Administrators for Hearts football club, BDO, have announced a creditors meeting due to be held today, has been cancelled. Plans to discuss a company voluntary arrangement have been put on hold to allow time to review the situation.
The club is in debt of £28 million and has been in administration for the last five months. Supporters of the club, The Foundation of Hearts, believe that a deal can still be agreed and are supporting administrators for delaying the meeting with creditors. If the club finds a buyer, it could avoid suffering penalties so this extra time (excuse the pun) will give them a chance to consider all options.
A CVA followed by administration can be a suitable solution for distressed clubs and companies, as administrators can protect businesses against aggressive creditors. It also allows enough time for a CVA to be proposed which can take a number of weeks. For more information about how CVAs can work for football clubs, click here.