Coventry City face 15-point penalty as part of club faces liquidation


Coventry City are facing a 15-point deduction after creditors rejected a deal over debts and left part of the club on the brink of liquidation.
They are still set to start the League One season at Crawley on Saturday.
Coventry City FC Ltd went into administration in March following a rent-row with Arena Coventry Limited.
It now faces liquidation after ACL, which runs the Ricoh Arena, rejected a Company Voluntary Arrangement at a creditors' meeting on Friday.
Had the CVA, a payment scheme between an ailing company and its creditors, been accepted, the club may have been able to come out of administration.

Analysis

"As if the situation hasn't been unsettling enough for Sky Blues fans, this impending liquidation will feel like the final straw.
"In some ways it was perhaps inevitable: both sides in the row, ACL and Sisu always seemed reluctant to concede any ground in their pursuit of a solution and this is the result.
"The operational side of the club - Coventry City Holdings - are setting up urgent talks with the Football League to decide what happens next. High on the list will be the extent of any penalty, likely to be at least 15 points."
Dan Wheeler, BBC Coventry & Warwickshire
However ACL, which operates the stadium on behalf of Coventry City Council and the Alan Higgs Centre Trust, expressed its concerns over the club's agreed groundshare at Northampton's Sixfields Stadium for the next three seasons and the club's financial future, leading it to reject the CVA alongside Her Majesty's Revenue and Customs.
A Coventry club statement read: "It is with great regret that a proposed CVA has been rejected by ACL.
"It means CCFC Ltd is likely to be put into liquidation which is expected to result in a points penalty for the club going into the new season.
"The football club and the Alan Higgs Centre Trust accepted the administrator's CVA, but the City Council, through ACL, have chosen to reject it, leading to possible liquidation and the risk of a 15-point deduction.
"The club will hold urgent meetings with the Football League this afternoon to go through the next steps for the football club."
It claimed that the Otium Entertainment Group, who recently took over the Sky Blues from previous owners Sisu whom they have links with, had no right to request the move, as its takeover of City had not been completed.
And ACL released a statement saying that it was unhappy with the proposals in the CVA put forward by Coventry CCFC Ltd joint-administrator Paul Appleton.

Coventry City at the Ricoh Arena

  • The Ricoh Arena has been the Sky Blues' base since 2005 when they left Highfield Road, their home for the previous 106 years.
  • Arena Coventry Ltd manage the Ricoh Arena on behalf of the stadium's joint-owners.
  • Coventry City Council owns a share of the 32,000-capacity ground, along with the Alan Edward Higgs Charity.
"This decision was based on ACL's twin aims," a statement read. "First, to keep Coventry City Football Club playing in Coventry; and second, to ensure that Coventry City Football Club is financially viable for the next few years and beyond.
"This last point is especially important given that CCFC has been the subject of a 'catastrophic insolvency' in the hands of its previous owners.
"The CVA proposals put forward by Mr Appleton simply do not address these obvious concerns. And these concerns are not only the concerns of ACL - they are the concerns of all Sky Blues supporters, and should be the central concerns of both The Football League and The Football Association.
"Mr Appleton has the ability to put forward new proposals, and we would welcome these as soon as possible."
In response to ACL's statement, Appleton said: "We do not understand the comments being made by ACL with regard to the ability to put forward new proposals. The proposals ACL required simply did not comply with the law."
Under the terms of the deal between ACL and Coventry City over the Ricoh Arena, which has been the Sky Blues' home since 2005, the club had been paying £1.2m in rent per year, and only received a limited share of the catering and parking revenues from matchdays.
Eventually, the Sky Blues' debts to ACL mounted to £1.3m leading to CCFC Ltd going into administration and the club being deducted 10 points by the Football League.
The rent row resulted in the club agreeing a three-year groundshare with Northampton, and searching for a new permanent home in the city.