Portsmouth Seeks Bankruptcy Protection Again, Official Says
English soccer club Portsmouth will lodge a petition today to enter bankruptcy protection for the second time in two years to pay its players and creditors, its administrators said today.
The team has been run by accountants UHY Hacker Young since parent Convers Sports Initiatives Plc entered administration, a form of bankruptcy protection, on Nov. 29. CSI, a U.K.-based investment vehicle used by former owner Vladimir Antonov to buy Portsmouth, defaulted on an interest payment to former owner Balram Chainrai.
Creditors include electricity suppliers that have threatened to cut the team off, UHY’s Peter Kubik said in an interview.
It may take “a few days” for the courts to formally accept Portsmouth’s move into administration, Kubik said today. Portsmouth’s accounts were frozen earlier last month by tax officials, leaving players and coaching staff unpaid.
“During the last week it’s been very difficult to trade,” Kubik said. “Administration would allow us to get the bank account unfrozen and pay the electricity board, who’ve constantly been threatening to cut us off.”
Antonov is fighting extradition to Lithuania where he and a business partner are facing fraud and embezzlement charges linked to about $1.6 billion missing from banks he controlled there and in Latvia.
Portsmouth has unsuccessfully been searching for its fifth owner in less than two years. It was demoted to the Championship in May 2010 after becoming the first Premier League team to go into administration. The club will face a 10-point deduction for entering administration.
The move may tempt potential buyers to take the club at a discount, Kubik said. He said Chainrai, who deferred payment for the club following its 17 million pound ($27 million) sale, would be lucky to get some of his money back. Chainrai agreed to CSI’s request to defer the payment for the club for two years and imposed an interest rate of about 8 percent on the new owners. Antonov is another creditor. He’s loaned the team 10.2 million pounds.
To contact the reporter on this story: Tariq Panja at tpanja@bloomberg.net
To contact the editor responsible for this story: Christopher Elser at celser@bloomberg.net
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