Newly relegated Cambridge United football club has been forced to file for administration with debts of close to £1m, after a financial review with insolvency experts at Grant Thornton.
‘The club has liabilities of about £900,000 and assets that are in no way sufficient to meet them,’ club finance director Nick Pomery, who was only appointed to the board last week, said on the club’s website.
‘Our relegation to the Conference, confirmed on Saturday (23 April), means it is not feasible these debts can be paid off by trading profitably. We therefore have no choice but to file for administration.’
Pomery warned that the club would need to raise about £250,000 to survive, of which it had already raised ‘a third’, but that that if the rest of the money could not be found, the club would be ‘forced to close’.
‘Working with the administrators Ian Carr and Nick Wood, Andy Pincher and I are currently calculating the amount of money the club will need in order to present an acceptable offer to the creditors and trade through the close season while we restructure the club to be ready for Conference football,’ he said.
The U’s filed for administration in the Chancery court earlier this morning, almost a week after its relegation to the non-league Nationwide Conference.
Despite the bad news, Pomery sought to reassure club suppliers: ‘Although an administration order means that the club cannot settle existing bills, it does also mean that suppliers have assurance that any future supplies ordered by the administrators will be paid for in full.’
He added: ‘We very much regret the impact this will have on our suppliers, many of whom have been good friends to the club over many years. We will do whatever we can to minimise the impact they feel.’
The club announced that under an administration order it would continue to trade under the day-to-day management of administrators Grant Thornton.
Pomery told the club’s website that Grant Thornton was chosen because it is a ‘local firm’ but has ‘significant expertise’ in football insolvency.
‘Fans will have heard scare stories of enormous bills charged by administrators, but we are lucky in that Grant Thornton recognise the community value of the city’s football club and have agreed to a discounted, fixed price contract. We are very grateful for their support in this regard.’
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