Jim1955 12 Posted June 17, 2013 Share Posted June 17, 2013 According to various sources Hearts have lodged documents at court and will go into administration tomorrow. Unfortunately I don't think they will be the last. 0 Quote Link to post Share on other sites More sharing options...
Gribz 743 Posted June 17, 2013 Share Posted June 17, 2013 Hearts have served notice of their intention to appoint an administrator. The Edinburgh club have debts of £25m - owed to Lithuanian-based companies formerly owned by Vladimir Romanov - who are themselves facing insolvency. Last week, the entire Tynecastle squad was put up for sale, with Hearts seeking £500,000 to keep them running over the summer. It means Hearts will start next season in the top flight with a deduction of 15 points. Papers have been lodged with the court of session in Edinburgh to formally begin the process. KPMG will be the company taking on the administration, while most staff have been informed of the situation, although many players are away on holiday. Hearts employ 131 people, including a first-team pool of 26, with 10 players remaining in the youth set-up. Players were not paid last week and the Scottish Premier League outfit then placed their entire squad up for sale, . That followed the threat of a winding-up order after HM Revenue and Customs threatened action over an unpaid £100,000 tax bill, although the majority of that sum has been paid. Hearts owe £15m to Ukio Bankas, which has been declared bankrupt. The liquidator of the Lithuanian bank can sell the 29.9% shareholding it has in Hearts as well as Tynecastle Stadium, which was held as security for the debt. In addition, another £10m is due to the club's parent company, UBIG - which has close to 50% of the shares and is claiming insolvency. A liquidator with the power to sell UBIG's Hearts shares will only be appointed if the company's bankruptcy is formalised. All the assets of UBIG have been frozen by the Lithuanian courts. Both companies were once controlled by Romanov, who first invested in Hearts in 2005. At least six parties have expressed an interest in a potential takeover but with ownership of the club so complicated it has hindered any development. Top-flight rules state any club suffering an insolvency event will be stripped of 10 points or a third of their previous season's tally, whichever is the greater. Hearts finished the last campaign in 10th place with 45 points. Hearts avoided a points deduction and possible relegation in May after the SPL decided the club's financial problems had not breached its rules before the end of the season. Hearts in financial trouble •Feb 2005 - Vladimir Romanov takes a controlling stake at Tynecastle •Season 2005/06 - Hearts finish second in the SPL •Hearts win Scottish Cup in 2006 & 2012 •Wage delays become a regular feature from 2011 on •Nov 2011 - Romanov seeks a buyer for club, saying he has has invested more than £50m •October 2012 - SPL imposes registration ban for repeated late payment of salaries •May 2013 - Ukio Bankas declared bankrupt •May 2013 - UBIG unable to meet its liabilities •May 2013 - Hearts avoid points deduction as SPL rules UBIG has not suffered an insolvency event •June 2013 - Hearts to enter administration Best case is they will start the season 15 points down. Worst case is they lose all their players with 15 points down and play the youths then they are down and we will meet them in Div 1 the following season which gives them a 'pick me up' due to a) Rangers supporters at Tynecastle twice and b) The TVs will want a piece of that. 0 Quote Link to post Share on other sites More sharing options...
UCF2008 0 Posted June 18, 2013 Share Posted June 18, 2013 Best case is they will start the season 15 points down. Worst case is they lose all their players with 15 points down and play the youths then they are down and we will meet them in Div 1 the following season which gives them a 'pick me up' due to a) Rangers supporters at Tynecastle twice and b) The TVs will want a piece of that. I think you're maybe being a little optimistic with the worst case scenario there Gribz. It looks as though they're going to have a hard enough time surviving till the start of the season nevermind speculating where they'll be come the end of it. Their process of finding a buyer is different from ours in that they don't have the same unknowns to deal with as we had. Their debt to the taxman is at least real and should be managable if a sale can be negotiated but the situation with UBIG and UKIO is complicated (not least because it's in the hands of foreign courts) and could equally help or hinder them. 0 Quote Link to post Share on other sites More sharing options...
BlueMazza 0 Posted June 18, 2013 Share Posted June 18, 2013 I think you're maybe being a little optimistic with the worst case scenario there Gribz. It looks as though they're going to have a hard enough time surviving till the start of the season nevermind speculating where they'll be come the end of it. Their process of finding a buyer is different from ours in that they don't have the same unknowns to deal with as we had. Their debt to the taxman is at least real and should be managable if a sale can be negotiated but the situation with UBIG and UKIO is complicated (not least because it's in the hands of foreign courts) and could equally help or hinder them. They also don't have our stature and history. 0 Quote Link to post Share on other sites More sharing options...
calscot 0 Posted June 18, 2013 Share Posted June 18, 2013 Can they afford administration? It cost us about £2m - money they don't have. If we're worth 5.5m, what are they worth? I don't see how they can cover the cost. Administration now seems a complete scam by accountants to me. They took a £50m club like Rangers and were able to pass on about £2m to creditors when the old board could have raised more than that by selling one player - MacGregor, Naismith etc. Complete joke of a process. 0 Quote Link to post Share on other sites More sharing options...
Darthter 542 Posted June 18, 2013 Share Posted June 18, 2013 Can they afford administration? It cost us about £2m - money they don't have. If we're worth 5.5m, what are they worth? I don't see how they can cover the cost. I don't think they can afford the admin process.....which I why I wouldn't be surprised if the Court of Session doesn't approve the Admin request. They have had a number of well documented cash flow problems over recent months, as well as a number of Winding-up orders from HMRC. They owe £m's to struggling foreign companies who will be looking to maximise any return etc. I would find it VERY difficult to describe the club as a going concern. There are reportedly a number of potential buyers....but do they have the funds to firstly keep the club running over the summer, and secondly to move the club forward into next season & beyond??? I certainly don't get that impression. 0 Quote Link to post Share on other sites More sharing options...
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