A Winding Up Order For Truro City
The London Gazette can be a treasure trove of information. The official journal record of the British government contains years and years of official information and one notice, published yesterday, really caught the eye – a winding up order issued against Truro City Football Club Limited. This story, which may yet end up turning out to be a case of much ado about nothing – specific details regarding the amount owed are somewhat thin on the ground at present – will be of particular interest to the supporters of Plymouth Argyle, of course, since the club’s owner, Kevin Heaney, has been at the centre of what is increasingly looking like a failed bid to buy Plymouth’s Home Park, with the former Leeds United chairman Peter Ridsdale being set to take over the running of the club. Perhaps the question that supporters of both Plymouth and Truro will be asking today is that of whether Heaney’s money, which has propelled Truro up from the South-Western League to the Blue Square South over the last few years, has run out, or whether there is more to this story than meets the eye.
There was a time when the story of Truro City might have been regarded by some – or even many, perhaps – as a fairytale, but the days of most neutrals standing back and passively admiring the noblesse oblige of a benign dictator at a small club seem long gone. Heaney’s original plan was to turn the club professional in the belief that there would be sufficient interest in a professional football club for the whole county to make it self-supportive. As time has progressed, however, the plans for the club have become more modest, although it does retain full-time staff. The decision to stay part-time resulted in the departure of one manager, Dave Leonard, although his successors, Chris Webb, Sean McCarthy, Steven Thompson and Lee Hodges, have been able to maintain the club’s upward trajectory. Similarly, Heaney’s plans for a new, 16,000 capacity stadium in the the city were twice rejected by council planners, before finally being approved for a smaller stadium earlier this year, with the underwriting of the operating costs for its first 10 years of its operation being met by Dicky Evans of the Cornish Pirates rugby club.
On the pitch, meanwhile, Truro City have found the going in the Blue Square South more difficult than the Southern League, so far. They have won five and lost five of their opening ten matches of the season and sit in eleventh place in the table. It was, of course, always likely that the club would find that the going more difficult as it progressed through up the non-league pyramid and competing with the likes of Woking and Dartford was always going to be a challenge for any newly-promoted club, but even a season of relative consolidation would be a reasonable stepping stone towards further progress. Whether even modest progress such as this will be sustainable in a competitive division if the club has run into financial difficulties. Plans for the future are one thing, but the club’s present must be its most immediate priority, especially considering today’s news.
The last available club annual accounts, to the period ending on the thirty-first of December 2009, show a club that has been living off Heaney’s largesse. The accounts show the club’s liabilities to exceed its assets to the tune of £1,689,807, although it is noted that “£1,408,408 of the current liabilities relates to a loan from the director who has indicated his ongoing support to the company”. The freehold for the club’s Treyew Road ground, meanwhile, was transferred into the name of a company called Cornish Properties Ltd on the twelfth of February 2010 for £1,175.00, with the club continuing to play there under a one hundred and ninety-nine year lease. What is interesting about the Land Registry’s report on Treyew Road is the section regarding restrictions. Charges dated the twenty- fourth of January 2008 and the twelfth of February 2010 are in place – meaning that the ground cannot be sold without the written consent of Lloyds TSB.
Perhaps more curious than this is the other charge registered against Treyew Road. Dated the fifteenth of July 2011, it prevents “disposition of the registered estate (other than a charge) … without a certificate signed by a conveyancer, that the provisions of the clauses 12.1 and 12.2 of a Contract dated 8 July 2011 made between Persimmon Homes Limited (1) Cornish Properties Limited (2) Truro Retail Park Limited (3) Kevin Christopher Heaney (4) have been complied with or that they do not apply to the disposition.” To clarify, Kevin Heaney has been a director of Cornish Properties Limited 2003 and its company secretary since 2008, while Truro Retail Park Limited also appointed Kevin Heaney as a director and secretary in March 2011. Cornish Properties Limited and Truro Retail Park Limited both, for the record, have the same registered address as Truro City Football Club Limited. So, we may well wonder, what was the contract signed between Kevin Heaney, Kevin Heaney, Kevin Heaney and Persimmon Homes on the eighth of July 2011 and, even more specifically, what were clauses 12.1 and 12.2 of it?
We know that Cornwall Council’s feasibility study into the Stadium For Cornwall was completed less than three weeks after this contract was apparently signed and that Persimmon Homes South West has been listed as a lobbyist for a massive housebuilding project in or around the city. We also know that these plans “could also pave the way for a new 1,500-home housing estate nearby in an associated application.” In addition to this, at the start of August the Plymouth Herald was reporting that the “takeover of Plymouth Argyle hinges on the successful outcome of a separate property deal”. Could these disparate stories be linked? They were all reported within a few weeks of each other, for sure. Until anyone knows anything more concrete, though, they remain speculation.
Rumours of the Truro City players not having been paid were circulating as long ago as the start of August, and this hasn’t been the only unrest at the club. After a home match against Dorchester Town in August, anti-Heaney songs were reportedly sung, and this led to the football club’s vice-chairman, Chris Webb, demanding, “that any TISA (The Truro Independent Supporters Association, which was founded last December) branded items, including TISA shirts, scarves and badges not be worn to Treyew Road, as of this Saturday 3rd September” and that, in addition to this, “Treyew Road gate security has been instructed to refuse entry to anyone wearing TISA merchandise.” We can, of course, all draw our own conclusions over what this may or may not say about those currently running the club, but if there is a constant theme running through all of the above, it can only be concluded that something is not right at Truro City Football Club.
Back in the present, the club’s reaction seemed to betray a lack of understanding of insolvency law. The full club statement on the subject can be seen here, but a couple of phrases stand out. Firstly, a company is responsible for the payment of its tax bill rather than HMRC, and the the fact that the club was “only recently … advised of the amount of debt due” is, frankly, irrelevant. The club states that, “This was as a result of HMRC failing to demand this debt over the last two years”, to which the only rational response should be to ask why the bill wasn’t paid by the club itself over the previous two years. In addition to this, the club states that, “TCFC are dismayed by the actions of HMRC in bringing and advertising the petition without allowing the matter to be settled privately and understand the issuing of petitions against football clubs is a matter of HMRC policy which has been effected against a number of football clubs in recent times.” That it was advertised yesterday shouldn’t have been a surprise, though: it was presented on the twenty-fifth of August.
To quickly summarise the procedure, in the first place a creditor will present a petition to the court, which will determine whether it is reasonable. The creditor will also have to prove that it took reasonable steps to recover the amount owed to it. Providing the court accepts the petition, the winding up order will be issued to the company concerned. At this stage, the company has three options: it can pay the outstanding debt in full with costs, it can reach agreement to pay the creditor, or it can request that the court prevents the proceedings from being advertised in the London Gazette because the debt is disputed. If none of these options are taken up within seven working days, the petition is advertised in the London Gazette and a date is set at court for a hearing, and this hearing must be at least seven working days after the placing of the advertisement. It is certainly not unreasonable to presume that the club should have been aware of this action prior to the advertisement being lodged in the London Gazette. It is also worth pointing out that HMRC is obliged to advertise it thus.
The Football Conference will, we dare say, be taking a keen interest in the goings-on in Cornwall. Their financial reporting initiative was introduced in 2009 and has led to a huge reduction in the amount of money owed in taxes. Failure to have the tax bill paid up to date doesn’t in itself lead to other sanctions, but more serious matters may lead to transfer embargoes, fines and points deductions. With debts massively outstripping assets, interest in the ground being related to an unreported contract with a house-building company, players reported as not having been paid on time, an independent supporters association being effectively banned from the ground and a winding up petition now having been advertised for the end of the month, it seems fair to say that there could be considerably serious matters ahead for Truro City.
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