Bolton Wanderers faced the High Court yet again yesterday, the executioners axe hanging over them. HMRC are asking the court to make an order for the club to be liquidated because they haven’t paid their taxes. Liquidation means that the club will be forced to cease operations and sell any assets they have to pay the people who they owe money to (which include HMRC).

The threat to Bolton’s existence is not yet over. Yesterday in court, Bolton asked for yet another stay of execution to allow them to sell the club to a new owner, who they say will provide the cash necessary to pay the tax bill.

HMRC opposed the application, on the basis that as yet no sale had gone though, that previous promises from the club that action would be taken had never materialised and because of the prospect that even if there is a sale they might not be paid (more below).

The Court ordered an adjournment for two weeks when it will reconsider the matter. If by that time Bolton have paid their debt to HMRC then the petition to wind up the club will be dismissed.

What we learned

The bankruptcy court deals with issues at lightning speed and is mostly administrative. However yesterday we got a bit more detail than usual about the affairs of Bolton.

Firstly, the previous deal with Emerson Group to sell the car park appears to have fallen through. The last time Bolton were in court they were asking for more time for that sale to go though so they could pay off their debts to HMRC.

Eddie Davis, who is said to be the owner of Bolton’s massive £180m debt pile is no longer writing it off as has previously been reported. Instead the debt will be reduced to £15m.

Bolton is also still hemorrhaging money during this period of uncertainty. HMRC reported to the court that although the club had started to pay some of its other creditors it had not paid anything to HMRC, and in addition to the £2.28m owed to it, the club was racking up£175,000 of additional unpaid PAYE liabilities every week.

Finally, HMRC and Eddie Davies are not the only people Bolton owes money to. HMRC disclosed today that it has only just recently learned of substantial debts (£2.5m) to another club director and they are uncertain as to the status of any other liabilities. All of this led them to continue to press for liquidation, despite the prospect of a deal, because they said they even if the new owners paid the £7 promised for the club, then they could not be certain that the club would be able to pay them given the new debts that have started to emerge.

Of course, HMRC has painful recent experience of football clubs spending money that they in their accounts before they went into liquidation.

Who are Sports Shield?

There was some drama as it appears that the deal to sell the club was being negotiated as the High Court was in session, although media reports suggest it was signed minutes before kickoff.

It has been widely reported that a ‘consortium’, Sports Shield Investments led by Dean Holdsworth, is buying the club. However, Sports Shield is not the only company in this game. The barrister for Bolton cited two companies as being party to the deal to sell the club. These companies were represented by two different firms of solicitors, Mishcon de Reya and Field Seymour Parkes. However in public statements people associated with the club have only every talked about Sports Shield.

And who are Sports Shield? Records at companies house show that the only registered director and shareholder of the company is Dean Holdsworth, although just yesterday Eddie Davis said:

Dean, obviously, is a football man, but there are other people in that consortium with direct football experience and I’m sure they’ll be able to take that club forward.

Interestingly, Companies House records state that Sports Shield Limited has been late filing its latest annual return. The Annual Return states who are the directors and shareholders of a company. Isn’t it time for Sports Shield tell Bolton fans about who is going to take over their club?

Finally, the deal has not gone thought yet, the new owners (whoever they may be) need to be approved by the league who needs to satisfy themselves that they are fit and proper to run a football club, although given some of the people that the league has approved in the past, that shouldn’t be a difficult test to pass! The need to secure league approval for the deal was the reason given for the adjournment to the winding up proceedings.

No doubt we will find out more over the next few days, and for definite when the case returns to court in 14 days.

Photo Credit, Darren Riely on Flickr