Portsmouth could be first PL club declared bankrupt

Portsmouth could become the first Premier League club to be

declared bankrupt after being given a deadline to clear its debts

by the British government.

HM Revenue and Customs filed a winding-up petition against

Portsmouth at London’s High Court on Dec. 23, and the club must

show it can pay the tax it owes at a full hearing scheduled for

Feb. 10.

If HMRC hasn’t recovered its money from Portsmouth by then,

the club could be declared bankrupt and a receiver appointed.

However, Portsmouth is disputing the amount owed in taxation

debt and expects “HMRC to withdraw their demands forthwith.”

The Premier League’s bottom club said in a statement

Wednesday that it has not been “formally” served with a winding-up

petition and is “shocked and surprised” that this action has been

taken.

Portsmouth, which spent heavily on players before winning the

2008 FA Cup, has had three owners since August and failed to pay

its players on time twice this season.

“Extreme efforts have been made to reach payment arrangements

with HMRC to allow the owner time to deal with inherited debt,” the

south-coast club said.

Pompey said their owner, Saudi Arabian property magnate Ali

Al-Faraj, has given 9.7 million pounds ($15.4 million) to HMRC.

“In such a tough economic environment, the club finds it hard

to understand this action by HMRC,” the club said. “It is well

known that the business has been in a difficult position following

former owners’ decisions and the current owner is committed to

resolving this and moving forward.”

Portsmouth has been subject to a transfer ban since October

from the Premier League, which was founded in 1992. The indefinite

sanction, which stops the club buying players in January’s transfer

window and beyond, was imposed to prevent the club’s liabilities

and wage bill increasing.

“We continue to monitor Portsmouth’s situation closely and

remain in frequent dialogue with the club,” the Premier League said

in a statement. “Clearly, we hope they settle any issues they have

with the HMRC before the court hearing in February.”

Portsmouth was on the brink of administration before the

season started in August with Sacha Gaydamak trying to sell the

club. Premier League officials are understood to have been working

with the club since the offseason to stop it going into

administration.

The desperate financial situation looked to have been eased

in late August when Sulaiman Al-Fahim completed his protracted

takeover, but the Dubai businessman’s ownership lasted less than

six weeks as he failed to refinance the club and pay the players’

wages on time.

Al-Faraj’s subsequent takeover was portrayed as rescuing the

club, but he has struggled since October to find investors to pay

off the debts owed to other clubs and HMRC.