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
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

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

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:

to veto Portsmouth CVA

tackles Premier League football creditor rule

FC heading for groundbreaking deal

20 firm sues former IP over repayment

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