HUST Statement 24th February 2018

As promised on Thursday, we are making a fuller statement on our understanding of the current position at the club for the benefit of our members. We announced a few weeks ago that the club had told us they had sufficient funding to cover the February outgoings, so we are pleased to confirm what has been stated in the press in relation to players and staff having been paid yesterday.

We spoke to John Blackledge about the reports of a meeting on Thursday between club and a potential Swedish buyer. Mr Blackledge confirmed his solicitor Geoff Cunningham had met Daniel Kindberg for informal talks, however he seemed keen to downplay the significance of the meeting, and that the outcome of it had been overstated by the media . We got the impression that it had amounted to little more than an expression of interest. We note that Mr Blackledge himself did not attend the meeting, and also that when we discussed the matter today with Pamela Duxbury, we did not get the impression anything would be happening in that quarter imminently.

We are due to receive the report from our appointed representative Nick Igoe next week (as we mentioned on Thursday) following his review of the club books. We did have a full and frank discussion on the state of the club finances with Pam today. She stated that in the period Dec 2016 to May 2017 the club was losing in the region of £200k per month, and this was being subsidised entirely by John Blackledge. During this period there was also a lot of legacy debt emerging and she stated by May 2017 John had put into the club £1.2 million.

There was then a 3 month period when the club was financially breaking even, but this was in large part due to season ticket sales and league money coming in. We were told Mr Blackledge paid wages in October and November but has not put any money into the club since then, something he stated was factually correct. We do not envisage him providing any further financial payment to the club. We should get a fuller picture in relation to the current level of debt when we get Nicks report, but expect it to be in the region reported in the press i.e. £1.8 million.

We sought assurances that running costs for March could be met, and Pam stated that she felt they could, but it would be very tight. Clearly the club needs to maximise income from the home games in March and we will be sitting down again with the club, hopefully in the next few days, with some suggestions as to how this can be done. On a positive note outgoings have been reduced.

Pam did say that while the football club is an insolvent business they can continue trading as long as there are genuine interested potential buyers. She is also working very hard to firm up financial agreements with creditors.

We raised the issue of her own salary as there had been comments on it on social media. She categorically denied taking excessive amounts of money from the club, and this was corroborated by John Blackledge. She also stated she was taking a lot less than she was entitled to, and had been for several months.

We discussed the potential sanctions were the club to enter into Administration as the club and Trust had differing views on this. Pam called Mike Tattersall the Chief Executive of the National League while Trust Board Members were present, and he confirmed our understanding of the rules, that if the club goes into Admin before 5pm on 22 March they will automatically have 10 points deducted.

If they enter Admin after that point but before the end of the season The NL will make a decision whether to apply the 10 point deduction or roll it over to next season.

• If we go into Admin after the cut off and finish in the bottom 4 the 10 points will apply next season

• If we finish less than 10 points above the bottom 4 then the sanction will be applied and we will be relegated

• If we finish more than 10 points above the bottom 4 then the points will be taken off .

In short the club will suffer whatever the worst option is, and we have NO SAY AT ALL as to when to have the points deducted.

The rules in relation to further sanctions should the club come out of Admin with a non- compliant CVA (the most likely outcome) are vague but Mr Tattersall seemed to be strongly suggesting that it would mean expulsion from The National Leagues, in which case, as we alluded to last week, the best we could hope for is to drop to The Northern Premier League.
We would of course lobby the NL and the FA should this happen but we have to say we do not expect to get much joy from either body.

Should no buyer be found by the Administrator ( and this would largely be determined by how much John Blackledge was prepared to be flexible ) then the club would be liquidated and have to start again as a Phoenix Club in the Northern League

We asked about players who were signed last Summer getting 52 week contracts rather than the 46 week contracts considered the norm in the NL. Pam admitted the players had 52 week contracts but stated this was the only way the club could get players to come to the club that Craig Harrison wanted. She also stated that although the contracts were 6 weeks longer than those offered by semi pro clubs the players only got what they would have received overall on a 46 week contract as the weekly pay was lower.

We got clarification that the transfer embargo was in place because the club was unable to satisfy the NL that it was able to continue trading until the end of the season. There was a second reason but it was agreed by Pam and The Trust that this should not be disclosed at the current time. Pam also confirmed that the police investigation is ongoing.

We asked why Pam had appointed her own solicitor to handle enquiries about the sale of the club. She stated this was in part to make it clear she was running the club under her own processes and not standing behind John Blackledge, but primarily because she felt it gave the club the opportunity to cast its net wider in search of potential buyers.

Finally we discussed the managerial situation. The decision to remove Craig Harrison was taken by Pam and based purely on results and performances. There was absolutely no truth in the rumours circulating on social media that he had been removed at the behest of a potential buyer. We asked who would be conducting the interview process and were told the club wanted to give Matthew Bates a chance as Caretaker. While we understand he has ruled himself out of the running for the position of full time manager, we are struggling to see how the club could actually appoint and then pay a new manager given the current financial situation.

We hope this gives members a better understanding of the situation at the club. As a Board we feel that Mr Blackledge now holds all of the cards, and that he needs to be realistic about what he can hope to recover financially from the current predicament. It would be in everyone’s best interests for a sale to be concluded, given Administration now seems certain to involve a drop of at least 2 leagues, which would seriously devalue his asset.

We would like to thank Pam and John for their time, and for clarifying our understanding on a few points.

We plan to make a further statement at the end of next week.

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