UHY HACKER YOUNG partners Andrew Andronikou and Peter Kubik have hit back at Portsmouth FC administrators PKF.
The Championship club entered administration for the second time in two years on 17 February, with PKF partners Trevor Birch, Ian Gould and Bryan Jackson appointed.
Previously Andronikou, Kubik and Michael Kiely were appointed administrators to Portsmouth FC in 2010 which was sold the same year.
Andronikou and Kubik have issued a statement today hitting back at PKF administrations about the allocation of league funds.
The Premier League is due to make a parachute payment to Portsmouth this month however, as part of a repayment plan, agreed during the first administration, the full amount of £2.2m is earmarked for former owner Sacha Gaydamak.
PKF administrators have asked their lawyers to challenge this arrangement.
However, Andronikou and Kubik said this information to pay the former owner has always been available and Gaydamak’s consent was vital to the survival of the club and its subsequent sale.
All Premier League and Football League clubs must exit an administration via a Company Voluntary Arrangement (CVA). A CVA is an agreement to repay a portion of debt over an agreed period of time, while allowing the business to continue trading. The process must have the support of at least 75% of creditors by value in order to be pushed through.
However, Gaydamak’s £2.2m parachute payment was not part of the CVA agreement voted for by the creditors before the club was sold.
A statement from Andronikou and Kubik said: “Gaydamak would only provide consent and release his security over the club’s assets if he was given new security by way of an assignment of Premier League parachute payments. Without such an arrangement, the club would not have been sold and would have subsequently entered liquidation. Instead, a sale was successfully completed and the club exited administration,” the statement said.
“We are surprised that Birch did not undertake a more detailed review of all documentation relating to the club’s administration and CVA in 2010, prior to accepting his appointment as joint administrator.”
Andronikou and Kubik also hit back that PKF administrators should have known about the allocation of the parachute payments when the firm undertook due diligence work on behalf of Convers Sports Initiative, the parent company and major shareholder of Portsmouth, before it bought the club.
Both the UHY Hacker Young partners were named Convers Sports Initiative (CSI) administrators when the company collapsed in November last year causing a knock on effect for Portsmouth FC.
PKF administrators are also talking to lawyers to see if £300,000 held by the administrators of CSI can be returned to the club.
Accountancy Age understands when PKF administrators were appointed to the club, Andronikou and Kubik handed over about £575,000 on behalf of CSI. However the duo kept £300,000 to pay for the cost of pre-appointment work at Portsmouth FC.
“Both UHY and Walker Morris [lawyers for Andronikou and Kubik] are owed substantial sums of money in respect of work carried out on behalf of the club prior to the club being placed into administration. At the court hearing regarding Portsmouth Football Club’s recent administration it was ordered that these costs of application be paid,” said the joint statement from Andronikou and Kubik.
Duff & Phelps’ Irish business now boasts over 70 staff
FRC looks into events at BHS following pressure from MPs to scrutinise directors and advisers involved in sale of department store prior to its collapse
Richard Crump discusses the latest accountancy news, including BDO's new managing partner, the crisis at BHS and Accountex.
The fast-track move is a bold departure from the norm, as a probe would normally only begin several months after administrators had finished their own enquiries