Monday, 18 March 2013
Dumfermline in possible administration move
The directors of Dunfermline Athletic are very close to putting the company into administration.
The move would mean a points penalty for the first division team, but would mean it does not go into liquidation. HMRC have issued a winding up petition over a tax debt of some £134,000. It has yet to be advertised but is likely to be done so on the Tuesday or Wednesday.
Negotiations with The Pars Community (TPC), a collective of supporters who wish to buy the club, broke down on Friday.
However, there are potential complications to the directors' plan. An administrator can be appointed before the winding up petition is served, but after that the court would need to be persuaded that administration is a better outcome for all concerned. HMRC would also have to agree to withdraw their petition. Once the club is in administration there would be a protection against any further creditor action.
Dunfermline have serious cashflow problems; Only 60% of the players' wages were paid last month, and the March salary has yet to be paid. Gavin Masterton, who is the majority shareholder, also owns East End Par Ltd, which owns the stadium but it is in debt to Lloyds Bank. Dunfermline owe £8.4m, much of it to directors, with £450,000 owing to business creditors.
It may be possible that the TPC will be best place to buy the club out of administration but they will need to pay for the stadium as well. This might be too much.
Watch this space!