CVA - What Does It Mean?
Friday, 8th Mar 2002 00:00

CVA - What Does It All Mean

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We all know that the club is heavily in debt. What most people don't know is exactly how much. The figure we believe is close to, and may even exceed £1.5 million. We know that we cannot afford to pay that figure back and we also know that when Petty left there were creditors ready to wind the club up the following day. Thankfully, that was staved off and now there is a chance that some of these are back knocking on the door and ready to kill us off again.

So what makes up the debts at the moment of the football club. Mel Nurse is the single largest creditor, having purchased the debt off ninth floor in a bid to oust Tony Petty from the club. His debt stands at £700,000 and makes up close on 50% of the outstanding debts.

Other creditors of the club include John Hollins, Paul Compton, Addo and Nicho, The Inland Revenue and possibly some of their regular contacts in D Coaches, programme printers maybe even Bergoni?

A creditors voluntary arrangement is NOT the same as liquidation, it is merely something that a business can apply to do because it cannot afford the debts that it has incrued. The situation is as harsh as this if this does not happen then the football club will cease to exist. I don't mean to shock with this statement but it needs to be said as it is the reality of the situation we are in.

With a Creditors Voluntary Arrangement the basics are that we go to the creditors and offer them a percentage (believed to be 5%) of what they are owed and, if 75% of the total creditors agree then we go ahead with the arrangements. One creditor falls outside this and this is the Inland Revenue who will get the full amount of the money owing to them.

So what are the chances of this happening? Well, if the debts are £1.5m then Mel Nurse is owed £700,000 of that (46%) giving us a fair slice of the 75% which we already need. John Hollins is a large creditor and whilst you think that he would not accept out of spite, has he got a choice? Would any football club employ a man in the future who has a statement on his CV that he called in a debt that effectively ruined another professional club? You could apply the same argument with the likes of Addison, Nicholas and Compton.`

Other creditors if indeed they do include the likes of D coaches would also most likely accept knowing that the alternative is sod all and are possibly not big enough to just write off debts of this size.

There does seem logic in this. The alternative was that Addo and Nicho may have been looking at pay rises and bonuses in their new contracts that the club could not afford. This is something that is possible. I'm not blaming them for this, most people would do the same in their situation but at the same time we don't know what was asked for so it's difficult to comment fully. Now on the assumption that the club could not afford what the management wanted was the logical difference to let them go now or wait until the contracts expired in September and find a new manager when the new season started? I know which one makes sense to me.

But what of a new manager? Roger Freestone and Nick Cusack have not been offered anything other than being in charge for tomorrow although logic suggests to me that they will be in charge until the season end and then it is open for discussion. If we win 8 games surely they will be offered the chance to stay permanently and if they lose 8 games then the opposite will happen. Won't it? We need a manager(s) but this decision will wait for now, why make it if we don't come out of this the other end and would any outside manager come here in this situation?

But away from that. Although the news came as a shock and was treated with disgust and the like maybe it is starting to make some sense? It is not very often I would advocate the silence out of the club in the past few weeks but at the same time is it better this way when we have formulated a plan than just confirming what most of us have never forgotten This club is on the brink of not existing any more.

Having said that it takes nothing away from the criticism I laid yesterday about the lack of any statement at all over yesterday's news, unless of course you count the four lines that appeared on the official site. It told us nothing and opened the consortium up to this sort of criticism. Surely a better way would have been to explain a little more about what they were planning. "We are planning to do a CVA" would have been sufficient at the time.

We'll wait and see what the next statement says, especially regards the CVA but we need to encourage the consortium to make a little bit more in depth statements and try and head off the criticism before it starts. A fully informed fan makes a better judgement than someone who is fed on little scraps. Always will be the case and this is why we keep you updated with the news in full.

Remember that saying "I'm like a mushroom, I'm kept in the dark and fed on shit" perhaps this sign should have been torn down when the likes of Mike Lewis left the club.