Andy Gilder wrote:
You don't get how this works, do you?
In no other line of business when you enter administration are you allowed to pay 100% of your liabilities to some creditors based on what industry they are in but 10% to others. Why should football be any different?
As a non-preferential creditor HMRC won't "eventually get its money". The administrator will make whatever distribution it can as agreed at the creditors meeting, then that's it. You can whistle for the rest of what you're owed as the company disappears and any subsequent "Portsmouth FC Limited 2010" that takes over running the club does so without any of the historic debt of the old business.
If HMRC are owed £10m, but only get paid £1m as a non-preferential creditor that's £9m gone missing out of the exchequer. The likelihood is that instead of going into the public purse where it was supposed to go that money will instead be sat in the Swiss bank account of some very rich footballers and their agents.
Tell me again why that's ok?
Football is only different because of the increased potential for the domino effect putting so many other clubs out of business. The rule that needs to be changed is how much transfer debt they are allowed to rack up and needs to be looked at by FIFA. Until then though, having other clubs as preferential creditors is the best answer to a poor situation.
They may not get THAT money, but they'll continue to get money in from Portsmouth's future trading, and those of the other English clubs concerned. If Portsmouth went completely I very much doubt there'll be able to be a replacement for future revenue to HMRC. What I meant by them nearly always getting their money is that they will be around long enough to recoup it. Other clubs may not.
I never said it was right, I said it makes sense.
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