Latest Les Reid report (1 Viewer)

THE Sky Blues could be heading for a ten-point league deduction this season after Ricoh Arena bosses dropped their High Court action today.

During a day-long hearing in London, Mrs Justice Proudman heard the football club owed £60million to creditors.

Some £8.4m of that is owed to Cayman Island hedge fund Arvo. The bulk of the rest is believed to be owed to funds related to Sky Blues owners Sisu.

Arena Coventry Ltd lawyers asked the judge to dismiss ACL’s application for an administration order against Coventry City Football Club Ltd.

After an adjournment the judge agreed to do that. It means ACL accepts that Paul Appleton, the administrator appointed last Thursday by Sky Blues hedge fund owners Sisu/Arvo should remain, rather than another administrator ACL had preferred.

The judge accepted ACL’s call for a further probe of both companies and their assets to be presented to the court - at a later date - in at least six weeks time.

The court also heard a dispute over who pays legal costs.

Adam Goodison, barrister for CCFC Ltd administrator Paul Appleton, of Rubin and Partners, said that creditor liabilities made it a 'catastrophic insolvency'.

ACL lawyer James Powell told the Telegraph the stadium firm - owned by Coventry City Council and the Alan Edward Higgs Charity - would keep a keen eye on the club’s administrator to ensure it discharged its duties correctly.

He argued that would include looking favourably on any prospective purchaser to take over the football club to bring “stability”, and ensure its future, free from any liquidation threat.

Mr Powell denied ending ACL’s attempt to have its chosen alternative administrator appointed to run CCFC Ltd handed the whiphand to SISU boss Joy Sepalla and its Cayman Island-based linked Arvo Master Fund - as the club’s main creditor believed to be owed over £50m by the club.

He said the High Court adjournment ACL was granted on Friday had enabled confirmation that the Sky Blues’ crucial “golden shares” with the Football League and Football Association rested with CCFC Ltd, the company now in administration.

He claimed it confirmed the golden shares were not with the club’s trading arm Coventry City Football Club (Holdings) Ltd, as the club appears to claim.

Mr Powell, speaking outside the court, said ACL claimed it means the whole club is already in administration beyond any dispute.

Mr Powell said: “We had a letter from Football League confirming share is with Coventry City FC Ltd. The FA also confirmed the FA share is with Coventry City FC Ltd.“That company is in administration, with administrator appointed by Joy Sepalla.

“We held off our application for a few days to get to the bottom of key issues including Football League shares. We’re grateful to the Football League.

“There were inconsistencies in statements from the club. It’s clear to us the whole club is in administration.

“Coventry City FC Ltd is not a non-operating subsidiary as club claims. The club exists where Football League and FA shares rest, with CCFC Ltd.

“We’ll keep keen eye on administrator appointed by Arvo, which is SISU and Joy Sepalla.

“Our focus shifts onto this administrator doing a good job. Administration gives best opportunity to a prospective purchaser to buy the club.”

All eyes are now on the Football League to see if it now accepts the club is in administration and to deduct ten points from their promotion push.

Yesterday’s events left many fans bewildered as to whether the club as a whole is in administration. One arm of the club CCFC Ltd is now indisputably in administration. But CCFC Holdings Ltd is not and is still owned by Sisu or its linked Cayman Islands hedge fund Arvo.

Tim Fisher, CEO Coventry Football Club, said: “I hope all parties will now focus on re-establishing a constructive dialogue for the good of the Club and football in Coventry.

"We would like to ensure that Coventry City Football Club can, in the first instance, continue to play its remaining home matches this season at the Ricoh Arena.”

The Football League has confirmed to the Telegraph that a decision about the ten-point deduction has not yet been made and there is unlikely to be any developments tonight

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