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SBD Global/August 5, 2013/Franchises

Coventry City Faces Liquidation After CVA Deal Rejected By Stadium Owner

Coventry City faces liquidation after Ricoh Arena owner Arena Coventry Ltd. rejects offer.
The future of League One side Coventry City "is uncertain after a proposed company voluntary agreement was rejected, leaving the club to warn that its parent company faces liquidation," according to Roger Blitz of the FINANCIAL TIMES. The immediate prospect for the club "is a 10-point deduction at the start of the season, which begins on Saturday." At a meeting with the club on Friday, the Football League "agreed to allow City to retain its league status in 'exceptional status,' but docked the club 10 points." The league said that "it hoped the warring parties could strike a compromise to allow the club to continue playing in the city" (FT, 8/2). In Coventry, Les Reid reported a crucial Coventry City creditors' meeting "ended in ten minutes" with Ricoh owners Arena Coventry Ltd. "rejecting proposals to exit administration." The club is now moving toward liquidation. ACL's rejection of Coventry City administrator Paul Appleton's Company Voluntary Arrangement, which "would have brought the club out of administration," means ACL will not get a £590,000 ($902,000) return on the Sky Blues rent debt (COVENTRY TELEGRAPH, 8/2). Also in Coventry, Alan Poole reported ACL "launched a bitter attack on Sky Blues owners Sisu and the Football League." The statement read, "There are many more questions to be asked now of both the Joint Administrator Paul Appleton and Football League itself. That both these parties appear to have been complicit in allowing a company which has refused to pay its debts and fallen into administration, to then buy itself back with little or no consequence, beggars belief" (COVENTRY TELEGRAPH, 8/3). In London, Oliver Kay opined Eamon Dunphy describes in "Only A Game?" the first day of a new season as "a very special day for football people." When "small children lie restless in beds dreaming of the conquests they and their heroes will make" and when "their dads, pints in hands, talk cynically in pubs [. . .] but in a small corner of their hearts they too nurture a dream that this will be 'our year.'" No Coventry supporter thinks "this could be their year." Their summer "has been spent fretting about Mayfair-based hedge funds, administration, transfer embargos, a 68-mile round trip to home games" and, as of Friday, "the liquidation of Coventry City FC Ltd. and a ten-point deduction that leaves them with a serious handicap before their League One campaign even starts away to Crawley Town this afternoon." With "apologies to Steven Pressley and his squad, this will most definitely not be their year." Friday "had been described as D-Day for Coventry." In fact, "as supporters of Portsmouth and other imperilled clubs of late will testify, it was just another milestone on a road that feels as if it is leading to oblivion." Relegation, administration, relocation, liquidation. Friday was not the end, but "it was another black, bleak day." Where "does the blame lie at Coventry? Everywhere." The malaise "can be traced back not just to the financial excesses of previous regimes but to the astounding failure to account for the possibility of relegation to League One and a sharp drop in income" when agreeing to pay £1.28M ($2M) a year in rent at the Ricoh Arena. The "deep suspicion directed at the hedge funds that have owned Coventry" -- first Sisu and now Otium Entertainment Group, another arm of the same company -- "has proved very well founded as the club have drifted into crisis on and off the pitch" (LONDON TIMES, 8/3).
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