Football League updates insolvency policy

Football League updates insolvency policy
The Football League has decided that any club in the Football League which goes into administration will receive a 12 point Sporting Sanction—an increase on the current penalty of ten points—after clubs approved changes to the League’s insolvency policy.The League’s insolvency policy is intended to help manage any club which suffers an insolvency event. The changes are intended to strengthen a number of key principles while also maintaining the rescue culture which gives clubs the opportunity to continue in league football and restructure their finances.
Changes to regulation:The Administrator, once appointed, will be required to market the club for a period of at least 21 days, and must meet with the club’s supporters’ trust during this time to allow it the opportunity to bid for the club.

The requirement for the purchaser to achieve a Company Voluntary Arrangement (CVA) has been removed. This means the club’s share in the Football League will be transferred to the Administrator’s preferred bidder, subject to their compliance with the League’s other requirements.

The League anticipates this change will provide greater certainty the club will be able to continue, as well as reduce the insolvency period and associated professional costs. It will also prevent the club’s previous owner controlling the administration process, as in some cases they may be the only party able to achieve a CVA.

The purchaser will be required, on exit, to pay a minimum of 35 pence in the pound over three years (or 25 on transfer of share) to creditors, or face a further deduction of 15 points at the start of the season after the insolvency event.

Source: Press Release: Football League clubs focus on the future

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