Notts County Administration Threat

Published on : 2nd April, 2024
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Article Originally published in February 2019

 

The worlds oldest football league club, Notts County, risk going into administration, according to an exclusive Sky Sports News report.

 

The club are five points from safety of the league, with a financial crisis giving their future many red cards.

 

Chairman, Alan Hardy brought the club in January 2017, and put it up for sale just last month.

 

To purchase the club, it has been revealed that Hardy used a loan from his interior design company, Paragon. The recent accounts posted on Companies House in June 2017, refer to a ‘related party debt’, of £7m, for Paragon Interiors Group – the value of the funds used to buy the club.

 

Paragons business situation stresses administration, with the company already stopping work on numerous projects, advising customers they will hope to catch up in March. If the business call in administrators, the debt from Notts County is likely to be demanded, leaving huge doubt for the football clubs finances and future.

 

Supporters to the club have watched them loose their league two play-off semi final to Coventry in May…thinking that was bad, they now watch them face relegation for the first time of the 157-years of existence.

 

Will the final whistle be blown? Is this the end?

Readers Guide To the Administration Process

Here is a quick guide to the legal realities of the administration process.

The Process: Administration is a legal “moratorium” that protects insolvent companies from creditor action. Licensed Insolvency Practitioners take control to either rescue the business or sell its assets to achieve a better result than immediate closure.

Who gets paid? There is a strict legal queue. Secured lenders (banks) and “preferential” creditors (employees and HMRC) are paid first. Unsecured creditors, including trade suppliers and customers, are at the back of the line and often receive nothing.

Employees: Redundancies often occur in the first 14 days. After this window, the administrator “adopts” remaining contracts, making ongoing wages a priority. Unpaid redundancy or notice pay can usually be claimed through the government’s Redundancy Payments Service.

Suppliers & Customers: Suppliers should negotiate “pro-forma” (upfront) terms for any new orders. For customers, gift cards and deposits are rarely honored. However, if you paid over £100 via credit card, you may be able to claim a refund under Section 75.

Written ByRobert Moore

Insolvency Advisor & Content Lead

+447584583884

Rob has spent over twenty years on the front line of the UK restructuring sector, acting as a trusted first point of contact for many worried company directors. If you are facing aggressive creditor pressure or dealing with bailiff threats, Rob can talk to you through your options clearly

Rob is now working with the Board at RMT to develop strategic marketing programmes to support the business plan and drive more company rescues.

Robert Moore