DERBY FACE LIQUIDATION: ‘£29 MILLION TO HMRC’

EXCLUSIVE: Derby face LIQUIDATION unless HMRC agree to write off more than £29 MILLION of debt, prospective buyers fear... leaving club 'sleepwalking' towards oblivion



BBC

Thursday 2nd December 2021



Derby County have been docked 21 points so far this season by the EFL

US businessman Chris Kirchner is the main party interested in a takeover

But prospective buyers of Derby fear the club is in danger of liquidation

Club owes around £29m to HMRC and total debts amount to almost £60m

Derby are currently bottom of the Championship, 19 points adrift of safety

Prospective buyers of Derby County believe that unless HMRC agrees to quarter the £29million it is owed - a deal that would risk setting a dangerous legal precedent - then the club is in serious danger of being liquidated.

The club's administrators, business advisory firm Quantuma, are due to meet with the taxman this week in talks that will prove crucial to the club’s survival prospects.

US businessman Chris Kirchner has declared his interest in buying the Rams, but other parties have taken a step back.
Derby in danger of liquidation unless they can reduce £29m tax bill, prospective buyers fear


We have spoken to some of those privy to the financials of the situation and they fear the Championship club is ‘sleepwalking’ towards oblivion, and that the optimism of the administrators is not reflective of reality.

One source close to would-be investors says that a deal to buy Derby only becomes viable when the debt inherited does not vastly outweigh the value of the club, which is difficult to determine given their 21-point deduction and likely relegation to League One.

We are told it would require HMRC to reduce what it is owed to around £7.5m for a takeover to make business sense. That, it is claimed, is unlikely because of the message it would send to other EFL clubs who have outstanding HMRC bills.

Such a precedent risks others calculating that to enter administration - and make a case for having 75 per cent of their tax debt wiped off - would be worth the automatic 12-point deduction incurred under EFL rules.
Derby have been docked 21 points so far this season by EFL and are bottom of Championship

A source said: ‘The administrators say they are confident of striking a deal with HMRC, but while we do not know what that deal is, how can you decide to buy the club? You simply can’t.

‘The administrators are making positive noises, but it is in their interests to do so - firstly to maintain hope of a sale, but also because they are being paid as long as the club remains in their hands. Their costs (around £2.8m so far) are adding to the burden on the club all the time.

‘The reality among those who have looked to buy Derby is that liquidation is more likely than not.

‘As it stands, the inescapable debt is nearly £30m to HMRC, more than £29Million to MSD Holdings (US investment group) and another £10m of football debt. No buyer is going to take that on.
US businessman Chris Kirchner (centre) is eager to complete a takeover of Derby County

The only body who can convene to save Derby is the government. It needs them to get the treasury, the EFL, Mel Morris (Derby owner) and MSD around a table and put together a plan to rescue the club.'

MSD - whose loan is secured against club assets including Pride Park, which is owned by Morris - are helping to fund the administration process by way of ‘soft loans’.

A source said: ‘It is in MSD’s interests to keep Derby alive for now, in the hope of getting their money back. But they made a bad loan. There will come a time when they might think they are throwing good money after bad and walk away.

‘The administrators have to satisfy the courts that there is a realistic chance of coming out of administration. Unless they cut a deal with HMRC - who are the preferential creditor by law - they are simply kicking the can down the road.
Rams manager Wayne Rooney has grown frustrated with the slow progress of the bid

Rams manager Wayne Rooney has grown frustrated with the slow progress of the bid

The EFL will be happy enough for this to be the case until the end of the season because they want to avoid a club going under during a campaign, which opens up all manner of problems with regards fixtures that are yet to be played and potential legal cases.

‘The bottom line is, for Derby to survive, all those who are owed money will have to agree to take less. You also need the stadium included in any deal, and that means reaching an agreement with Mel and MSD.

‘There is still interest out there and people can always be talked into buying a football club - it is unique in that regard - but right now Derby just does not represent any value or business logic.’

Quantuma have been in control of Derby, managed by former England captain Wayne Rooney, since September 18.

The club have been docked a total of 21 points – 12 for entering administration and nine for previous financial breaches. That leaves them with a single point from 20 Championship fixtures, 19 adrift of safety.

The former Manchester United captain has insisted he intends to manage Derby in League One

Quantuma must also handle compensation claims from Middlesbrough and Wycombe, which taken together exceed £50m. Derby pipped Boro to a play-off place in 2019 and then stayed up at Wycombe’s expense last season.

Rooney has been steadfast in his commitment to Derby and has said he plans to continue to manage the team in League One. Yet the 36-year-old is growing increasingly frustrated. He believes progress should have been quicker in handling Kirchner’s bid to take control, especially with the transfer window opening next month.

On his Twitter account, Kirchner wrote: ‘One result doesn’t sway my view on the potential of Derby County or change my belief that a great, long-lasting club can be resurrected from its current state. The next few weeks will determine the outcome for us.’

Asked about the club’s future, Rooney said: ‘I have shown my commitment to the club and Chris Kirchner has shown his. It is difficult for the administrators and there are a few options on the table but for the sake of this club we need it done.’

So for £20m you can buy a club that will be playing League One football next season.

You could have bought us for £3m when we were on the verge of Premier football and all its riches. The Americans looking into buying Derby now would have not hesitated in buying us back then I reckon.

Many of have been saying for years this would happen unless they got to the Premier League.

They gambled big time and what's happening now is everything that a lot of people warned them about.

It's starting to get pretty frosty up in Derby right now

It's starting to get pretty frosty up in Derby right now

Yep, Fulham look like they're on a similar trajectory, promotion or bust !! They have a very rich owner but there's only so much they're allowed to put in and they are paying Prem wages to a large proportion of their players.

HMRC do not listen to weeping fans and the like.Football clubs do not warrant special treatment because like it or not they are a business just like any other and making exceptions would set a legal precedent that would open the flood gates as far as paying your taxes are concerned.If Derby cannot pay their taxes they will be liquidated and every scrap of assets will be sold to pay for the taxes first and foremost,after that the rest can squabble over anything left.

HMRC do not listen to weeping fans and the like.Football clubs do not warrant special treatment because like it or not they are a business just like any other and making exceptions would set a legal precedent that would open the flood gates as far as paying your taxes are concerned.If Derby cannot pay their taxes they will be liquidated and every scrap of assets will be sold to pay for the taxes first and foremost,after that the rest can squabble over anything left.

The first sign that this is going ahead will be a quick fire of their players worth any value. There are a number of players that will get a bit of interest there.

The next step will be the formation of AFC Derby. A football club playing in None league attracting over 20K to their games.

It's starting to get pretty frosty up in Derby right now

'Snow joke!! They have allowed their debts to snowball and now they are on thin ice with HMRC and on the slippery slope to liquidation!!

You gotta laugh at the cheating bast**rds!!

DERBY AFC

Derby County and the club's connected companies owe a combined £29.3m to HM Revenue and Customs (HMRC), according to figures released on Saturday.

The Championship club have been in administration for almost two months.





I can see two relegations

Derby Cunty AFC,
The frostiest team in football,
The world has ever seen!

So for £20m you can buy a club that will be playing League One football next season.

You could have bought us for £3m when we were on the verge of Premier football and all its riches. The Americans looking into buying Derby now would have not hesitated in buying us back then I reckon.

£3 million to HMRC, lots of debt to lots of different people and losing money every week as all the season ticket money for following season had already been spent.

Also we were ending the season with about 9 contracted players as we had so many on loan.

Derby Cunty AFC,
The frostiest team in football,
The world has ever seen!

It'll be cold comfort to them this time...!

So for £20m you can buy a club that will be playing League One football next season.

You could have bought us for £3m when we were on the verge of Premier football and all its riches. The Americans looking into buying Derby now would have not hesitated in buying us back then I reckon.

£3 million to HMRC, lots of debt to lots of different people and losing money every week as all the season ticket money for following season had already been spent.

Also we were ending the season with about 9 contracted players as we had so many on loan.

Lots of debt to lots o people?

I only recall a significant one to some guy who mortgaged us £3m. Sam debt was unsecured so it was not owed officially.

So £6m owing for a club on the verge of the Premier is cheap.

Yes we were losing money every week, bot good that. Glad we don't have that problem now 12 years later.....oh wait.

There could be a number of clubs in real financial trouble, however in Derby's case they gambled trying to spend crazy amounts of money that they did not have. The pandemic has just brought this forward even quicker. They are in the perfect storm and that storm is totally down to their own actions. I cannot see them surviving beyond Christmas.

Its a sobering thought, that even with us issuing rants against our club, at least we have not try to follow the Derby pathway.

FOOTBALL IN GENERAL IS FACING THE BIGGEST CRISIS EVER, THERE WILL BE MORE DERBY COUNTIES !

So for £20m you can buy a club that will be playing League One football next season.

You could have bought us for £3m when we were on the verge of Premier football and all its riches. The Americans looking into buying Derby now would have not hesitated in buying us back then I reckon.

£3 million to HMRC, lots of debt to lots of different people and losing money every week as all the season ticket money for following season had already been spent.

Also we were ending the season with about 9 contracted players as we had so many on loan.

Lots of debt to lots o people?

I only recall a significant one to some guy who mortgaged us £3m. Sam debt was unsecured so it was not owed officially.

So £6m owing for a club on the verge of the Premier is cheap.

Yes we were losing money every week, bot good that. Glad we don't have that problem now 12 years later.....oh wait.

There was debt all over the place. That’s a matter of court record.

Yep we are still losing money weekly and during that time we have had two runs in the premier league, have a brand new extension on our stadium, training facilities sorted, seen players we never thought we would see at the ground. We have progressed significantly. We are nowhere near the club we were then in so many ways.

Now post covid and very little income we are attempting to stabilise the club by getting rid of high earners and people like you are constantly on their back about lack of ambition. As I have said they literally can’t win.

So for £20m you can buy a club that will be playing League One football next season.

You could have bought us for £3m when we were on the verge of Premier football and all its riches. The Americans looking into buying Derby now would have not hesitated in buying us back then I reckon.

£3 million to HMRC, lots of debt to lots of different people and losing money every week as all the season ticket money for following season had already been spent.

Also we were ending the season with about 9 contracted players as we had so many on loan.

Lots of debt to lots o people?

I only recall a significant one to some guy who mortgaged us £3m. Sam debt was unsecured so it was not owed officially.

So £6m owing for a club on the verge of the Premier is cheap.

Yes we were losing money every week, bot good that. Glad we don't have that problem now 12 years later.....oh wait.

There was debt all over the place. That’s a matter of court record.

Yep we are still losing money weekly and during that time we have had two runs in the premier league, have a brand new extension on our stadium, training facilities sorted, seen players we never thought we would see at the ground. We have progressed significantly. We are nowhere near the club we were then in so many ways.

Now post covid and very little income we are attempting to stabilise the club by getting rid of high earners and people like you are constantly on their back about lack of ambition. As I have said they literally can’t win.

Where have I said lack of Ambition". I have not so stop twisting things because I disagree with your argument. As we are on the subject do you believe he has Ambition for us. Keep in mind that he has been nowhere near us for a couple of seasons now.

The bottom line with Tans reign is that we are far worse of than when he took over. Its not where you start but where you finish as the song goes. We will all be delighted if we avoid relegation this season. Before he came we were all looking at promotion.

The best squad of players we have ever had was well before Tan came on the scene. These so called players you claim we thought we would never see have not exactly set the world alight have they.

So we are getting rid of the high earners. Well who brought them in the first place?

HMRC do not listen to weeping fans and the like.Football clubs do not warrant special treatment because like it or not they are a business just like any other and making exceptions would set a legal precedent that would open the flood gates as far as paying your taxes are concerned.If Derby cannot pay their taxes they will be liquidated and every scrap of assets will be sold to pay for the taxes first and foremost,after that the rest can squabble over anything left.

Exactly as it should be! If HMRC dropped the amount, it would open a can of worms they'd never put the lid on!! I would want a reduction of what they say I owe too!! This is the price you pay, if continuing to spend large sums trying to get to the prem,and in all honesty,we could just as easily have fallen the same way if we just kept throwing cash at it regardless, I'm glad it's not us, but I've a feeling there are a few more clubs sailing to close to the wind, time will tell.

So for £20m you can buy a club that will be playing League One football next season.

You could have bought us for £3m when we were on the verge of Premier football and all its riches. The Americans looking into buying Derby now would have not hesitated in buying us back then I reckon.

The old adage"you reap what you snow" springs to mind!

Borrowing has been so ludicrously cheap for years that's skewed traditional business models. Clubs [and business] have amassed debts that they have no possibility of ever paying off - just servicing those debts is difficult, even at 1 or 2%. Tottenham are over £1 billion in debt, pretty much the same as Barcelona. If interest rates were to go up to even 2%, then they, and a significant chunk of big business are screwed.

Borrowing has been so ludicrously cheap for years that's skewed traditional business models. Clubs [and business] have amassed debts that they have no possibility of ever paying off - just servicing those debts is difficult, even at 1 or 2%. Tottenham are over £1 billion in debt, pretty much the same as Barcelona. If interest rates were to go up to even 2%, then they, and a significant chunk of big business are screwed.

Are not Man U around £800m.

I read an article about all this a few years ago and the main jist of it all is if you can pay back the interest with your operating costs then all is fine. £800m in a hundred years time will be like paying pennies back then.

What happens when Derby liquidises and freezes over, will their games be postponed?

Borrowing has been so ludicrously cheap for years that's skewed traditional business models. Clubs [and business] have amassed debts that they have no possibility of ever paying off - just servicing those debts is difficult, even at 1 or 2%. Tottenham are over £1 billion in debt, pretty much the same as Barcelona. If interest rates were to go up to even 2%, then they, and a significant chunk of big business are screwed.

Are not Man U around £800m.

I read an article about all this a few years ago and the main jist of it all is if you can pay back the interest with your operating costs then all is fine. £800m in a hundred years time will be like paying pennies back then.

That's probably true, but only if interest rates remain close to zero. No government would currently entertain even increasing base rates to 1 or 2% because of their own debts, but if inflation hangs around for a while, raising interest rates is the only tool in the box. We're currently in a big, viscous circle.