Fiddling As Wrexham Burns
The news that Wrexham Football Club has been served with a Winding Up Order by HMRC came as little surprise to anybody that has been paying much attention to what has been going on at the club over the last few months or so. Indeed, this relatively new aspect to a story that has now been ongoing for several months is one of the more straightforward side-stories in a saga that has gone beyond farce. When we last stopped off at The Racecourse Ground, Stephanie Booth, the woman that has painted herself as the saviour of the club, seemed to have burnt her bridges with the club after having issued a public statement – something that she seems rather fond of doing – stating that she had seen a “seven day notice” of a winding up order that was due to be issued against the club.
Without wishing to get too deeply involved in the legal aspects of this case, there is no such thing as a “seven day notice”, at least in a legal sense. A creditor wishing to petition a debtor is required under section 6.1 (or section 6.2, if a county court judgement has already been obtained with regard to the money concerned) of the Insolvency Act 1986 to issue a Statutory Demand, which gives twenty-one days for the amount owed to be paid in full or for arrangements to be paid to clear or secure the debt to the satisfaction of the creditor. We do not know what exactly it was that Booth saw, but the time frames involved would seem to indicate that it was a a Statutory Demand or a final demand issued by HMRC after the expiry of the Statutory Demand. The club issued an angry public statement in response and that, we thought, was that.
Or was it? A few days later, an email was leaked that provided further embarrassment for Booth and Wrexham FC. We’re not going to go into any further details of what it contained (and nor are we going to go into any details on the even more peculiar story of a girl, apparently adopted by Booth but who then went missing – it’s all, again, quite publicly available on her Facebook page, but it’s too bizarre for this site), but Booth was quick to lay the blame at the door of one Wrexham supporter, Wayne Price, who has been asking Booth some fairly uncomfortable (though by no means unreasonable) questions of late. The matter has come to a head over the last couple of days, with Booth making – not for the first time – legal threats against Price.
Exactly what law she is planning to sue him under isn’t something that she has made clear. If she is seeking action with regard to the email being leaked, it seems unlikely to be the Data Protection Act 1998, since any complaints under that act of law have to be made, in the first place, to the Information Commissioners Office. In addition to this, the act specifically exempts anyone that, “…reasonably believes that, having regard in particular to the special importance of the public interest in freedom of expression, publication would be in the public interest”. The matter is further complicated by the fact that Price lives in Spain, although all countries in the European Economic Area have, broadly speaking, similar data protection laws, but this may by incidental anyway, since Price vigorously denies the allegations being made against him by Booth. We shall have to wait and see whether any proceedings are ever brought and, if they are, what they consist of.
In the meantime, though, since we are discussing legal matters, we would ask you to consider the following standard actions that an individual that is disqualified from acting as a company director is not allowed to perform, and ask you to consider how these may affect Ms Booth. An indvidual disqualified from acting as a company director (and Companies house itself only refers to exemptions in stating that, “Under the legislation a disqualified person can apply to the Court for permission to act as a director of specified companies”, so we have no reason to believe that anyone disqualified would be exempt from these) must not:
- be a director of any company
- act like a director – even without being formally appointed
- influence the running of a company through the directors
- be involved in the formation of a new company
- act in a way that promotes a company
Meanwhile, Wrexham FC have that pesky Winding Up Order to contend with. According to the London Gazette, the case will be heard on the eleventh of May, three days after the second leg of the Blue Square Premier play-off semi-finals, which the team has an excellent chance of competing in. But what does the issuance of the Winding Up Order mean for the club? Well, the recent history of Winding Up Orders brought by HMRC against football clubs has been encouraging for clubs. Several non-league clubs have gone to the sword over such orders, but none the size of Wrexham (Chester City were wound up after such a case, but only after they didn’t oppose the petition) and this season has been good to the clubs of the Football League in particular, with only one, the hopelessly insolvent Plymouth Argyle, being forced into administration, and even that was only after a sixty-three day adjournment to the case at the first hearing. The likelihood of Wrexham FC being wound up at the first hearing are tiny, as long as the club opposes the petition.
What is the worst case scenario, then? Well, that would probably come with the winding up order petition not being opposed, but it seems highly unlikely that this would happen. Based on previous cases that have been heard at the High Court, our best guess would be an adjournment, providing no-one steps in with the money to pay HMRC in full prior to the hearing taking place. Stephen Cleeve has been very quiet of late (his last message on Twitter was posted on the nineteenth of March), so it is difficult to gauge what he is up to at present, and whether he will decide that now is the time to step in (or try and step in) is open to debate. Whether he is what Wrexham FC wants or needs after its experience over the last ten years is a different question altogether, as well.
The responses to the announcement managed to be unsurprising, yet depressing. The Wrexham FC official statement on the subject stated, almost contradictorily, that, “The club “holds its hands up” in full acceptance that this situation has been allowed to escalate, and realises that football clubs in general understand that there now exists something of a zero tolerance relationship between them and HMRC”, but the real issue at hand for the club was revealed with its final flourish: “The HMRC debt is just under £200,000. If the club were able to access a funding pot to clear that debt, then the club’s future could be secured at a stroke”. It just so happens that the Wrexham Supporters Trust has almost £400,000 as the result of tireless fundraising. It could just have been an exceptionally badly or clumsily worded statement, but it wouldn’t be difficult to interpret this closing statement as an attempt to squeeze money from the WST. Booth, ever the opportunist, wasn’t far behind, but her statement was considerably more blunt:
THE ONLY WAY OF SAVING WFC IS FOR THE WREXHAM SUPPORTERS TRUSTS TO INVEST THEIR £378,000 NOW. This money was raised from hundreds of fans specifically to invest in WFC and now is the time for them to do so. Failure to do so NOW will almost certainly result in WFC being wound up.
The full statement is here, and you may note that it doesn’t offer anything to the trust in return for their investment. It is no more than a statement that WST should give their £378,000 to her to invest in the club. Now, there are a couple of reasons why the trust should probably not be first in the queue at the bank in the morning with her bank account details written on a scrap of paper. Firstly, she is not offering anything in return for this, and merely giving away this money, certainly without a vote of its members, would be against its constitution. Secondly, Booth doesn’t own Wrexham FC. The bank details at the bottom of the statement refer to the account name of “Wrexham Football Club Donation Account”, but is this her, or is it the club? It’s a question worth asking because it certainly isn’t made clear. Finally, there is still very little to suggest that Booth is going to invest a single penny into the purchase or saving of the club. WST would be in a considerably weaker negotiation position without any money if or when it comes to take-over discussions. Her statement is an insult to the intelligence of those on the Trust Board of the WST.
There is also a moral point to be considered here. Geoff Moss and Ian Roberts put money into Wrexham FC in the form of loans that they secured against its biggest asset and then took it for their own when they didn’t receive a return on their investment. They then continued to manage the club to a point that it owed £200,000 to HMRC. They have already taken a Rugby League Football Club that they owned, moved into that football club’s historic home and given security to the Rugby Football League for a debt that Crusaders held. Meanwhile, Moss is redeveloping land immediately surrounding the ground that should generate him a very healthy return. Geoff Moss is a very, very wealthy man. Why, exactly, should WST give him a single brass penny to pay off a debt – the single most important debt that Wrexham FC has – that was run up by a company that he is ultimately responsible for? And as for Booth, well, her behaviour towards the trust has, at times, been appalling. As a point of principle if nothing else, the WST should stand firm and ignore these statements.
With an early warning shot in the form of a public statement as soon as it became apparent that there was a problem at Wrexham FC, the Football Conference is likely to be taking a keen interest in what is going on at the club. Wrexham will not suffer a points deduction as a result of having been served with a winding up order. Were they to swerve this by placing themselves into adminstration, they would and this raises an intriguing question. What would happen were they to do this in the middle of the play-offs? Would they be thrown out? Would they suffer a swingeing points deduction, no matter what league they were in next season? This scenario is withour precedent. Quite what the Football League would make of it is also unknown, as well. After the case of Chester City (who should never have been allowed to start the 2009/10 season), the possibilities for what could be decided were this to happen are endless.
And so the Wrexham soap opera, the story that would be turned down as the script for a work of fiction on account of being too unbelievable, rolls on. Perhaps the most important point that we can take from the latest twists and turns at the club is that clarity cannot be understated. Had Booth not been clear about the fact that she was disqualified from acting as a company director from the start, she may not have earnt the distrust of so many. Her behaviour since has only served to alienate an understandably tetchy and suspicious fan (or, if we are going to look at it from her side of the fence for a moment, customer) base. Quite where Wrexham FC is headed from here is impossible to know, but the current cast of characters in this particular soap opera seem unlikely to lead to a happy ending.
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