Southend secure court order over player payments to help ensure survival

Southend have secured an pressing court order permitting the cost of gamers and accountants earlier than deadlines that threaten the membership’s survival.

A lawyer for the National League aspect advised a specialist decide they’d “simply cease to exist” if payments to enjoying employees and for the submitting of overdue accounts weren’t made on Wednesday.

Judge Sebastian Prentis heard at a web based listening to that gamers might “walk away” if they didn’t obtain their salaries due on the finish of this month, whereas the National League had mentioned it might withdraw the membership’s membership if accounts weren’t filed “by close of business”.

The insolvency and corporations court listening to comes after HM Revenue & Customs (HMRC) issued a winding-up petition in opposition to the non-league membership over a £275,000 tax debt.

Earlier this month, Southend – who dropped out of the English Football League on the finish of the 2020/21 season – got extra time to clear the debt because the house owners look into the sale of the membership.

Barrister Hilary Stonefrost, representing the loss-making aspect, advised Wednesday’s listening to it wanted a “validation order” to unfreeze a checking account and make payments.

She mentioned this was “to ensure the business of the company can survive under its present ownership long enough for a sale of the company’s shares to new owners”.

“The salaries of the footballers and the footballing staff need to be paid today… and if they are not paid they can walk away,” she mentioned.

“The National League has said that if they did not file accounts before close of business today then they will withdraw their membership of the league.”

Ms Stonefrost apologised for the lateness of the membership’s court software, saying administration was “very occupied with putting the sale together”, together with it being “marketed in America”.

In March, it was reported that the membership’s mum or dad firm had appointed General Sports Worldwide, an American company, to discover the marketplace for potential consumers or contemporary funding.

Ms Stonefrost advised the listening to that brokers have been instructed to produce an “investment prospectus”, saying negotiations have been being performed with potential consumers who had handed “the financial requirement test”.

She mentioned membership chairman Ron Martin, who noticed the net listening to, had given an “undertaking” that sale proceeds can be used to pay HMRC and collectors.

Southend’s mum or dad corporations, South Eastern Leisure UK Limited and Martin Dawn Plc – each Mr Martin’s household corporations – have “always funded this club”, Ms Stonefrost mentioned.

She mentioned it was “not necessarily in a timely manner” however cash has been raised to pay money owed.

The membership got here shut to going out of enterprise earlier this 12 months earlier than settling an excellent invoice of £1.4million with HMRC, which has issued quite a lot of winding-up petitions in opposition to Southend in recent times.

Ms Stonefrost advised the court there was a “short-term liquidity” downside with the mum or dad corporations in relation to a “huge development in Southend”.

Judge Prentis mentioned £25,000 of the membership’s present HMRC debt had been paid – with the petition due to be reconsidered on July 12.

He mentioned the “manifestly insolvent” membership had to present to the National League accounts for 2020 and 2021, having not filed any to Companies House since July 31 2019.

The decide mentioned that until gamers have been paid they’d the precise to depart inside 14 days “without providing any value to the company through transfer fees”.

He granted a part of the requested order to cowl payments to accountants, footballing employees and attorneys, however mentioned he was “concerned” over “weak” proof that the membership might meet a second National League deadline of June 2 to pay HMRC in full in addition to all soccer collectors.

The case will return to court on Monday, when Ms Stonefrost mentioned the decide will obtain a National League letter saying it has modified the June deadline.

She additionally dedicated to offering confidential info on the sale course of and element on how cash from a sale can be dealt with.