Torquay United Fans Forum

The full document can be down loaded from the link below,

https://find-and-update.company-informa ... ng-history

The Statement of the Administrator's proposals which has been filed but not yet accessible over the website will give greater information as to what the actual position is and the potential terms of any CVA that is being proposed. It should make interesting reading and enable everyone to know quite a lot more than is known at present.

From what occured at Southend last season, when they were under an embargo was that they could not re-sign contracted players on a contract. They were allowed to sign players on non contract terms to create a squad of 15 or 16 players.

Until the embargo is lifted the squad will not be larger than 15 or 16. There are also strict rules on signing replacement players to cover injuries and suspensions.

The first question is which division the club will be in next season. On a purely points basis this is addressed on other topics. Whilst it has been mentioned briefly elsewhere, the question of whether National League requirements for membership can be satisfied by the time of the AGM. The NL will probably require either the club out of Administration, or a potential purchaser close to completing a transfer of ownership on acceptable terms to the league. With about two months to the AGM time is not on the clubs side.

The next issue is funding the club through the close season. Traditionally, clubs survive the summer on a cash flow basis from the sale of season tickets and sponsorship. How many people will buy season tickets not knowing if the club will actually be playing next season? Whilst some will, some will not. The same applies to Sponsorship deals. This is an even greater problem with the club being in Administration. There is no cash pot or owner to plug the cash flow gap.

Forming next seasons squad will be problematical. The transfer embargo is in place and probably will not be removed until a sale has completed. Southend went through last summer under a transfer embargo and were not allowed to even re-sign players whose contracts had expired. I believe the league rules only allow you to form a squad of 15 or 16 with those under contract and non contracted players who are on seven days notice either way. How many players will agree to come to Torquay on that basis?

All these issues can be overcome but will be a considerable effect on next season before it even starts. Quite frankly, simply being in the same division with new owners at the end of the 24-25 season is the best that can be hoped for.

As some will notice, this is my first post. I am not a TUFC fan but am a non league football fan. I am not here to gloat as it is not good to see any club in trouble and the people who suffer the most emotionally are the fans, who like me want no more than a team to support and an enjoyable match day experience.

My reason for registering for the forum was that I have experience of dealing with football clubs in an insolvency process and the National League when one of the member clubs enters an insolvency process. Firstly dealing with the administration, I can only imaginem some severe cost cutting by the Administrators. Any debts incurred during the administration rank as a first charge against the receipts in the administration. They rank before any fees due to the administrators, as administrators like to get paid, they are unlikely to be prepared to see the losses continuing on the scale that they have been.

In an administration, the administrators have 14 days from the date of their apppointment to decide which if any employment contracts they adopt. If they continuing employing an individual beyond the 14 period, the payment of wages becomes an expense of the administration as against an unsecured claim. I personally would expect a number of staff, including playing staff to be let go within the next 14 days.

For a football club this is the worst time of year to enter administration. Revenue is about to dry up with only two home games left this season. Football clubs normally get through the close season from season ticket sales and sponsors paying a sizeable chunk of the sponsorship money. Due to the uncertainty of how the club will come out of Administration most sponsors are not going to pay the until this is resolved. Season ticket sales are also problematical. Will people buy a season ticket not knowing where or indeed whether the club will be playing next season. Often card companies will not release the season ticket money, where the payment was made by card, to the club due to the risk of them being liable for charge backs if the club fails to fulfil its fixtures.

Whilst in theory the administrators decide who to sell to, due to the football authorities requiring all debts settled or an agreement with the creditors before sanctioning a transfer of ownership, this alters the position quite dramatically. From what I understand CO is the largest creditor by some distance. If he is not agreeable to doing a deal on his debt with a potential purchaser, the transfer of ownership will not be approved by the FA or the league. This means that often the only purchaser the administrators can proceed with is the one that offers CO the highest percentage of his debt.

The next problem is the National League who are tough to say the least in this situation. There first concern is to have 24 teams in each of the three divisions complete the season and not fold during the season. At the very least they normally seek a bond being given to the League to enable it to make good any loss to clubs by losing a home fixture ot travelling to a game, whose result is later expunged. Any bond is likely to be approaching, if not in excess, of a 6 figure sum. Who will pay this bond?

If the club does not meet any requirements laid down by the league, the likely outcome is expulsion from the league. Throughout the football period leagues seem keen to pass the problem of financially troubled clubs down to the next level below. Expulsion from the league, if is going to occur will occur at the AGM. The options are therefore to get a deal completed and approved by 19 June or find the money for a bond by 19 June. Getting any sale approved by that date is nigh on impossible. From my past experience Southern League football, or no football, arethe most likely outcomes.

Hopefully, a deal is virtually done in principle. This at least gives the club a fighting chance of avoiding expulsion from the league.