Coventry City FC Ltd is set to be liquidated on the eve of the 125th anniversary of the Football League. The CVA to bring the company out of administration was accepted by the secured creditors of companies controlled by SISU along with the Higgs Trust, but rejected by both HMRC and ACL, the clubs landlords at the Ricoh. As no consensus could be found, the company will now be wound up. Further investigations into the company and the club look set to continue under the liquidation process and a 10 points deduction has been imposed on the club by the FL. For once, the fans that remain loyal to the team regardless of ownership can be grateful for the complex group of companies that form the structure behind the club, as this will no doubt ensure the club can commit to starting the season. The sale of assets from CCFC Ltd to Otium Entertainment Group, the Administrators preferred bidder for the company, has been agreed if not already completed, and the Football League have made it clear they will raise no objections and have transferred the golden share to Otium which allows club can participate in the league in the forthcoming season. That sale did not include the lease agreement between the club and ACL, nor the players registrations.
The players contracts apparently now reside in CCFC Holdings Ltd – a position consistently proposed by Tim Fisher, CEO of Holdings and Otium, and confirmed by Paul Appleton, the Administrator, so it is likely the club can field a team as a precedent was set at some point last season under similar circumstances. The Football League have thus far raised no objections to the separation of the Golden Share from the players registrations. Although part of the same group, the regulations forbids third party ownership but this situation has not worried the governing body. The FL rulings and actions have been shown throughout the process as always being open to the discretion of the board, which effectively renders the statutes meaningless. According to the most recent financial records submitted to Companies House, the players registrations are recorded in CCFC Ltd. Fisher and Appleton have declared that this was never the intention. A document has come to light that appears to suggest the board in May 2008, shortly after SISU took control, intended the club to split in the manner reported in the documents submitted to Companies House, directly opposing Fisher’s interpretation. Two individuals who were part of the board at that time and who continue to be associated with the club and have appeared regularly in press reports during the administration process have yet to issue any information on this core issue. One is Garry Hoffman, , the other Joe Elliot.
Hoffman has an impressive CV. He is currently CEO of Hastings Insurance Group, but has held the Vice Chairmanship of Barclays PLC and also been the Chairman of UK banking and Barclaycard at the bank. Barclays was one of the only major banks that did not require a government bail out during the crisis. The bank was exposed but opted instead to accept investment from the middle east. Bankers on the whole have not come out of the situation with untarnished reputations as a collection of people – Barclays was part of the PPI mis-selling scandal. Hoffman then took over the ailing Northern Rock shortly after the crash, staying for two and half years, but on his departure waived his contractual rights of a pay-off in the region of £500,000. Hoffman, a lifelong city supporter, was Vice chairman of CCFC Ltd before quitting in February 2011. He joined the board in February 2008, shortly after the takeover by SISU took place in December 2007.
Joe Elliott is also a successful businessman, setting up and running Elliot’s Motor Spares, a well known independent retailer in the city and became involved in the club in the 1980’s. He was appointed to the board of CCFC Ltd in December 2002 and was chairman at the time of the takeover by SISU. He left the board in December 2010 but then took on the role of life president. Elliott was forced to stand aside by SISU from this post after details emerged of his role in assisting Hoffman to bring ‘fresh investment’ to the club in June 2011, before formally resigning after details of the groundshare at Sixfields emerged this close season. The Sky Blue Trust described him at the time of his resignation as ‘Sky Blue through and through’.
Elliot had initially welcomed the takeover by SISU back in December 2007, regarding the Caymans island registered hedge fund as the ‘saviours’ of the club. His opinion over the proceeding six years has changed dramatically, becoming particularly frustrated at the policy the club was following regarding the sale of talented, key players in the squad. More recently, Elliot courted the US businessman Preston Haskell IV, who has interests in construction in the Democratic Republic of the Congo, and advised the property developer on his unsuccessful bid submitted to the administrator to take CCFC Ltd out of administration. All of the bids were submitted even though the administrator had declared in his initial report that he was uncertain of what assets existed in the company due to the ‘confusion’ over which company was trading as the football club. SISU as incumbents were obviously at a significant advantage here. But Haskell had Elliot and Hoffman to potentially provide details and, as they made no secret of their associations, it is fair to assume that he would have been advised of which company was set up to be the football club when it was agreed.
Elliot as chairperson at the time of acquisition would have been well placed to map out the structure of the companies to SISU at the time of purchase. If this had been altered at any point since the takeover up until the decision for him to step aside was made, Elliot would have had to be informed in his role as a life president, if he was not actually present at the board meetings when it was discussed and voted upon. Fisher as a later addition would not have been present. Elliot and Hoffman must know something and yet are remaining very tight lipped. If Fisher’s interpretation contrasts so starkly with the intentions of the board at that time, what could be stopping them? Are there non-disclosure clauses in their contracts that places restrictions upon topics they are permitted to talk about? Was a decision made at some point to blur the boundaries between the two entities?
One of the first actions the administrator undertook on engagement in March 2013 was to submit a change to the Memorandum and Articles of Association adopted by the board in December 2011. The change related to CCFC Ltd but was signed by on behalf of CCFC Holdings as the parent company. Fisher had recently joined the board, Hoffman was still a director and Elliot may have been present at the meeting in his role of Life President. At this point, both companies had very similar objectives, even if the new resolutions had not been submitted – both could engage in the business of a football club – article b) for CCFC Ltd and c) for Holdings. Holdings primary objective was to act as an investment holding company – article a). CCFC Ltd’s article a) was to own and operate football stadia and sports grounds. Were the objectives deliberately blurred with a purpose of using it to their advantage should the need arise. Perhaps SISU inherited a system designed to obscure.
The independent claimed in 1995 that illegal payments were regularly made during transfers of players, suggesting that ‘bungs had long been part of British soccer’. George Graham had been found guilty of accepting £400,000 during the transfer of two Scandinavian players in 1991. An investigation into the transfer practices at Nottingham forest during the 1990’s had found the evidence ‘pretty strong’ against the then manager, Brian Clough. Who knows how extensive the practice was in the game at that time. One of the directors who funded the club through substantial loans during the final years of the premiership was the Labour party donor Geoffrey Robinson. It was Robinson who loaned funds interest–free to Peter Mandelson which resulted in his resignation from the cabinet in 1998 after failing to declare the agreement to the Commons and to his mortgage company. Both were instrumental in the rebranding of New Labour which placed emphasis on the concept of PFI and its ability to shift liabilities off balance sheet, thus disguising the levels of borrowing. The arrangement over the construction of the stadium mirrors this model – the infrastructure is put in place but the costs remain external to the club. If any similar behaviour such as this, or deals similar to those conducted by the banks was replicated at the club, what skeletons lie in the cupboard for any of those involved at this high level? Has the behaviour of former directors and chairmen, and their have been many in recent years, influenced the decisions by Hoffman and Elliot to remain unusually quiet on a subject that has dominated the process. Had either publicly questioned the interpretation of Fisher and Appleton as to which company was the football club, if they were in possession of the truth, then perhaps the liquidation could have been avoided. Direction could have been given as to where answer lay, but for some reason was never given. One of the objectives of a Liquidation is to be a detailed investigation into how the company came to fail. Fisher and Appleton have suggested that things have been ‘in a mess’ for some time. Just how messy is that cupboard with the skeletons likely to be?