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Trust Seeking Solution

Batchelor backtracks

Less than 24 hours after John Batchelor announced that he would transfer 100% ownership of the Club to the Supporters Trust, he has reverted to a position of seeking to retain a shareholding. In addition to holding on to 24% of the shares, Batchelor is now also seeking agreement to certain conditions, not previously discussed with the Trust, regarding an ongoing role for himself at the Club.

Trust representative Steve Beck expressed his frustration about the situation:

The Supporters Trust is continuing to work damn hard to try and provide our Club with a sustainable future. Not just for the sakes of the fans and the community, but also for the staff at the Club who face a very difficult time at present.

Following discussions, over several days, with Batchelor about the future of the Club, Trust representatives had been somewhat surprised that Batchelor chose to make a unilateral announcement on the Bootham Crescent pitch at half-time on Tuesday night. The following day (Wednesday 27th November), having sought clarification of Batchelors latest stance, it became apparent that the goalposts had moved again since his on-pitch announcement.

As a result, Trust representatives will again seek to move towards completion of an agreement at the earliest opportunity, whereby ownership and control of the Club moves from Batchelor to the Trust. In the absence of any other parties stepping in, the Supporters Trust remains the only alternative that may have a chance of saving York City Football Club.

As reported in yesterdays Evening Press, on Wednesday 27th November, at the request of the Club, Trust representative Steve Beck attended a meeting at the Club. Together with the Clubs Chief Executive Keith Usher, Steve Beck explained to the staff the financial situation facing the Club. Current Club Chairman and owner John Batchelor did not attend the meeting. It is understood that he was on other business.

Beck explained
It was extremely difficult to have to tell the staff the dire financial situation faced by the Club and that they wont be paid this month. We now need a united Club to give us a chance of getting through this mess.

The Club, its staff and the supporters face a difficult time over the next few weeks. If short term survival can be achieved, then going forward, without doubt, the Supporters Trust continues to believe that it is possible to sustain a professional football club for the city of York. In part, what is needed is simple common sense such that the Club only spends what it can afford on wages and other costs. Over the past few seasons, the directors of the Club have created a level of costs that has far exceeded the amount of income they have managed to generate. As a result, the once significant cash balance held by the Club has been eroded.

It was also revealed in the Evening Press yesterday that certain insolvency procedures have been initiated in relation to the Club. Whilst Trust representatives have been made aware of certain matters surrounding the procedures, as noted above, at this stage the Trust does not have any ownership stake or nominated directors on the Clubs board. John Batchelor owns 100% of the Club and is one of just three directors on the board.

It was also reported that the Club has initiated Company Voluntary Arrangement proceedings. Based on notes contained in the publication The Corporate Governance of Football Club, a CVA is simply a debt restructuring proposal put to the creditors and sanctioned by the court representing the wishes of those creditors. It may mean payment in full of some or all classes of creditors or it can do as little as agreeing a dividend to one class of creditor having first taken into account the priorities. It is the decision of the creditors alone and is effectively a private contract between them and the club. The only requirement is that at least 75% in value of those notified and able to vote support the scheme. The CVA is part of the package of measures that may be necessary to help re-establish the finances of the Club and to continue in business. The situation is further complicated by the Football Leagues rules regarding so-called Football Creditors whereby such creditors are pre-preferential i.e. paid before any other liabilities. These are debts due to other football clubs and footballing bodies and the contractual claims of players and management and coaching staff. This is a unique scenario in football which can be enforced by the prevention of clubs signing new players or indeed being allowed to play.

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