The old Salford City Reds company, Salford Football Club Company 1914, controlled by John Wilkinson, owes almost £4million to debtors, including £1,583,071 to Salford City Council, almost £500,000 to HMRC and £377,389 to Peel Land (Red City).
The extent of the Reds debts have been revealed as a complicated CVA (Company Voluntary Agreement) was backed by the majority of its creditors last week. Interestingly, Salford City Council was classed in the official Companies House document as an `Unsecured Creditor'.
The Salford Star spoke this morning to Andrew Rosler, of Ideal Corporate Solutions which is supervising the CVA, who said that the repayment of Salford Council's loan will now be "spread over time".
Adding that the CVA, which incorporates the old Salford Football Club Company 1914 and the new Marwan Koukash vehicle, Salford City Reds (2013), was "very unique", he explained that this was the best way for Salford Council to get its money back, while allowing Koukash financial space to invest in the new company.
The Business Desk is reporting today that Salford Council "will receive 16% [of the £1.5million loan] over the next five years. The remainder [£1,260,000] will come an unspecified time after that…"
Under the original terms of one Salford Council loan for £1million to the Reds, repayments were scheduled at a rate of £50,000 every three months until March 2017, beginning from June last year (see here). This is now not going to happen. There was a further £500,000 loan of which the original repayment details have not been made public.
The Business Desk is also reporting that "A further £82,000 is owed to the stadium company, a joint venture between Peel and the Council", although this doesn't appear on the Companies House document.
While Koukash has agreed to pay the debts of the old Wilkinson company, these are being spread out over a much longer period of time (so long that no-one appears to be putting a date on it), and it seems that everything is under a Voluntary Agreement, rather than a legally binding court ruling.
Back in February, when the Salford Star tried to find out how the £1.5million loans would be paid back to council tax payers, the Council replied…
"It's no surprise that the Salford Star should respond so negatively to an agreement that is good for the council, good for the Reds and good for the city. But every silver lining has a cloud, eh?" (see here)
Salford Council has also refused to answer a Freedom of Information request from the Star dating back to December about the full extent of the loans, which is now subject to an Internal Inquiry.
When Ian Stewart was elected Salford City Mayor, he promised more transparency. Until Salford Council gives the public the true facts of all public money loaned to Salford Reds, and exactly how it will be paid back, that promise is looking more than empty.
20th March 2013 - UPDATE - click here