the League Two side trading.

The HMRC claims to be owed a five-figure sum in unpaid taxes from Cobblers and will take the club to the High Court on November 16 unless payment is received. Chairman David Cardoza said the missed payment was as a result of the delays in the takeover talks. He has stated that he expects the matter to be resolved by the end of next week.

Corporate lawyer and insolvency specialist Guy Thomas, of Luton-based Taylor Walton Solicitors, says it is rare for a company in this position to avoid going administration.

He said: “It’s very rare for any company to not proceed into formal insolvency from this point. It does happen, but it’s very rare.

“As soon as it is advertised, any creditor can say they want to be added to that petition. Often it is a means of practicality to proceed to going into administration.”

Mr Thomas, who also spoke to the BBC Radio Northampton earlier today, said the winding up petition also complicates any possible takeover plan as corporate law prevents the club from being sold as “Northampton Town Football Club Limited”.

However he said it is possible for investors to buy shares in the club.

Mr Thomas said the HMRC regularly lodges winding up petitions with sports clubs, as any check on the London Gazette website will show.

He said: “As soon as a petition is advertised, it is 99 percent sure the bank will freeze the bank account.

“The reason a bank does that is to protect itself from any criticism in the long run. If it doesn’t, people will say ‘why did you allow the business continue to spend all the money’?”

Mr Thomas said personnel can be paid at companies going through a winding up petition through other bank accounts, with the bill for doing so listed in the club’s creditors.

It is understood there has been no issue in terms of wages with players, coaches and staff all being paid throughout.

Chairman David Cardoza has also been contacted for further comment today but has not been available.

The club issued a statement earlier today.

It said: “The HMRC debt is a temporary issue due to the delays in completing the takeover and during this interim period the club not receiving the investment that it needs to meet all of its commitments when they fall due.

“The club’s Chairman David Cardoza has been in talks with HMRC to resolve this matter and has advised that after discussions he put a proposal to HMRC late on Wednesday to head off these proceedings.

“This proposal was too late to prevent the proceedings being published, but the Chairman fully expects the matter to be resolved by the end of next week.”

Regarding the sale of the club, Mr Cardoza said, “Meetings have and are continuing this week and we are very close to reaching an agreement on the sale of the club to one of a number of interested parties and we believe we will have some definite news very soon. The potential purchasers are well aware of all the issues, including the HMRC discussions.

“We are putting proposals to Northampton Borough Council regarding the repayment of the loan which we hope will prove satisfactory to them and that process is ongoing as we speak.

“I fully appreciate that, off the pitch, there only seems to be bad news for supporters at the moment but we are working towards, and we believe we are close to, a conclusion on all matters that tidies up all of the issues surrounding the club and allows it to move forward to a much brighter future.”

Meanwhile Northampton Borough Council has requested an urgent meeting with the HMRC to discuss the winding up petition lodged against Cobblers,

The council will then decide how it recovers the £10.25 million it is owed from the football club.

The deadline for paying that money back was today, though as of around 5.15pm there was no report of the debt being cleared.