Administration

[Ross 'LCFC' Turner]

i may sound very stupid here but i cant get my head round administration.

what is administration?

is it the same as debt?

i saw in the El Classico build up last week that both clubs were 250million in debt, Man Utd are reportedly over 500million in debt so how come they dont get any points deductions or transfer bans?

i just cant get my head round it all, can anybody clear it up in a simple way?

[Dickie Greenleaf]

Clubs like Barca and Man Utd are in 'manageable' debt and are not insolvent, i.e. they can make repayments and/or their creditors are willing to take payment over a long period of time and not take action due to the commercial power/potential of them. These sort of allowances aren't really afforded to such outfits as Luton etc

Administration isnt debt per se; Its a way of operating 'as a rescue mechanism for insolvent companies and allows them to carry on running their business', whereby it is run in the interest of its creditors, but doesnt have to go out of business

[Guest Bilo]

^^

What Dickie Greenleaf says. The creditors of Barcelona, Man United and Real have confidence in their ability to pay due to their income being large enough not to default on loans or their assets being large enough to cover it.