Does Court decision delay the inevitable for Portsmouth?

Portsmouth Fratton Park

Debts

They now have until 4-00 pm on Wednesday 17th February to come up with a ‘statement of financial affairs’ that proves they can pay off their debts.

HM Revenue and Custom are taking Pompey to Court over an unpaid bill believed to amount to £7.4 million.

At the hearing Portsmouth claimed that they had received two ‘serious’ offers from people interested in buying the club. Of course, they have already had four owners this season, none of whom seem to have had any money. The Pompey fans have heard it all before and they are not holding their breath waiting for these investors to appear.

Inevitable

However, the claim seems to have given the club another seven days grace, even if that is only delaying the inevitable winding-up or administration.

The Court registrar, Christine Derrett, said what everyone else thinks,

“I am very concerned about the financial status of this company. It seems to me there’s a very real risk that this company is undoubtedly trading while it is insolvent. I’m obviously conscious that, by making a winding-up order, it would have very severe consequences not only for the company as a business but for the supporters themselves, but that’s not a consideration that I strictly take into account.”

Gregory Mitchell QC, who represented HMRC, said,

“It’s quite clear, beyond any doubt at all, that this company is insolvent. They have failed to provide any evidence at all as to their solvency. There are many debts and they are unpaid.”

Perhaps with these arguments being made it is surprising that the Court agreed to the delay. The current owner, Balram Chainrai, a Hong Kong-based businessman, became the club’s latest owner last week when he invoked a clause in an unpaid loan he had made to the club. He simply wants to sell the club so that he can get all or at least some of his money back.
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Nigel Hood, representing the club at the hearing, said of the possible winding-up order,

“There would be irreparable harm caused not only to the suppliers but to the employees, six hundred staff and people who have paid in advance for their season tickets, who would lose their money.”

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Although the Court case is only about the £7.4 million allegedly owed to HMRC the club also faces a £4.7 million debt in unpaid PAYE and National Insurance. Add to that the £28 million they owe former owner Sacha Gaydamak, the £1.7 million that former player Sol Campbell claims he is owed and total debts that appear to be in excess of £60m, it is hard to see how Portsmouth are going to escape.

Deficit

Maybe there are some mystery investors just waiting to throw money at the club, but with huge debts, an obviously huge weekly trading deficit and a team five points clear of safety and almost doomed to relegation to the Championship, it is equally hard to imagine who these people might be.

On top of all of this they face an FA Cup game against their closest and fiercest rivals Southampton at the weekend. Should they lose to the now League One side who just a short while ago found themselves in a similar financial mess but did manage to find a way out, then things would officially hit rock bottom.

I hope Pompey can escape what is increasingly looking like the inevitable, but what a cruel irony it would be if their last game ever was against their hated rivals.