Counsel for HMRC stated that Bolton Wanderers had given notice of intention to appoint an administrator. The High Court held that the case would be adjourned until 22 May 2019. This time period also allows Bolton to try a complete a takeover and secure the funds to repay the debt before liquidation becomes a reality for the embattled club.
Why are Bolton Wanderers close to insolvency?
Bolton Wanderers Football Club are in serious financial difficult with a real risk of insolvency. The club’s owner, Mr Ken Anderson, has been in dispute with Mr Laurence Bassini (the former chairman of Watford F.C.) whom agreed a sale and purchase agreement for a 94.5% shareholding on 17 April 2019.
However, the takeover has not completed as Mr Bassini has not been able to provide proof of funding as per the sale and purchase agreement.
The perilous state of the club is epitomised by the fact that Mr Bassini appears to purportedly be speaking on behalf of the club and the statements coming out from his camp seem to suggest that he is acting as some sort of de facto owner. He has allegedly been liaising with HMRC prior to the hearing, in an attempt to seek an adjournment.
What is administration and what does this mean for Bolton?
Administration is in effect a voluntary insolvency process whereby a company appoints a insolvency practitioner to assume control and manage the company’s affairs. All the company’s assets will be controlled by the IP.
The advantage of administration for the club is that creditors such as HMRC cannot apply for a winding up petition whilst the company is under administration. However, for a business side, administrators will be unlikely to offer funds at all towards player purchases and will likely seek the sale of assets (such as players) to repay any creditors.
Administration would also mean that the club would start next season on minus 12 points. Coupled with the fact that players are entitled to be released from their contracts given the serious breach of not being paid, and the fact that administrators will seek to liquidate the club’s assets to pay its’ creditors, it is likely that Bolton will suffer back-to-back relegations unless a new owner with funds is found within the next 14 days.
On what grounds can a company oppose a winding up petition?
- the debt alleged in the demand to be owing is genuinely disputed on substantial grounds by the company;
- the company has a genuine right of set-off against the creditor which exceeds the amount claimed in the demand; or
- in certain other limited circumstances (for example such as Jurisdiction, Company likely to become insolvent, Technical or procedural error or Delay).
What is the process to seek a dismissal of a winding up petition?
The procedure to oppose a winding up petition is to file a witness statement in opposition in court not less than five business days before the date of the hearing of the petition (rule 4.18(1), Insolvency Rules). A copy of the evidence must also be sent to the petitioning creditor as soon as reasonably practicable (rule 4.18(2), Insolvency Rules).
The company is entitled to appear at the hearing of the petition and to oppose the making of a winding up order.
It is usual for a company to instruct solicitors and/or counsel to appear on its behalf at the hearing.
How can a company secure an adjournment of a winding up petition?
If the debtor company asks (preferably by witness statement evidence) that the petition be adjourned to enable settlement funding to be arranged or to determine the correct position on the debt to be established, the Court may be persuaded to allow a short adjournment.
Adjournments can be given for almost any reason (preferably evidenced) and can be obtained either with or without the consent of the petitioning creditor (for example HMRC) as it is the Court which grants the adjournment not the petitioner.
We are experienced in seeking adjournments and are able to advise our clients if they have good cause to obtain an adjournment of the winding up. If the debt is not disputed and is to be paid, an application can be made for the petition to be withdrawn following settlement.
Instruct Specialist Winding Up Petition Lawyers
We provide a no cost initial case review to establish whether or not we can help you. We are a specialist City of London law firm made up of Solicitors & Barristers and based in the Middle Temple Inns of Court adjacent to the Royal Courts of Justice. We are experts in dealing with matters surrounding insolvency in particular issues. Our team have unparalleled experience at serving statutory demands, negotiating with debtors/creditors, setting aside statutory demands and both issuing and defending winding up petitions vigorously at the Royal Courts of Justice (Rolls Building), or the relevant High Court District Registry or County Court with jurisdiction under the Insolvency Rules.