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Portsmouth to learn fate on Thursday

Max

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Apr 14, 2009
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Portsmouth will find out on Thursday whether an appeal by tax authorities which disputes the amount of money they are owed has been successful.

HM Revenue & Customs says it is owed £13m more than the £24m claimed by Portsmouth's administrators. Pompey, who were relegated to the Championship in May, are striving to come out of administration.

If the appeal succeeds, Pompey could face a further points penalty and the threat of liquidation.

Gregory Mitchell QC representing HMRC told the High Court on Tuesday that the club were operating a "sham" to avoid paying more tax.
He accused the club of paying players via image rights instead of salaries, meaning they would not have to pay tax on their earnings as they could be deposited in offshore accounts.

"[Pay-as-you-earn tax] should have been paid," Mitchell said. "For some years the club has entered into sham agreements under which players were being paid in respect of image rights when in fact there was no commercial basis for it. It was a way in which the club could pay the money into a tax haven."

HMRC claims it is owed a total of £37m and is challenging a Company Voluntary Agreement (CVA) which would allow Portsmouth to exit administration.
For a CVA to be agreed, it must win the support of those owed at least 75% of the unsecured debt. On 17 June the proposed agreement garnered 81.3% of the vote.
But HMRC has argued that the disputed £13m of debt was left out of the original calculations and, if included, it would then have more than the 25% of the debt it needs to block the CVA. It has come down hard on Pompey as it seeks to dispute the situation where football creditors, such as clubs and players, are given preference and up to 100% of monies owed while other creditors only receive a fraction of what they are due.

It's a mess and one which, in the worst-case scenario, could see Portsmouth liquidated
HMRC is one of the non-football creditors and as such would receive only a percentage of what it is owed under the CVA, although if Portsmouth are liquidated HMRC could actually lose more money.

If it wins the case, HMRC could lose the £6m offered under the CVA, with Richard Sheldon QC representing Portsmouth saying: "We see no reason why HMRC want to pursue this appeal. They'd be shooting themselves, other creditors and the fans in the foot. I ask them to go away and consider whether they want to pursue this."
If High Court judge Mr Justice Mann finds in favour of HMRC and Portsmouth exit administration without agreeing a CVA, they could be docked 15-20 points by the Football League.

The administrators may then believe they have no option but to liquidate the club.
In February debt-ridden Portsmouth became the first Premier League club to enter administration. They were docked nine points. Administrators later revealed Pompey owed about £120m and a plan was proposed in June to repay unsecured creditors at least 20p in the pound over five years.


In my opinion, all I have to say is, I am not ******* looking forward to Thursday.

Source - http://news.bbc.co.uk/sport1/hi/football/teams/p/portsmouth/8839169.stm
 

Max

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Apr 14, 2009
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this could make or break pompeys season i belive.
If we get a points deduction then people will want to leave even more leaving us in an even worse position.

Not to mention we could even be liquidated..
 

SamScfc

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Jun 13, 2009
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Don't think Pompey will go bust, I think they'll get a similar situation to us, I think they will get a buyer at the last minute, they're too big a club to go bust.
 

Max

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Don't think Pompey will go bust, I think they'll get a similar situation to us, I think they will get a buyer at the last minute, they're too big a club to go bust.
"Newcastle are a too big of a club to be relegated"

Heard things like that before, hopefully you're right though.
 

SamScfc

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Jun 13, 2009
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"Newcastle are a too big of a club to be relegated"

Heard things like that before, hopefully you're right though.
There's a massive difference between liquidation and relegation IMO.

So, do Pompey need a buyer by Thursday? Or they're pretty much bust?
 

CJACKO11

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Dec 16, 2009
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If we get a points deduction then people will want to leave even more leaving us in an even worse position.

Not to mention we could even be liquidated..
if you dont get a point deduction then i personly believe you will finish in the top 10.
 

Max

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There's a massive difference between liquidation and relegation IMO.

So, do Pompey need a buyer by Thursday? Or they're pretty much bust?
Oh yeah, of course, but it was just an example.

I'm not completely sure, the article doesn't really make that clear but I'd expect we'd need an owner quite quickly after this.
 

SamScfc

WINNING
Jun 13, 2009
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There's too many clubs in admin atm, or was, when people ask the question 'when will football end' this is the answer, we're one step closer.

I'm not saying it will end in the near future though.
 

Joneesy

CHAMPI2NS
Dec 29, 2009
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Yeah, apparently the game between Portsmouth & Reading is in doubt..

Better not be off, due to me already buying my tickets.
 

Zebedee

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Dec 5, 2008
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Max - what are you Portsmouth fans planning? Have any of your legally minded guys got plans for finding a way to make an appeal to the court to highlight the wider impact of sending Portsmouth into liquidation? Anything which fans from other clubs can do to help out?
 

Max

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Apr 14, 2009
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Max - what are you Portsmouth fans planning? Have any of your legally minded guys got plans for finding a way to make an appeal to the court to highlight the wider impact of sending Portsmouth into liquidation? Anything which fans from other clubs can do to help out?
As of yet I don't know of any petitions etc, there's been a few protests outside the ground recently, and there might be one again on the first home game of the season vs Reading if the game actually goes ahead (I hope it does as I've got a season ticket this season). There was talk about getting a lot of fans together and trying to get some money together to donate to the club, like everyone from Portsmouth donating £10 or something like that to a trust but I don't think we'll get enough to make a massive difference to our huge debts.

Hopefully someone/something will be organised by a group of guys who support the club, behind all the drunken fans there must be quite a few who have got their heads screwed on and can sort something out. Here's hoping anyway that both Portsmouth and Liverpool get through the tough times ahead.
 

SamScfc

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Jun 13, 2009
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Max - what are you Portsmouth fans planning? Have any of your legally minded guys got plans for finding a way to make an appeal to the court to highlight the wider impact of sending Portsmouth into liquidation? Anything which fans from other clubs can do to help out?
That's a good point, when we was in administration, about 200 Stockport fans went on a march to the PFA office and then went to Leonard Curtis (administrator) and it worked, so maybe that's something Pompey fans could do.
 

Joneesy

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Dec 29, 2009
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As of yet I don't know of any petitions etc, there's been a few protests outside the ground recently, and there might be one again on the first home game of the season vs Reading if the game actually goes ahead (I hope it does as I've got a season ticket this season). There was talk about getting a lot of fans together and trying to get some money together to donate to the club, like everyone from Portsmouth donating £10 or something like that to a trust but I don't think we'll get enough to make a massive difference to our huge debts.

Hopefully someone/something will be organised by a group of guys who support the club, behind all the drunken fans there must be quite a few who have got their heads screwed on and can sort something out. Here's hoping anyway that both Portsmouth and Liverpool get through the tough times ahead.
I'll be looking forward to see that. Reading fans themself have a 'Administration song' of ourself that we sang against Palace last season.. ;)

But on a honest note, i have a soft spot for Pompey myself, and i really hope they can get these money troubles out the way, and crack on in the Championship. I think you've got a good chance this season of going up if you get rid of these financial problems.
 

Shay Given

Banned
Mar 31, 2010
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Does portsmouth owe just (for want of a better word) £37mil that is crazy considering that there are many teams that will fork that out without even thinking much about it to sign a new player. :S
 

Scott

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Jun 14, 2009
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Does portsmouth owe just (for want of a better word) £37mil that is crazy considering that there are many teams that will fork that out without even thinking much about it to sign a new player. :S
No, i think that is what they owe the Taxman alone.
 
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