hill83
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Football League statement - Coventry City[/h]Posted on: 08.08.2014
At its meeting in London yesterday, the Board of The Football League considered the matter of the outstanding Dividend Payments from Coventry City's period in administration.
As part of the membership agreement that saw Coventry City's share in The Football League transferred to the Otium Entertainment Group in August 2013, the Board required the Club to provide a fund of £600,000 for distribution to unsecured creditors, including the Club's landlord at the Ricoh Arena, Arena Coventry Limited (ACL), as outlined in its original CVA proposals. The CVA was ultimately rejected by the Club's creditors.
The Club sought a reduction to the figure it should pay on the following grounds:
1. ACL have already received a payment under a separate guarantee of £300,000 which should reduce the sum it should now pay.
2. A number of additional, unforeseen costs have been incurred during the liquidation of the 'OldCo' company which should be reflected in the sum it should now pay.
The Board considered the matter in detail, including representations made by the two parties and received detailed legal advice.
The Club's claim regarding the payment under guarantee is not upheld.
On the matter of the additional costs of the liquidation, the Board considered the issue in light of what would have happened to the £600,000 sum had the CVA ultimately been accepted. In such circumstances, the sum received by creditors would have been reduced if the costs of the process had eventually proven to be higher than those assumed in the original CVA proposal.
In the Board's view, having analysed the relevant costs, it is reasonable that a reduction is made to the sum owed by the Club under the terms of its membership agreement. The Board determined that the Club should pay ACL the sum of £471,192, with the £81,643 reduction being a proportion of the additional costs incurred. This sum should be paid to ACL by 14 August 2014.
The Football League's Chief Executive, Shaun Harvey, said: "This has been a complex and unwelcome disagreement within a wider, more significant dispute. By concluding this matter, we can now allow all parties to concentrate on the more important issue of getting Coventry City playing its matches back in Coventry at the earliest opportunity."
Football League statement - Coventry City[/h]Posted on: 08.08.2014
At its meeting in London yesterday, the Board of The Football League considered the matter of the outstanding Dividend Payments from Coventry City's period in administration.
As part of the membership agreement that saw Coventry City's share in The Football League transferred to the Otium Entertainment Group in August 2013, the Board required the Club to provide a fund of £600,000 for distribution to unsecured creditors, including the Club's landlord at the Ricoh Arena, Arena Coventry Limited (ACL), as outlined in its original CVA proposals. The CVA was ultimately rejected by the Club's creditors.
The Club sought a reduction to the figure it should pay on the following grounds:
1. ACL have already received a payment under a separate guarantee of £300,000 which should reduce the sum it should now pay.
2. A number of additional, unforeseen costs have been incurred during the liquidation of the 'OldCo' company which should be reflected in the sum it should now pay.
The Board considered the matter in detail, including representations made by the two parties and received detailed legal advice.
The Club's claim regarding the payment under guarantee is not upheld.
On the matter of the additional costs of the liquidation, the Board considered the issue in light of what would have happened to the £600,000 sum had the CVA ultimately been accepted. In such circumstances, the sum received by creditors would have been reduced if the costs of the process had eventually proven to be higher than those assumed in the original CVA proposal.
In the Board's view, having analysed the relevant costs, it is reasonable that a reduction is made to the sum owed by the Club under the terms of its membership agreement. The Board determined that the Club should pay ACL the sum of £471,192, with the £81,643 reduction being a proportion of the additional costs incurred. This sum should be paid to ACL by 14 August 2014.
The Football League's Chief Executive, Shaun Harvey, said: "This has been a complex and unwelcome disagreement within a wider, more significant dispute. By concluding this matter, we can now allow all parties to concentrate on the more important issue of getting Coventry City playing its matches back in Coventry at the earliest opportunity."
