Didn't Peter Hood say yesterday that its the norm to keep 10% cap space free for the unexpected?

Must be true then...

The administrator at Wakefield did not sell the players straight away. My (limited) understanding is the administrator makes an assessment of the business as a potential going concern (in the Bulls case, the turnover, the contrcats it holds with Sky, sponsors etc) and try to find a buyer for the company. Normally what would happen is they would sack everyone who was cheap to sack and had no 'sell on' contractual value and try to hold as much value in the company as possible for as long as possible.
This obviously requires cash but what's emerging from the Bulls is that the club are only borderline insolvent. Craven speaks of owing the bank 150k and the tax bill 'looming'. The accounts show wages at approx 200k per month.

Does anyone know what the tax bill is or whether it's even arrived? Apparently we need a £1million but there's certainly not been a winding up order which if I remember, Wakey had two. Do we have other debts? It's all very odd.

I've already given some indications of what the tax "bills" are - three different sorts, in fact (VAT, PAYE, retrospective PAYE etc on image rights etc).

I don't know any of the actual numbers (and if I did, unless authorised I would not post on here - this is commercially-sensitive info) other than an idea of one. But I can make some guesses and deductions. As I said before, I understand the PAYE is a month or so late (due presumably to what has already happened) but the other taxes are not yet due - but fall due in the coming next verty few weeks. I also understand (not from the club) that HMRC are now so sick and tired of sports clubs using them (us - the taxpayer) as a bank, and then falling over (Rangers was the last straw, I gather) that they are now extremely robust in threatening winding up if taxes are only a little overdue. The club told me that HMRC seems to have become much more aggressive in pursuit of overdue liabilities recently, which backs that up.

I think it will be a bit more than "borderline" if they don't plug the holes left by repaying the RFL and the bank (I suspect that amount quoted will continue to reduce, but have no specific numbers), since the cash position was tight before. Once you go under, liabilities crystallise and assets evaporate, as any insolvency practitioner will tell you. And as I can vouch for from my own experience both working for IPs and dealing with failed customers (as well as once being the FD of a small plc that came perilously close on its own account). Sadly, its a field I have quite a bit of experience in

As for the future income streams, most will be voidable in the event of insolvency. The administrator would need a clear idea pretty quickly of what income he could rely on. SPonsorship? Unlikely. Sky and RFL money? In the hands of the RFL (see Craven's artiocle in the YP today). Gates? Who knows. And so on. Bulls have considerably larger income from commercial sources than Wakey, as I understood it, so are much more vulnerable to loss of immediateb incopme in an insolvency.

To me, the only thing that is odd is why there is not more of the RFL lease settlement money left. Otherwise, it does pretty reasonably stack up as to why we are where we are. But its my field, don't forget. The club really IMO should have been more forthcoming in layman's language regarding some of the specifics. Craven's piece in the YP today goes a little of the way towards that IMO.

I know from experience they can be extremely aggressive but the club are saying friday could be our last match but there's no winding up order.

No, there is not.

But the directors will, I suspect, have to make the decision by the end of this week as to whether the club can continuie as a going concern, and is solvent. If having taken suitable advice, they conclude the club is insolvent, they have to take steps immediately. Not next week, not next month, but immediately. That is the law. Otherwise, they risk becoming personally liable for the company's debts, because of "trading whilst insolvent".

I would not be surprised if the directors applied for administration next week, if they cannot satisfy themsleves that there is cash there to contuinue trading. And, as soon as an administrator is appointed, its up to him what happens next. Whether any of this would happen before the Hudds game, I'm not sure given its the Easter week, but I WOULD expect events to move quickly if the campaign is not a success.

That is all my supposition, btw - in case anyone thinks I might be party to any inside info. I am most definitely not.

This might sound like a dumb question, but of what possible benefit is it to the HRMC to get clubs sent into administration? They will not get their money either then will they?

No, but then the club won't owe them any more than they already do. 'Cutting their losses' I guess.

Obviously, as if there was, we wouldn't be having this conversation. Before you get a winding up order you have to have a petition, it has to be advertised, and there has to be a meeting of creditors. In most cases the day the petition is advertised is armageddon, as then bank accounts are frozen and you can't then effectively trade anymore.

I have no clue if anyone has issued a winding up petition against us, or whether anyone has served us with a statutory demand. I don't think there's a petition, wouldn't be surprised if a stat. demand, but that's based on nothing except what I've read in the press, and nobody denying it, or explaining the relevance of the tight timescales, which suggest strongly there is some sort of deadline date or other.

The Revenue don't put clubs into administration. The club or its mooted new owners do that. HMRC would usually need to be outvoted for the creditors to agree to the administration.

Having said that, HMRC seem to take the view that it is preferable to cut their losses, although only very recently (within the last 2 years or so) they actually got round to setting up some sort of mini-department to try to "help" struggling businesses. Adey may know whether they actually ever do.

Yes. They do.

But not sports clubs. Had their fingers burnt far far too many times.

Petitioning for winding up = liquidation, not administration. Oblivion.

In the old days, pre-Enterpirse Act 2002, when theyn had Crown Preference, they ranked as a preferential creditor and so were far far more relaxed about allowing trading receivershiops and administrations. They got paid before the bank's debenture, let alone joe creditor.

The Enterprise Act helped the prospects of insolvent businesses by effectively killing off over time the ability of a debenture holder to appoint a receiver. But, law of unexpected consequences, removal of Crown Preference means HMRC are an unsecured creditor now, same as joe ordinary creditor. So they often feel they stand to lose more in the event of an administration (since available funds are targetted more towards saving the business as a viable entity) than in a liquidation (when more funds may make their way to the unsecureds).

Don't understimate the power of HMRC to destroy a sports club. Once they petition, things happen pretty quickly.

I actually don't disagree with them. It's got to the stage where fans of various clubs just see the "administration" as a couple of days blip before business carries on as normal. Fans really aren't interested who got screwed.

But I'm assuming HMRC only can't stop these sort of sports pre-packs where they don't have a voting majority?

Usually, yes, since (as I understand it - you legal types will know) the High Court will be reluctant to grant a winding up order, or will issue a stay, if the club defends by saying it is shortly to petition it for an Administration Order.

And, once an Administration Order is granted, then any winding up petitions cannot proceed anyway.

If HMRC has a voting majority at the ensuing Creditors' Meeting, it could seek to have the company wound up. But, by the time the meeting is held, the prepack is all done and dusted so the assets have long gone out of reach.

I can't see anything happening before the Huddersfield game due to the bank holidays but you would expect things to have moved on before Doncaster are due at Odsal. I imagine the date set had a couple of days leeway with the easter weekend in mind.

If the pledge total was at 350-400K by saturday morning do you think the club will still ask for the money or is it really 500K or nothing?

No idea. Not seen their forecasts, and do not know how much leeway they might have since there will be loads of other variables - not least how much they take on Friday and before.

I'd be reluctant to bet the club on there being that much leeway, tbh.