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Bolton Wanderers saved from immediate insolvency

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Bolton Wanderers saved from immediate insolvency

The Bolton Wanderers’ case has been adjourned by the High Court and the club now has extra time to find funding for their £172.9m debt, including £2.2m owed to the HMRC.

The championship club has until 22 February to strike a deal with a potential buyer or sell enough assets to repay the HMRC as well as other debtors. If the club is able to secure funding, it would continue to trade and make payments on the debts owed to the HMRC and other creditors.

Club advisor Trevor Birch said in an article on BBC news that HMRC did not want an adjournment but the High Court had "rejected its wish to liquidate". Bolton is currently at the bottom of the Championship league and faces relegation to the third tier of English football.

Insolvency and administration are quickly becoming growing occurrences in football. We have only recently seen both Coventry City and Portsmouth clubs enter administration as well as the well-publicised insolvency of the Rangers back in 2012.  

Administration for Bolton Wanderers would result in a points deduction and inevitable relegation this season.  However, it may well be a more viable course of action enabling the club to rebuild going forward. Whilst the sale of assets belonging to the club is a short term fix to its money problems, it may not be a long term solution for Bolton Wanderers as it will reduce income from alternative sources. 

Administration is used where there is a viable business to be saved, although the company is burdened by unmanageable debt.  In any situation, where there is the threat of insolvency or a cause for concern in respect of the finances of the company, professional insolvency advice should be obtained at the earliest opportunity.