THE appointment of administrators has cost troubled club Gretna over £250,000 in fees, it has emerged.
The Scottish Premier League club went into administration six weeks ago, and since then Wilson Field, Sheffield-based specialists in business recovery and insolvency, have accumulated charges of £253,638.50 – at an average hourly rate of £206.93.
With the club's debts standing at just under £4 million, the fees charged by the company appointed to try to save the football club from extinction represent almost a third of the total value of the club's assets.
It is understood that the fees are equivalent to the cash advanced to the club by the SPL as an emergency measure to keep Gretna afloat and enable the club to complete the rest of the season's league fixtures.
In a statement of the club's affairs obtained by The Scotsman, the administrators have estimated the club's debt at £3.8 million, with assets of only £812,000.
The outlook is bleak for the tiny outfit, with a creditors' meeting called for 8 May to consider proposals made by the administrators. Unsecured creditors account for £3.72m of the club's debt, and there is no indication so far that a buyer is interested in taking on Gretna as a going concern and meeting these liabilities.
The major creditor is Brooks Mileson, the major shareholder who lost control of the club when he withdrew funding in March. He is owed £1.87m, given to the club as a loan in conjunction with his company Heartshape Limited, which he solely owns. The second biggest creditor is former manager Rowan Alexander, who was removed from his position last year after a fall-out and has claimed he is owed £800,000. The administrators' document to creditors indicates that claims such as Alexander's were to be defended, "however due to non-payment of legal fees the company solicitors would not act".
The third biggest creditor is the Inland Revenue, which is owed £440,000, while HM Customs and Excise is owed £136,000. The document states that Mileson's withdrawal of funding created significant cash flow problems, "culminating in a threat from HM Revenue and Customs regarding possible winding up proceedings". It was following this threat that the club's directors passed a resolution to place the company into administration.
The published list of 139 known creditors also includes two former players. James Grady is owed £20,000, while Martin Canning is owed £9,000.
Several football clubs are listed as creditors, including Celtic, Birmingham City, Blackburn Rovers, Barnsley, Sheffield United, Everton and St Johnstone.
The biggest football club creditor is Motherwell, who entered a ground-sharing agreement with Gretna this season because the First Division champions could not bring their own Raydale Park stadium up to SPL standard. The rent has never been disclosed, but the list of creditors shows that the Fir Park club is owed £44,000 by Gretna. This works out at an estimated £2,500 per match.
More than 100 local companies are owed sums between £35 and £75,000. At the top end of that scale is the University of Cumbria, owed £74,000. The club's youth academy is based at the university's facility in Penrith.
The document indicates that Mileson has put up to £8m into the club – £6m to purchase almost the club's entire amount of issued shares through company WB Newco 15 Limited, and £1.87m in a loan. It is unlikely that he will be able to recover much, if any, of this investment unless a heavily-backed investor steps in to take on ownership of the club.
Mileson's son Craig resigned as a director on 26 March this year, but his father remains a director. Mileson senior's withdrawal of financial support came after a sustained period of illness.
The full article contains 652 words and appears in The Scotsman newspaper.
