Ipswich Town exit administration
IPSWICH Town Football Club yesterday reached "an important milestone" in its return to normal trading as it finally exited administration.The move, confirmed by the High Court at 10.
By Duncan Brodie
IPSWICH Town Football Club yesterday reached "an important milestone" in its return to normal trading as it finally exited administration.
The move, confirmed by the High Court at 10.30am, took place as planned following the statutory 28-day "cooling-off" period from the agreement with creditors of a reorganisation of the club's debts.
It also emerged yesterday that, on Tuesday this week, the club would have run out of cash had not an unidentified group of directors put up £350,000 to see it through the final four days.
This issue has now been resolved, however, with the exit from administration giving the club access to payments received for debentures and next year's season tickets both of which have been well supported – as has a loan stock issue which has raised more than £1 million so far.
The end of the administration period, which began on February 10, also means that day-to-day control of the club's affairs returns to the board of directors, although the administrators from accountants Deloitte & Touche will continue to play a supervisory role.
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This will continue throughout the four-year term of the Company Voluntary Arrangement agreed with the club's creditors – which could see some receive as little as 5p in the pound – to see that it is performing in line with the business plan set out in the CVA.
Club chairman David Sheepshanks said: "Today represents an important milestone in our recovery.
"It feels like fresh air after the removal of a suffocating black cloud hanging over the club these past few months. There are still further issues to be addressed in the coming weeks and months but I am confident that these can now be successfully negotiated."
The next stage in the process is for the club to receive back its share in the Football League which, following a successful meeting with league officials last week, is expected within the next day or so. This will enable the club to re-enter the transfer market.
One key issue for the club is to continue the reduction of its player wage bill to a level sustainable in Division One, with the "parachute" payments following the club's relegation from the Premiership ending after the coming season.
However, Mr Sheepshanks stressed yesterday that the much-reported aim of reducing the annual bill to £5 million was a target for the end of the coming season and would not necessarily be achieved by the kick-off in August.
And he also assured fans that, while some players would leave, there would also be some new players coming in, with manager Joe Royle having already identified a number of targets.
"Over the last few months all the focus has been off the field," said Mr Sheepshanks. "Now the most important think is that we can focus on football, providing Joe Royle with the opportunity to build a squad capable of winning promotion.
"Our problems off the pitch began on the field, with relegation from the Premiership, and the cure is to win promotion back again."
However, he said that lessons would be learned from the club's difficulties, with the directors being determined to ensure that the wage bill was compatible with a Division One income in the event of promotion not being won in 2004.
And, while again expressing his apologies to the creditors who stand to lose money, Mr Sheepshanks also repeated his view that the underlying reason for Ipswich Town's difficulties was the "ridiculous" gulf between Premiership and Division One finances.
The board's former strategy of relying on the sale of players if Premiership status was not secured had been sound under the circustances at the time, before the collapse of the transfer market and many.
Other Premiership clubs had been run on a similar basis, and were now breathing a sigh of relief that they had not been relegated, he added.