These are anxious days if you are a fan of Darlington Football Club. The Quakers may have avoided relegation, but financial worries still cast a cloud over the season.
The club has been in administration since Christmas when chairman George Reynolds sought protection from a winding up order by the Inland Revenue.
Since then, Mr Reynolds has stepped aside as chairman and seen his stadium sold to the financiers who helped him finish it for far less than he believes it to be worth. But, as Stuart MAackintosh reports, Mr Reynolds may still have the final say . . .
Where does the club stand at present?
All eyes are focused on the next meeting of creditors, due to take place at Darlington's Neasham Road stadium on Wednesday, May 19. This is when creditors will consider an offer put forward by the Sterling Consortium, owners of the ground. Darlington FC Limited, formed by members of Sterling, has already agreed a £700,000 deal to buy the existing business and that sale will be completed before May 28.
If a sale has been agreed, why is the approval of creditors so important?
To please the Football League. In order for Darlington's share in the league to be transferred to new owners, creditors must be satisfied with the deal. That means that securing a voluntary arrangement - a deal with creditors to keep the club out of liquidation - will be crucial if the Quakers are to start the new Third Division season in August. The league has also imposed the May 28 deadline for the club's future to be clarified as it wants to draw up next season's fixture lists.
How much is Sterling's deal offering creditors?
A paltry amount when compared to the millions they are collectively owed. Once administrators' and agents' fees, legal costs and trading costs have been paid, only £150,000 will be available for creditors. The total debts were initially estimated at more than £20m.
What if creditors agree to the Sterling deal?
They get a share of what they are owed. The club comes out of administration and looks forward to the new season. But one major player has already vowed to reject the offer - former chairman George Reynolds.
Where exactly does Mr Reynolds stand in all of this?
Under normal circumstances, he would be in a strong position because he is, on paper, the largest creditor. He has not yet submitted a formal claim, but the club's last audited accounts, for April 2002, show that he is owed £5.6m. But the case is complicated by Sterling having initiated bankruptcy proceedings against Mr Reynolds, with the case due to be heard in Newcastle on May 20. If he rejects the Sterling proposal, when other creditors were in favour, administrators would most likely adjourn the meeting to await the outcome of the hearing.
How will the bankruptcy hearing affect the Quakers?
Administrators have previously made the situation clear. If Mr Reynolds is not made bankrupt on May 20, the club will almost certainly fold. But if he is, things could change dramatically. A trustee in bankruptcy would be appointed by Mr Reynolds' creditors to look after his interests, and that person may take a different stance. A further creditors' meeting would then be called, probably for May 27, and a decision made. If the vote goes in favour of the deal, the club will be saved.
Read more about the Quakers here.
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