Isn't it about time that Hibs.net had a financial forum. It seems better informed than most.
Anyway, I must admit that I am not really clear on the Administration versus Liquidation route, so did a bit of an internet search. I can find text on administration, but nothing much on Liquidation.
ADMINISTRATION: In the United Kingdom, football clubs sometimes choose to enter administration when they are unable to pay off outstanding debts. Under the Insolvency Act 1986, a business will face a winding-up order bringing them to court and if it is shown that a business cannot pay debts as they fall due or cannot repay outstanding debts then the company will be classified as insolvent. Administration puts accountants "in charge of pretty much everything apart from coaching the players and picking the team". For a football club in administration, the "football creditors rule" requires football-related debts such as wages owed to players and staff, and transfer fees owed to other clubs to be paid first.
What happens to the debt? Is it written off? How is Liquidation different?
NOTE: can we keep this devoid of comments about the Yams and it would be good to keep it from being merged with the Yams-mega thread?
Results 1 to 7 of 7
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19-06-2013 02:51 PM #1
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Administration & Liquidation (non-Yam content)
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19-06-2013 03:37 PM #2This quote is hidden because you are ignoring this member. Show Quote
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21-06-2013 03:44 AM #3
so how does a team come out of administration and at what point does being in administration turn into liquidation?
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21-06-2013 04:12 AM #4
A club comes out of Administration when things are "stabilised". In other words, there's a plan in place which will allow the club to cut down on the debt figure over an agreed period of time with the lenders, while managing to maintain stability.
A club goes into Liquidation when stability can't possibly be achieved, regardless of the plans put forward.
Administration is "Check". Liquidation is "Check Mate".
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22-06-2013 08:06 AM #6
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Cheers for all the responses.
So under administration, the rescue plan would still involve one to repay the debt. Is that the case? I had believed that the debt would be cleared. If that is not possible, liquidation follows.
Also, what happens to the owners of the company under administration?
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22-06-2013 08:24 AM #7This quote is hidden because you are ignoring this member. Show Quote
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