In contrast to the fate of Glasgow Rangers, the CVA proposal by the administrators for Portsmouth FC, has been approved with the unsecured creditors getting approximately 2p in the £1. HMRC voted against the CVA which is usual in football cases. To see why read our page on the football creditors rule. However, overall the proposal was approved by 95% of the creditors.
The company voluntary arrangement is based on an offer from former owner Balram Chainrai's company Portpin. Portpin is offering to settle outstanding wages for part-time club employees (prior to it entering administration), and debts owed to charities as well as small local businesses owed less than £2,500.
So what next?
The Company Voluntary Arrangement was approved but with modifications. The modifications can be insisted upon by the creditors and these were that the administrators had to continue to negotiate with other parties interested in making an offer. The Pompey Supporters Trust had tabled an offer last Friday and the administrators at PKF are due to meet them this week. Another condition of the CVA proposal was to restructure the players cost base.
Of course, all CVA proposals have conditions that need to be met and cutting costs to improve performance is a sensible and necessary one.