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Friday, 16 July 2010

Portsmouth City : CVA suffers section 6 application by HMRC

The sorry tale of the company voluntary arrangement for Portsmouth City continues.

Further to my blog of 17th June (Portsmouth CVA approved but only just ) the HMRC chaps have mounted a section 6 Insolvency Act 1986 appeal against the CVA. As we said the HMRC vote was allowed at £37m at the creditors meeting the CVA would have been rejected. If the court finds that there was a material irregularity at the meeting, then the Court may order a new creditors meeting or any order it sees fit.

So the administration continues and there will be a hearing in due course. Indeed the club's administrator Andrew Andronikou, who had been anticipating HMRC's appeal, warned the case may not be heard until October or November.

HMRC has argued that £13m of debt was left out of the original calculations; if the £13m figure is included, says the HMRC, it would then have more than the 25% of the debt it needed to block the CVA.

"We are acting in the interests of all those creditors who are not in the football industry. We don't think it's right that they are offered 20p in the pound against full repayment all others," an HMRC spokesman told BBC Sport.

"HMRC feel we have been or will be unfairly prejudiced by the decision to accept the CVA, because we believe there were material irregularities in the way in which the votes of creditors were counted at the creditor meeting and because, to our knowledge, the full amount of our claim should have been admitted for voting purposes.

"Also we cannot agree with the striking out of £13m of debt which seriously undermined our ability to challenge the CVA."

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