Darlington Football Club stands on the brink this morning, with the club’s administrators admitting the current situation is “very serious and worrying”. Scott Wilson and Paul Cook look at what the future could hold.

Quakers faced with two options

WHAT are the options for Darlington?

TWO-AND-A-HALF months on from entering administration, there are now just two options for Darlington Football Club.

The first would see former chairman George Houghton agree to sell to either a new single owner or a consortia of businessmen or supporters.

That is looking increasingly unlikely, as vice-chairman Raj Singh was the only interested party to table a bid ahead of the original April 20 deadline, and his offer was later withdrawn.

Mr Singh has subsequently submitted another “take it or leave it bid”, but that has been rejected by the administrators.

If no buyer can be found before the administrators’ fighting fund runs out, option two would see Darlington Football Club go into liquidation.

WHAT does liquidaton mean?

LIQUIDATION is the process by which a company is brought to an end, and its assets and property redistributed.

If the administrator feels he does not have the funds to guarantee Darlington’s dayto- day existence, he will apply to the courts for a winding-up order.

The football’s club’s remaining assets, which do not include The Northern Echo Darlington Arena, will then be sold or distributed among the club’s creditors.

Preferential creditors, such as the playing staff and other clubs which are owed transfer fees, will be paid first, before debts owed to unsecured creditors are settled.

The club can still be sold while it is in liquidation, but if a buyer still cannot be found at that stage, it will go out of existence.

IF Darlington were to go into liquidation, what league would a new club play in?

IT would depend on whether the existing club were taken over, or whether a new club was formed.

If Darlington Football Club were to continue in its existing form after liquidation, it would be forced to play three rungs down the Football League ladder in the Unibond Premier League.

That would mean a new owner, or group of owners, taking over a club that was playing against the likes of Bradford Park Avenue, North Ferriby United and Boston United – themselves formerly a Football League club.

If, however, Darlington ceased to exist and a new club were formed, that club would have to start from the bottom of the Football League ladder. That would almost certainly mean playing in the Wearside League.

WHAT would happen to the club’s creditors if it were to go into liquidation? Would anyone get their money back?

IF the club were to go into liquidation, all assets would immediately be sold in an attempt to raise funds.

However, with the stadium not forming part of the club’s assets and the playing squad having been cut back to a bare minimum, it is hard to see too many saleable assets that could be relinquished.

As a result, it would be extremely unlikely that any creditors would get their money back.

IF the club were to go to the wall, what would George Houghton walk away with?

IF the club folds, Mr Houghton would lose almost all of the money he has invested since taking over as chairman in 2005. He would be treated as any other creditor, and compensated accordingly.

An exact figure is not available, but he has previously claimed that he is owed about £3m, having pumped in more than £1.2m since last December.

But even if Darlington were to go into liquidation, Mr Houghton would still retain ownership of The Northern Echo Darlington Arena and surrounding land.

WHAT will happen to the players this summer? And what would happen if Darlington were to go into liquidation?

ANY player under contract at Darlington is free to give 14 days’ notice of his intention to leave. The club would then have a seven-day right of appeal, but as they have asked their staff to take a series of deferrals, they would almost certainly be unable to prevent the departure of any of their playing staff.

Having severed their ties with Darlington, a player would then be free to join another club.

If Darlington were to go into liquidation, the remaining players would be treated in the same way as all other preferential creditors. As a result, they would be unlikely to receive the wages they deferred in the second half of the season.

IF Darlington avoid liquidation this summer, would the Football League allow them to start next season in League Two?

IT depends. The Football League will only allow Darlington to kick-off next season in League Two if they can display a viable exit strategy for leaving administration. If they cannot, they will not be granted a Football League share.

The administrators have to be able to prove they have plans for existing administration, and Football League rules state those plans have to be in place on the opening day of next season. However, in practice, the Football League board meets monthly and will demand to be kept updated as to the club’s ongoing situation.

If they feel there is a serious danger of the club folding, they will seek assurances at an earlier date so they can put contingency plans in place.

IF Darlington were to go into liquidaton, what would happen to League Two next season?

IT would depend on when the club entered liquidation.

The Football League holds its annual meeting on June 12, and this is the date when one season ends and the next one begins.

If Darlington was to go into liquidaton before June 12, Chester City would start next season in League Two despite finishing the season in 23rd position.

If, however, Darlington was to go into liquidation after June 12, next season’s League Two would comprise only 23 clubs.

HOW much is the club currently spending a week, and how long will the administrators’ reserves support that spending?

ADMINISTRATOR Dave Clark refused to discuss specifics yesterday, saying: “It is hard to say because we are not in a normal matchby- match scenario. We have got a set amount of money to use, so we will stretch that money out”.

The 3,400-strong crowd that attended last weekend’s All Stars game helped swell the coffers, but the money was not enough to prevent job losses on Wednesday.

Crucially, Darlington are owed a sum of sponsorship money relating to last season. That money could be the difference between surviving the summer and folding before the start of next season.

WHAT would be Darlington Borough Council’s position on the arena if the club were to go to the wall?

“WE will do everything we can to co-operate with the administrator in his task of trying to find a buyer who will enable the club to thrive.

Our focus is on working for a positive outcome. However, should the club fold, we would work with all the parties involved, including any potential new owners, to find a positive future use of the arena.”

WHAT would be the council’s position on planning applications at the arena if the club was to fold?

THE council’s planning applications committee has agreed to grant the planning applications for development around the ground and there would be no change on that.

WHAT covenants are there on the arena land?

THE council has to get a fair value for its land – to be fair to the council tax payers.

When it was originally sold, it was sold only for its value as land for a football stadium. Therefore, to ensure a fair value, a covenant was placed on the land, which requires the owner to pay the council a share of any higher value development.

DOES the council receive 75 per cent of any non-footballing revenue from the Arena?

NO. Only if there is an increase in the value of the land from new development would the council get a share of the fair land value.