BusinessBusiness RecoveryWimbledon survives second Revenue challenge

Wimbledon survives second Revenue challenge

The Inland Revenue has failed for the second time in as many weeks to overturn Wimbedon Football Club's vital company voluntary arrangement (CVA).

Link: Revenue to get second bite at Wimbledon FC

The court of appeal upheld last Tuesday’s High Court ruling by Mr Justice Lightman, who dismissed the taxman’s original challenge to the CVA.

The case centered on the controversial ‘super creditor’ rule, under which football creditors such as players and the manager must be paid in full, before preferential creditors.

The judge found that: ‘The power of the League to impose the obstacle and secure full payment for creditors of its choice may be objectionable…but the obstacle exists [and] by common consent is legal.’

Yesterday the Lord Chief Justice, Lord Woolf, dismissed the Revenue’s appeal against the High Court decision to uphold the CVA, though he has yet to explain his reasons.

Wimbledon would face liquidation without the CVA and the league has said it will expel the club if it fails to pay football creditors in full, payment the taxman had argued would see its coffers unfairly deprived.

Speculation is already underway that the decision could have repercussions beyond Milton Keynes. Exeter City’s solicitor, quoted in the club’s local paper, the Express & Echo, suggested the Revenue ‘may decide to withdraw’ its challenge to the conference side’s CVA in light of the decision.

Alastair Beveridge, partner at Kroll Buchler Phillips, said: ‘Although you might not like the rule it exists and it’s part of the rules of engagement. The Revenue is arguing the same point in the Exeter case so it will be difficult for them to continue the action.’

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