Can the directors change their tactics in time?
The club owes debts of over £600,000 to Blitz’s company Brassbank and the club are due to attend a hearing scheduled for this afternoon. This morning the club were facing a winding-up petition in the High Court brought by HMRC for unpaid tax debts in the region of £70,000 which may or may not already have been set-aside at time of publication.
The Oldham Chronicle reports that a potential administrator has already been approached and Mr Blitz is keen to continue to provide backing through the administration process.
The Football League deadline for imposing points penalties is March 26th although any penalty incurred after this date would see the team begin next season on minus points as Bolton Wanderers did this season.
Going into administration currently incurs an automatic 12 point penalty which would effectively see the Latics relegated from the Football League for the first time since their acceptance in 1907.
The club is currently operating with only three stands open on match days as the local council has closed the North Stand over safety concerns so further financial intrigue is the last thing they’d want.
It’s been a bleak year for North West football clubs with Bury going into administration and being expelled from the league, Bolton’s points deduction effectively guaranteeing them relegation to league two and Macclesfield Town facing winding-up petitions after staff had been paid late for the fourth time this season.
Panic for the Latics?
Oldham owner Abdallah Lemsagam, a former players agent, took over the club in January 2018 and saw them relegated in his first season in charge. He hired former Manchester United great and Oldham native Paul Scholes to be manager in February 2019 who later resigned only seven games later claiming he had been mislead.
Lemsagam later alleged that he was making a complaint to Greater Manchester Police regarding the financial conduct of former owners including Simon Blitz regarding grant money from Oldham Council towards the building of the currently closed North Stand.
Blitz, a US based entrepreneur, claims that the club owes £200,000 for the rent and a further £330,000 for an unpaid loan with late fees and interest accruing further debt daily.
The club accepts it has not paid rent and under the terms of the loan Blitz has the right to appoint an administrator.
There’s claim and counterclaim between Lemsagam and Blitz regarding various land and property deals involving the club and the local council which the hearing may shed more light on but the clear and present danger facing the club relates to it’s self-admitted rent arrears.
Chris Horner, Insolvency Director with BusinessRescueExpert, says it’s quite unusual for a business to face an administration order under such circumstances. He said: “When an unsecured creditor is pursuing a debt, they will generally seek a winding up petition. An administration application from a creditor is a more complex request.”
“Usually, as the club is already subject to a winding up petition from HMRC, the landlord could have sought to be attached to this petition or to support the petition. The administration application however means they have brought their own separate action, which could prevent the winding up petition.”
“In addition, with an Administration Order, the creditor is able to nominate the insolvency practitioner(s) who will act as administrator. With a winding up petition, the Official Receiver will be appointed in almost every case.”
Heading into injury time
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