Griffins Insolvency Practitioners challenges Pompey administrators with higher return

Griffins Insolvency Practitioners said it could offer creditors 65p in the pound return, a significant increase on the 20p return offered by Pompey administrators from UHY Hacker Young.

The proposals, drafted by Griffins Insolvency Practitioners said it could fund the increased dividend payment if the club reduced wages from the current £42m to £5m per year and Portsmouth was relegated to League 1 or 2.

Pompey administrators proposed, in the latest CVA, that wages will be reduced to £13.6m initially. If the club was still relegated from the Premier League the administrators would reduce wages to between £8m - £10m the following season.

The proposals from Griffins also claim extra money could come from future income such as parachute payments which are essentially TV rights money, and player sales.

A statement from the proposal said modifications should include: "The creditors to receive all TV, league and transfer fees, giving a dividend of around 65p to unsecured creditors. This would leave the club with adequate funding to operate in the Championship."

However, under Premier League rules, all football creditors, such as players and managers, are paid in full under the 'Football Creditors Rule' through parachute payments and transfer fees with the remaining money divided between the creditors.

Under the Griffin proposal football creditors would recieve £19m in the first year. Portsmouth administrators estimate football creditors are owed more than £22m.

A spreadsheet included in the Griffins Insolvency Practitioners proposal said the club should receive approximately £52m for the first year through parachute payments.

Other proposals include former owner Sacha Gaydamak dropping his claim for more than £30m.

Andrew Andronikou, one of the administrators at Portsmouth and partner at UHY Hacker Young said: Ultimately we have produced a proposal that maximises the position for creditors."

Andronikou added any other IP has the right to put through a "modification".

"We stand by our proposals but creditors have the right to review other proposals," he said.

Accountancy Age understands Pompey administrators are to meet with HMRC this week and a creditor meeting to take place on 17 June 2010.

HMRC filed a writ against the Premier League challenging the football creditor rule in May this year.

Andrew Andronikou, Peter Kubik and Michael Kiely from UHY Hacker Young were appointed joint administrators to Portsmouth on 26 February 2010.

Further reading:

HMRC to veto Portsmouth CVA

HMRC tackles Premier League football creditor rule

Portsmouth FC heading for groundbreaking deal

Top 20 firm sues former IP over repayment