Macclesfield Town Silkmen finally unwound over unpaid debts
The Silkmen owed HMRC £190,000 as well as £173,000 to former manager John Askey and several other creditors.
Club owner Amar Alkadhi had asked the Judge for a further eight-week adjournment to secure a sale but the patience of the Insolvency and Companies Court finally ran out during their twelfth appearance before it.
The winding-up petition, which began in January 2019, was scheduled to be heard once again after Alkadhi claimed that a sale to Mr Robert Benwell was at an advanced stage.
The court heard that Mr Alkadhi had made an offer to pay an initial £20,000 to HMRC and had provided evidence of £1.1 million in funds to show that creditors would be paid in full in the form of a screenshot of a bank statement.
Presiding Judge Prentis said he would grant a compulsory order having seen no evidence of the club’s ability to pay its debts and that Mr Benwell, who had previously tried to purchase Bury FC, had not provided a business plan for the club should he have taken over .
The 147-year-old club and former FA Trophy winners were relegated from League Two of the EFL into the Vanarama National League at the end of last season in acrimonious circumstances as the league voted to end the season early as a result of the Coronavirus pandemic.
They were bottom of the league on 19 points after suffering a six point deduction following non-payment of players wages in March.
Prior to this, the players went on strike in November for failing to be paid which saw the club field a youth team in an FA Cup defeat to Kingstonian.
They were also deducted points on three separate occasions for failure to fulfil league fixtures against Plymouth Argyle and Crewe Alexandra.
This punishment led to their points-per-game total used to calculate the final league table being lower than nearest rivals Stevenage Borough which gave them a reprieve and relegated the Silkmen back to the fifth level of English football for the first time since 2018.
Bromley were scheduled to be their first National League visitors when the division kicks on on Saturday October 3rd but the division might now have to begin with 23 clubs instead of 24.
Chris Horner, Insolvency Director with Business Rescue Expert, said: “Our Football Without Fans research has already shown how precarious the finances are for EFL and National League clubs without matchday income from fans.
“Macclesfield could have taken just under £50,000 in match day income, so by losing five home games in 2020, nearly £250,000 hasn’t come into their account.”
“While there have clearly been extraneous factors regarding the proposed sale of the club and repayment of creditors, it’s still surprising that a court took so long to make a final decision and not to grant another extention.
“It also shows that while specific provisions and protections given to businesses as part of the Corporate Governance and Insolvency Act 2020 offset some creditors recovery activities, these are only temporary and won’t protect a business against bad practices that have had nothing to do with Covid-19.
“Macclesfield Town’s case shows that the material circumstances for clubs outside of the Premier League hasn’t changed since the end of March and with fans still not returning to games in any significant numbers then things may be about to get worse – especially if creditors and the courts attitudes to outstanding debt are hardening.”
Football clubs and businesses have always been able to ask judges and courts for more time to pay creditors and avoid winding-up petitions.
They are usually granted – until suddenly they aren’t. It’s the final whistle for any company unfortunate enough to be in that situation.
Don’t rely on precedent or previous goodwill because if conditions have gotten tougher for your company in the past six months, they will also have gotten tougher for your creditors too.
We can help determine how critical your situation could be and act quickly to give you genuine breathing space and a realistic restructuring and rescue plan that will carry more weight in court than a simple screenshot.