Bolton Wanderers have been subject to a winding-up petition made by HM Revenue & Customs (“HMRC”) last December, 2015. The club is said to owe HMRC £2.2m and the club’s inability to repay this debt was the reason for the petition.
The hearings listed in relation to the petition have now been adjourned for a third and final time. The matter is now to be heard on 21 March 2016. The adjournments have been provided so as to allow the progression of a purchase of Bolton Wanderers by Sport’s Shield Group. This purchase is headed by ex-Bolton striker, Dean Holdsworth.
In a bid to raise funds, Bolton have sold their training ground and car park. But it was the development of the club’s sale which has allowed for a further adjournment. This is with the intended purpose of allowing Holdsworth additional time to deal with the unpaid tax and VAT bill further to evidencing that a takeover agreement was being negotiated.
The club are in debt of £172.9m. The hope is that the sale of the controlling interest in the club will prevent the club being wound up. In a recent statement made by the club, “the board would again like to thank all staff at the club for their loyalty and unfaltering commitment to the cause through this incredibly difficult period.”
The club have since confirmed the completion of the sale to Sport’s Shield Group.
Facing a winding-up petition may have spurred on the sale of the club, but it will have certainly added additional pressure. It poses the question, when should the presentation of a winding-up petition be considered?
It is at the start of the winding-up process that the winding-up petition is presented to the Court. Namely, the petitioner is beginning proceedings so as to have the company involved placed into a Compulsory Liquidation. There may be very serious consequences from presenting a winding-up petition; they may be with respect to the following:
- Dispositions of company property are potentially void where they post-date the petition and where the company has been wound up by the Court.
- There may be substantial damage done to the commercial reputation of the company.
- The company may experience difficulty in obtaining credit whilst the petition is in place.
- There will also be costs to consider regarding the legal action of dealing with the winding-up petition; both potentially in terms of legal advice and instructing the attendance of solicitors or counsel for the hearing.
Section 122 of the Insolvency Act 1986 outlines the circumstances in which winding-up petitions should be considered. The statute confirms that a company may be wound-up where:
- It is resolved by special resolution that the Company should be entered into Compulsory Liquidation.
- The company is unable to pay its debts as they fall due.
- The winding-up of the company is found to be just and equitable by the Court.
If you need legal guidance on an insolvency issue, feel free to contact our Corporate Commercial team through myself on 01908 660966 or by email at Christopher.Buck@franklins-sols.co.uk