George Reynolds' decision to stand down as chairman of the club on Monday leaves many unanswered questions - Northern Echo Sport attempts to answer them.
Q Why did Darlington Football Club go into administration?
A A court order placing the club in administration was granted on December 23. The application was made by the club to prevent it being wound up by the Inland Revenue which is owed money.
Q What is the purpose of administration?
A It is a legal procedure that allows a business in financial trouble to keep operating, protecting it from proceedings by creditors.
Q How long can the club stay in administration?
A For up to a year from the date of the court order. This can be extended by a further six months with the consent of creditors, or even further with the permission of the court. However, the Football League will be unlikely to agree to a lengthy period of administration and has tightened up rules following Notts County's recent record-breaking period of administration.
Q Who are the directors of the football club.
A According to the Football League official website they are: vice-chairman Gordon Hodgson, Bernard Lowery, Susan Reynolds, Luke Raine, and Ritchie Tennick. George Reynolds resigned as chairman and director on Monday.
Q What is the role of the directors while the club is in administration?
A The administrators of Darlington Football Club - three partners from insolvency practitioners Wilson Field - are in control of all affairs of the club. The directors are employees of the club and act only on the guidance of the administrators. It is the administrators, not the directors, who are talking to potential bidders. At the moment the directors are helping the administrators draw up a list of creditors and assess the level of the club's debts.
Q How much is Darlington Football Club in debt?
A No one knows for sure. We will have a better idea when the administrators issue a statement of affairs. That is expected within the next few days.
Q When will the creditors meet?
A The administrators have to hold a meeting by the end of February. At the meeting the administrators will present proposals on how they intend to take the club forward. The proposals will need the support of the majority of creditors, measured by the value of the money they are owed.
Q What are the options for the club?
A The administrators have three options: flog it, solve it, or liquidate it. The priority for the administrators will be to keep the club afloat until they know which option they are going to take. They will try to reach an agreement to pay back the creditors a percentage of what they are owed over a period of time. This Company Voluntary Arrangement may be possible with George Reynolds remaining as owner, but is most likely to be achieved with new owners promising to invest in the club and guarantee that re-payments will be made. The worst case option of the three is if a CVA arrangement is not possible or is rejected by the creditors. Then the assets of the club will be sold off piecemeal and the proceeds shared out among the creditors as part of the liquidation process.
Q What are shares in the football club worth?
A George Reynolds owns 96 per cent of the shares. But his stake is only worth what someone is prepared to pay for them. Because of the scale of the debts the value of the shares may be minimal. The administrators have a legal duty to strike the best deal for the creditors, not the best deal for George Reynolds. It is as a major creditor, rather than owner, that George Reynolds will have a say in the future of Darlington Football Club.
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