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Two Pence In The Pound
Portpin set to take over with creditors to be shafted once again.
As expected, Balram Chainrai's CVA was proposed to creditors yesterday, offering just two pence to the pound of what they were owed.
The CVA is to give every creditor owed less than £2,500 their money back in full, whilst charities will also be paid in full as will part-time staff. With unsecured creditors owed around £40.2 million, the unsecured debt would effectively be reduced to £804,000.
The CVA proposal also states that creditors will receive £500,000 cash up front but will only be passed if agreements with certain players agree to compromise their future contractual entitlements.
That last sentence is a big issue, especially as there is no sign that Tal Ben-Haim is willing to walk away from Portsmouth without taking a huge payment.
Including in the proposal are other little unrealistic sweeteners that might get creditors more than their measly 2p in the pound such as CSI waiving their claim to what they are owed and if Pompey, by some miracle, return to the Premier League in five years.
If I was a creditor, I would reject the CVA proposal for two reasons.
Firstly, I simply wouldn't trust Chainrai to be true to his word. This isn't the first time he has promised to pay small businesses and charities in full and yet many, if not all of them, have yet to see a penny from Portpin.
Secondly, I would be angered at being offered so little when the same company offered 20p to the pound the first time round. Once bitten, twice shy as they say.
The Pompey Supporters Trust believe that their bid, which should be tabled next week, will offer a better deal to creditors than Portpin's.
My main concern with the Trust's bid is how they intend to show their proof of funds. Will the pledges be accepted? I don't believe that everyone who pledged is going to pay their £1,000 and that might pose a future problem.
Whatever their plan is, I wish them all the best because whilst they have their critics, they are certainly a better owner to have than one who would simply bleed the club dry of what little revenue it would have until the carcass rots completely, leaving the club to die.
D-Day for Chainrai's CVA to be passed is Monday, June 25th. I only hope that there is a better offfer on the table before then.
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