At Saturday’s match a number of Board members were asked about the punishment that the club would suffer were it placed into administration. Given the rules for administration are different in the National League to the Football League (EFL) then we would like to take this opportunity to provide a summary. The rules are as laid out in the 2017/2018 Football Association rule book and can be found at:
Section 13 details Insolvency provisions for National League clubs and we have discussed the potential consequences at some length with Supporters Direct:
1) If a club enters administration before 17:00 on the fourth Thursday in March (March 22nd) then they will immediately be docked 10 league points. If a club enters administration after this date then when they receive the 10 points deduction is determined by their final league position. If the club are relegated anyway, then the punishment rolls onto the next season, and they would start that season one league down on -10 points. If the club finishes the season outside of the relegation positions then they will be docked 10 points this season. If the 10 point deduction causes the team to fall into the relegation zone, then they will be relegated.
2) National League rules are very strict on payment of debts owed; much more strict that the EFL. To avoid further punishment by the League on exit from administration a club must do one of two things:
– Pay all creditors in full immediately
– Pay all football creditors in full immediately and agree to pay off all other creditors in full within 3 years.
While the National League does allow for clubs to agree a reduced debt company voluntary agreement with creditors, i.e. a CVA where debts are not paid in full, this comes with an additional punishment. Exiting administration under these circumstances results in an extra penalty of a one league relegation at the end of the season. With both punishments combined, then it is possible that the club could suffer a double relegation by entering Administration this season.
We all hope that new owners can be found, or that the current owners provide sufficient funding for the rest of the season, without the need for administration. Entering Administration would clearly leave HUFC in a difficult position, given the alleged significant debts of around £2million are unlikely to be paid in full. To that end we have already asked for a meeting with the club this week, and will update further should that meeting take place.
We also hope that the team can build on the victory against Woking, and now push on up the league table to a position at least 10 points above the fourth bottom team. It is imperative that we as fans continue to give them as much support as possible to ensure that happens.