BusinessBusiness RecoveryPortsmouth FC CVA approved

Portsmouth FC CVA approved

Portsmouth FC gets approval to exit administration after £13m image rights liabilities get stripped out of HMRC's claim

The company voluntary arrangement at Portsmouth FC was approved today at a
creditors’ meeting after the taxman’s voting power was reduced.

HMRC’s claim was cut from £37m, about 25% of the total debt owed by the club
to creditors, to £24m.

A source close to the case said administrators stripped out £13m of tax owed
on income generated from players’ image rights.

Because HMRC was treated as being owed £24m instead of £37m by the
administrators, it meant the taxman could not wield around 25% of the creditors’
vote by debt.

Steve Powell, an insolvency practitioner who sits on the creditor committee,
told Accountancy Age voting was 81.3% for and 18.63% against.

“It’s a reasonably good outcome as we [creditors] stand to receive a minimum
of 20p in the pound return,” said Powell.

Powell also confirmed HMRC voted against the CVA, which needed 75% or more of
creditors to vote in favour to be approved.

A statement from the taxman said: “HMRC notes that the result of today’s vote
was to accept the CVA proposals. We will now be carefully considering our
position. “

“HMRC stands by the full amount of its claim (£37m). We will now carefully
consider our position following (the club’s) decision to reduce the amount of
our claim for voting purposes,” it added.

Further reading:

Breaking
news: HMRC to veto Portsmouth CVA

Insolvency
practitioner to sit on Pompey creditor committee

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