Mark Humphries wrote: ==================. > > Why was the law (that made HMRC preferential creditors) changed to begin > with? And as it was changed then why the fuck do they expect 100% now.
In a nutshell the law was changed as part of the Treasury listening to business when it said that "making HMRC a preferential creditor often means that there is nothing left for any other creditors when a company goes into administration or is liquidated". This was seen by the government as a reasonable argument at a time when they are attempting to support business, not hinder it. However they took on board the treasury's point that in the case of professional football. Since 1992 over half of the Football league's clubs have been insolvent, failing to pay local businesses, HMRC and public services many millions of pounds. The Football League stood accused of week control of the game (only two football club directors have been prosecuted for the criminal offence of trading whilst knowing their club was insolvent) and they were impressed upon that they should tighten up their scheme of self regulation. The fit and proper persons test is one example of this (albeit one which has not been shown to have any effect on club ownership to date). However the League has completely failed to deal with the issue of Football Creditors. Vested interest and weak leadership meant that the 100% payment to football creditors and it being an essential part of any CVA has become a millstone around their collective neck. Rather than being a deterrent to poor financial management they have had to revisit the situation time and time again, resulting in peanlties like the second relegation at Boston which the League imposed beacuse Boston's administrators failed to achieve the unachievable. Looking at the situation objectively it is clear that an early change of the League rules regarding football creditors and CVAs is required, allied to greater openness and transparency about the financial situation of Football clubs, 50% of whom regularly fail to show that they operate iunder the tenets of good business management. The CVA is a useful tool to businesses which are in difficulty but may be able to trade out of difficulty through a CVA negotiated agreement. It only works, however, where you have openness and honesty from the business concerned and where the creditors have both confidence in the CVA and in their fellow creditors. Something I fear we have not seen at Elland Road.............. John _______________________________________________ the Leeds List is an unmoderated mailing list and the list administrators accept no liability for the personal views and opinions of contributors. Leedslist mailing list [email protected] http://list.zetnet.co.uk/mailman/listinfo/leedslist Join The Leeds United Supporters Trust at www.lufctrust.org
