Middlesbrough FC has welcomed the statement from the EFL, who have requested a meeting with the administrators of Derby County and the following stakeholders: the current highest bidder(s), Middlesbrough FC, Wycombe Wanderers FC, Mel Morris, MSD Partners and HMRC.
MFC is available to attend any meeting, wherever or whenever this may be, just as we always have been.
MFC has always maintained that its claim against Derby County is a football related debt and that it should be treated as such. MFC welcomes the EFL’s confirmation that it shares this view. If the administrators believe that the EFL are not entitled to take this stance, MFC has offered to refer the matter to a judge to decide.
The administrators were appointed in September but have consistently refused to engage with MFC’s attempts to engage with them to reach a resolution. There are several letters from us which the administrators have ignored. MFC is extremely disappointed that this administration has not been concluded successfully and that the administrators have, instead, through the media, continuously sought to make scurrilous and unfounded suggestions that it is the claims of our club and Wycombe, and the EFL, that are preventing a successful outcome. It is not true and these statements are deeply unfair, not only to our club, but also to the Derby County supporters who deserve better.
There has been no suggestion that the administrators have reached an agreement with Derby County’s other main creditors. We believe that the administrators have a duty to the public to answer the questions we asked in our open letter of 20 January 2022. MFC understands that the debt owed to MSD is (i) personally guaranteed by Mr Morris and (ii) is secured against the stadium. This means that Mr Morris has agreed to pay the MSD debt if there is a shortfall. Is this correct? And, if so, what contribution is being sought from Mr Morris?
A significant focus of MFC’s claim against Derby County relates to the sale of Derby County’s stadium and the belief that it was done in a way which manipulated the Profit and Sustainability Rules. The same transaction is now a material reason why the administration cannot be resolved. MFC, and many other stakeholders in football, do not understand why the administrator refuses to acknowledge this problem and, instead, chooses to unfairly blame us, Wycombe and the EFL.
The EFL statement in full…
The EFL Board met today and received an update in respect of Derby County FC.
Over the last few weeks, the EFL has engaged proactively with the Club’s Administrators and other key stakeholders including the local authority, MPs and the Rams Trust as we seek to assist the Club in its efforts to exit from administration in accordance with the requirements of the League’s Insolvency Policy.
The EFL’s Insolvency Policy is designed to offer guidance to Clubs on how the board might seek to deal with any Club in administration. That policy, which has been accepted by all 72 Clubs, describes how the Members agreed ‘that the starting point is that no Club should gain (or seek to gain) any advantage within the context of professional football over other Clubs by not paying all its creditors in full at all times.’
In this case, Derby County is seeking to use insolvency legislation to avoid having to defend the claims of Middlesbrough FC (which commenced initially in January 2021) and Wycombe Wanderers. Derby County considers those claims should not be treated as football related debts and that it would be wrong for the EFL to require the Club to have to continue to defend the claims as a condition of continuing membership in circumstances where they have been compromised by way of a restructuring plan. The EFL does not agree with that analysis.
At the request of the Administrators, and in line with commitments given at last week’s meeting with local politicians, the EFL has provided a further clear statement to Quantuma of its position on the application of the Insolvency Policy, so as to enable them to apply to the High Court or engage in Arbitration to have that issue determined. It is now for the Administrators to determine how they wish to move this matter forward and we remain willing to expedite any process, as necessary.
The fact remains that the Club is suffering from critical legacy debt issues that reach into tens of millions, all of which need to be resolved if a solution is to be found. That also includes monies owed to HMRC and the loans from MSD secured against Club assets and the Stadium.
The EFL has previously requested mediation between the two Clubs and the Administrators and is today inviting all relevant and associated parties involved to enter formal collaborative negotiations to actively seek out the compromises and solutions required to ensure that Derby County has a long-term future.
For the avoidance of any doubt the EFL is requesting the attendance of Administrators and the following stakeholders to participate: the current highest bidder(s), Middlesbrough FC, Wycombe Wanderers FC, Mel Morris, MSD Partners and HMRC.
The EFL will endeavour to provide updates on any progress achieved as a result of this request and any subsequent discussions in due course, whilst also continuing to maintain our commitment to transparency in our dealings with the politicians and local authority officials that make up ‘Team Derby’ alongside direct engagement with Derby County Supporters’ groups and the FSA.