Counting the cost of Administration

[MPH]

Linky linkJust found an intresting article that i thought i would share...

Counting the cost of Plymouth Argyle’s administration

Last week Plymouth Argyle’s administrators released their report on the financially stricken club along with a list of the club’s creditors. Gary Andrews has been wading through the figures and counting the cost to those owed money by the Pilgrims.

Amidst the financial chaos still surrounding Plymouth Argyle, a small piece of levity could be found in the otherwise grim administrator’s report. Towards the end of the list of debts came the revelation that the Pilgrims owed Swindon Town the princely sum of 4p. Whether they’ll pay this in full or in cash is yet to be revealed, but it’s one of the few moments to make you smile within the litany of creditors, all out of pocket due to one football club.

The total debts are estimated to have reached £17m and the list of creditors is a thoroughly depressing read. It suggests that at some point, Argyle just stopped paying their bills, not just to the taxman, but to most of their suppliers an plenty of local businesses.

These businesses are unlikely to see much of the cash they’re owed by the Pilgrims. The administrator, Brendan Guilfoyle, has offered creditors 0.77p in the pound, accompanied by a stark warning. If this Company Voluntary Arrangement (CVA) does not go through then Argyle could face potential liquidation. At the very least, they would be likely to start next season with a points deduction of around minus 15.

The headline debts are obviously the biggest creditors. Some of the cash owed to these are secured against Home Park itself, while football creditors should be paid in full. Argyle’s players are owed £2.8m in wages. Guilfoyle has made it clear that without a complete deferral of these, the club could not continue.

But those deferred wages also include the non-playing staff, who are collectively owed £444,000. The Plymouth Herald has been carrying stories of staff, many of whom are on low wages, having to rely on the donations of others just to pay their pills. The players even rejected what cash they were offered this month so the other staff could get paid. As an aside, the administrators, who were called in earlier this year, are owed £230,000.

The players aren’t the only football creditors and all are owed more than Swindon Town’s 4p. Local rivals Exeter City are owed £2761.25 for Jamie Mackie, who moved to Home Park back in 2008, while Tranmere Rovers are still waiting on £3,342.58.

These are some of the smaller debts. Spurs are owed just over £21,000 and 1860 Munich haven’t been paid a little over £33,000, presumably for Kenny Cooper’s wages. Most shamefully, Southport are owed £51,580 relating to the transfer of Craig Noone, who arrived in Plymouth in 2008 before moving onto Brighton. Southport are by far the smallest club to be owed money and that sum of money is important to a non-league club.

It’s when you look further through the list of unsecured creditors, though, that you realise the cost to the smaller businesses and charities. Unsurprisingly, the St. John’s Ambulance feature in the list. They’re owed a little over £8,100 and if the CVA goes through, will receive just £66. A group of Pilgrims fans, shamed by their club’s inability to pay, are attempting to raise money to pay off the debt themselves.

Savex Services, a small company from Tiverton specialising in generations is owed £428. Plymouth City Coach Limited are owed £7,000, while D J Morgan Catering, also from Plymouth, haven’t been paid £6,890. A local dentist is owed £198, the Martin Luck Group, a local independent office supplier is owed a little over £2,500, Plymton’s Friary Mill Bakery are waiting on £2,316 and Cornish Farm Produce are owed £4,238.

These are just a small selection of the local business badly hurt by by the inability of Argyle to pay their bills, despite being one of the city’s bigger companies. The amounts may be nowhere near those owed to the club’s biggest creditors but the knock-on effect will be felt by these local traders. It will take years for Plymouth Argyle to regain any goodwill from the local community.

Any finally, the folly of Plymouth’s bid to become one of the World Cup 2018 stadiums is laid bare in the report, with large sums owed to assorted consultants and lawyers.

Populus, a global design practice that creates environments that “draw people and communities together for unforgettable experiences” are owed just shy of £400,000. It’s unlikely Populus or the local community will forget this experience in a hurry.

Transport consultants Steer Davies Gleave are owed £100,000, chartered surveyors Montagu Evans are owed £72,000, lawyers Field Fisher Waterhouse and Clarke Wilmott are waiting on £355,000 and £81,440 respectively, property company DTZ are owed £38,000, while property consultants Rose Project Services are owed £117,502 and engineering and design consultants Ramboll are owed £128,000.

That’s over £1m on a project that always contained a large element of risk and was paid out with nothing to show for it, bar a staggering level of financial mismanagement and ineptitude.

Despite all the financial chaos engulfing the club, Argyle themselves are rallying on the pitch and with three games left, still have a fighting chance of staying up, although their remaining matches against local rivals Exeter City, Southampton and Leyton Orient won’t be easy.

Meanwhile, the ownership situation continues without resolution. Devon businessman James Brent remains the favourite to take over the club, although Paul Buttivant, who expressed an interest in Wrexham some years ago, has also bid for the club.

Whoever takes over will still have the debts to pay off and if the CVA fails to go through, there’s every chance Argyle could be in League Two, fighting against a third successive relegation due to a points deduction.

Sir Roy Gardner, Argyle’s former chairman and one of their main creditors once said he didn’t do failure when he arrived at the club. Those words seem particularly hollow in light of the administrators report. Gardner and his fellow board members failed, and failed badly, and the price of that failure is now open for everyone to see.

Not a bad read really..