George Rolls, Kettering Town & The Morals Of Insolvency

By on May 24, 2012 in Finance, Latest, Non-League | 9 comments

One of the great conceits of recent years in terms of the way that football clubs are run has been that there is a greater degree of transparency in the way that football clubs are run. There are examples of transparency within the game which are extremely impressive – consider, for example, the decision of Lewes FC of the Ryman League Premier Division to publish their annual accounts online – but, on the whole, this new air of openness often feels like little more than a veneer of democracy in action while business carries on very much as usual otherwise.
Clubs continue to live beyond their means, make bafflingly bad business decisions and then walk away from the all too predictable results of their mismanagement, whilst shaking their heads and muttering, “But what else could we do?”, as if their behaviour as businesses is as natural and inevitable as the passing of the four seasons.

So it was that last night, for the second year in a row, the supporters of Kettering Town found themselves in a public meeting after the final whistle had blown on their season. Last year, Imraan Ladak was polling supporters over whether the club should leave its Rockingham Road home and decamp eight miles away to Nene Park, the former home of the late Rushden & Diamonds FC. The results of that evening became one of the more enduring stories of last season. After a lavish spending spree on new players, it soon became apparent that the team wasn’t gelling, crowds were falling considerably short of the expectations of the owner and the team plummeted towards the foot of the Blue Square Bet Premier. By the time that relegation was confirmed, the fight for the survival of Kettering Town Football Club was overshadowing anything that could happen on the pitch.

The white knight thundering into Irthlingborough on his charger was a familiar name: the former chairman of Cambridge United and Weymouth, George Rolls. Over the last few months and years, Rolls has developed a curious habit of saying one thing with considerable confidence before doing something else entirely. When he arrived at Weymouth, he had no intention the club into a CVA, before putting them into a CVA. When his name first became linked with Kettering Town, he proclaimed very publicly that he was doing nothing more than “advising” the club. Within a couple of months, he had decamped to Nene Park. Upon his arrival at Irthlingborough, he stated that he had no intention of putting Kettering Town into a CVA. A last nights meeting, he confirmed that he would be putting the club into a CVA.

As is common with this sort of meeting, what was significant seems to have been what wasn’t said as much as what was said. Under Football Association rules, any person that is involved in two separate insolvency events at football clubs fails their Fit & Proper Persons Test. Rolls was a director at Weymouth when he put the club into administration, but he seems likely to side-step liability for this second insolvency event because he is not yet formally a director of Kettering Town FC. He did, however, become the sole director of a new company called Poppies Events Ltd on the fifth of March. Is this the company that is ready and waiting to buy the club out of administration with a CVA in place as soon as the insolvency practitioners are formally appointed? It could, of course, all be a happy coincidence that Rolls was becoming the sole director of a company whose registered address is at Nene Park two and a half months prior to the formal announcement that the club was insolvent. Alternatively, it could be – as supporters of Weymouth attempted to warn the supporters of Kettering Town at the time – that this was always Rolls’ intention for the club.

What doesn’t seem to have been raised last night is anything related to the mechanics of the CVA itself. If we are to assume this to be a pre-pack CVA, then creditors will be left high and dry, but that question of the directorship of the club remains valid. Who are the current directors of the club? Who will be signing the paperwork confirming the intention to enter into a CVA? What happens if George Rolls himself ends up failing the FAs Fit & Proper Persons Test? Many of those asking these questions amongst the clubs support appear to be being shouted down at present, but they are questions that should be answered by Rolls. At present, it seems unlikely that they will be. The survival of the club, such that it is, has become a be all and end all. Questioning the new lord and master of the club doesn’t seen very fashionable at the moment.

Such events come, of course, at a price, and not only for the creditors that are now to be taken to the cleaners by yet another football club which seems to know the price of everything and the value of nothing. The price for Kettering Town seems to be demotion to the Premier Division of the Southern Football League. At last night’s meeting, Rolls stated that the club needs average attendances of 700 people next season in order to continue to break even. How realistic, however,is this figure? After all, season ticket sales at the club this summer are expected to be considerably lower than they were this time last year, when cut-price offer encouraged many that might not have been persuaded to buy one to part with their cash. This isn’t the only reason to believe that seven hundred people per match may be optimistic. The club will be playing at least – and few people in non-league football should take anything for granted regarding this sort of matter prior to next months “AGM Cup” – two divisions below where they ended last season.

This is likely to deflate the number of occasional supporters that will turn out for matches here and there, whilst the number of away supporters travelling to Nene Park will also drop considerably in a more division. In addition to this, some may have already drifted irrevocably away from the club as a result of the shenanigans of the last twelve months or so, and the fact remains that Nene Park is and will remain eight miles from the town of Kettering itself. Will people turn out in considerable numbers to watch a club whose off the pitch behaviour has left a sour taste in the mouth and will be starting the season with a deduction of ten points? The odds seem in the balance at best, and that’s being generous, although some may be tempted back by the Rolls statement that he intends to spend £20,000 per month next season on wages, which will likely be the highest wage budget in their division.

Perhaps there is some sort of grand master plan that is being kept hidden from everybody. Perhaps George Rolls is an alchemist who will apply a soothing balm to all supporters concerns and demonstrate that the clouds under which he left Cambridge United and Weymouth were mere blips. Perhaps Kettering Town supporters shouldn’t be troubled by the double-speak that characterised his time at Weymouth and his arrival at Nene Park. Perhaps the survival of this football club is more important than creditors being left to count their losses in the middle of a recession or any other moral considerations. Perhaps there is nothing morally repugnant about offering creditors who provided the club with services in good faith a pittance by a man who says almost in the same breath that he intends for his club to spend so lavishly on players next season. These are, perhaps, considerations for Kettering Town supporters to ponder as the close season stretches out before them. For now, though, in George they trust.

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    9 Comments

  1. Very good article. Sadly, I can’t see this one having a happy ending.

    On a similar note, it’s silly season in reprieve land. Bedfont Town have withdrawn from the Southern League Central division, with Ware likely to retain their Step 4 status as a result. This is in keeping with the 11th commandment: “thou shalt not relegate two teams from the Isthmian League Division 1 North”

    Mike Bayly

    May 24, 2012

  2. Another triumph for the “successful businessman” sole-ownership model.

    Nathan

    May 24, 2012

  3. Interesting article but there seems to be a little confusion between CVA and administration. I am not myself an expert on these matters so open to correction but I believe KTFC are aiming to avoid Administration. Proposing a CVA leaves the directors in charge. This is presumably proposed by an existing director, which makes the appointment of two Trust members to the board an interesting move, will one of them shoulder the responsibility. I think the company would still be there for Mr. Rolls to become a director at an appropriate time.

    Were the authorities so inclined it would be very hard to see how Mr. Rolls could avoid being seen as a shadow director and thus failing the fit-and-proper person test but I suspect that Mr. Rolls is clever enough to know what he’s doing and the football authorities spineless enough not to pursue it.

    One would still doubt whether there was really a future for KTFC at Nene Park as a Southern League (or indeed a Conference) club, even if they start getting in revenue from the site and many might wonder if Mr. Rolls really represents a bright future for any club. What did he suddenly find attractive about Kettering, or unattractive about Weymouth, and when will another club catch his eye, no doubt on a purely consultative basis?

    An additional issue that puzzles me is whether the Trust actually have a shareholding yet and if so where those shares came from as it seems Mr. Ladaak has not relinquished his shares yet.

    Geoff

    May 24, 2012

  4. Geoff, a CVA is a specific legal process that requires the appointment of an administrator in accordance with the Insolvency Act. I’m not at a PC now, but later on I’ll post up a copy of the declaration that club directors have to sign in order to pass the Fit & Proper Persons Test.

    Ian

    May 24, 2012

  5. Although, it should be added that a pre-pack administration doesn’t require the appointment of a receiver. It should still count as an “insolvency event” as the FA are concerned for the F&PP tedt.

    Ian

    May 24, 2012

  6. A Company Voluntary Agreement (CVA) is where at least 75% of the creditors agree to accept reduced payments or a longer period over which to pay debts. George Rolls cannot force a CVA unless he owns or controls 75% or more of the debt. Usually, a CVA is the the exit from administration and acceptably settles the previous debt, either immediately or via an agreed payment schedule. There’s nothing to stop clubs/businesses agreeing different payment terms with their creditors outside this (and it happens frequently over staggered transfer payment s, for example). However, if less than 75% agree, a CVA (which applies to all creditors) won’t happen. If the club is already in administration, then failure to agree terms will mean liquidation. If not in administration already, then a winding up order may be forthcoming when payments are not made on time. Weymouth were already in administration when George Rolls bought the club and proposed a CVA, warning of likely liquidation if it was not accepted. Were the debts all built up after he took over? I don’t think they exited administration before the CVA, so he may have been able to deflect the blame for the debts and CVA onto those who took the club into administration.

    On an average crowd of 700, even at £10/head (more than the adult price at most step 3 clubs), gate income will not bring in £20,000 per month. So sponsorship and ancillary spend is going to need to bring in the shortfall there, plus cover all the other costs. That’s a big ask in today’s economic market. Otherwise we’ll be seeing ‘loans’ to the club that they need like a hole in the head, and we’ll be back here again next season. I hope they truly can ‘break even’, or perhaps even save up for a home of their own back in Kettering someday…

    oftenscore6

    May 25, 2012

  7. Ian

    What is the difference between administration and receivership?

    Andrew

    May 28, 2012

  8. This CVA will be as honest and upright as the Weymouth one was.

    Paul

    June 4, 2012

  9. Just a minor thing Weymouth were never in administartion they went straight into a CVA

    Mike

    June 8, 2012

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