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Row between UHY and Griffins 9 June 2010

 

In response UHY has publicly rubbished Griffins’ rival proposal branding it “fanciful” and accusing the firm of being irresponsible.

Griffins recently put forward a proposal to Portsmouth’s creditors offering them potentially 99p in the pound, far greater than the 20p pitched by club administrator Andrew Andronikou. 

Griffins has suggested modifications to the proposal including creditors gaining extra money from Premier League parachute payments, TV rights money, player sales and slashing the wage bill which would result in creditors gaining 65p in the pound. This would be hiked to 99p if former owner Sacha Gaydamak drops his £34m claim.

However UHY has slammed the proposal and said: “Whilst we always welcome fresh ideas, this offer is fanciful. If the club paid out 65p in the pound, let alone 99p in the pound, it simply wouldn’t be able to survive.

“For some reason the proposal overstates the clubs income over a five year period by over £17 million. Some of the errors are basic. For example, Griffins has included VAT in its calculations, but that would go to HMRC, not the club.”

In a statement Hacker Young also accuses Griffins of attempted to poach business and the appointment:  “I am not sure whether advancing a proposal to win business from creditors, which could destroy the club in the process, is a responsible position for an insolvency practitioner to be taking.”

“Griffins proposal would send out completely the wrong message to creditors. It would be saying that football clubs can be run with excessively high levels of debt, without robust financial management, and that everyone will get their money back in the end.”

However, Griffins has publicly stated it is not interested in winning the appointment: “We thought the document was clear and we are happy to repeat that our firm has no interest in seeking any appointment over Portsmouth FC of any description. Our involvement is to represent creditors and to advise them on our concerns about the proposed CVA.”

And in a move that heaps more criticism on the current administrators Griffins’ has questioned Andronikou’s defence of Gaydamak.

In a statement Griffins said: “We are particularly surprised that the Administrators, despite their statutory duties, can find no link between the losses incurred and the management of the club. We feel it would be unwise for any responsible insolvency practitioner to make such a public declaration of support for the former management before a full investigation has taken place.”

The football club’s fate is to be decided at a creditors meeting on the 17th June. The club will need 75 per cent of creditors to vote in favour of Andronikou’s 20p company voluntary arrangement offer. 

However the rescue deal has received another hammerblow as it has emerged HM Revenue and Customs are likely to vote against the CVA. 

HMRC - who claim they are owed £35million - will seek a better offer. A statement from HMRC said: "HMRC is determined to achieve a fair deal for the taxpayer."

 

 

 

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