Chester City: D-Day looms for the Blues

Jun 4 2009 Chester Chronicle

D-DAY is looming for Chester City after its administrators revealed they will attempt to push through the sale of the debt-ridden club a week today.

Chester City Football Club Limited, the company presently behind the Blues, owe in excess of a staggering £7m.

But administrators Refresh Recovery Limited say liquidation can be avoided after they accepted a bid of £290,000 from Chester City Football Club 2004 Limited.

Stephen Vaughan, who placed the club into administration last month following its relegation out of the Football League, is the man behind the bid.

Vaughan is Chester’s major shareholder and creditor with more than £4m in secured loans.

He is willing to waive the money owed to him, however, under the Company Voluntary Agreement (CVA) that will be put forward by the administrators to the club’s creditors at a meeting at the Deva Stadium on Thursday, June 11 (11am).

A CVA enables a company to agree with its creditors how its debts should be paid and in what proportions.

Under the proposed CVA, an estimated divided of 15 pence in the pound will be paid to the club’s creditors, which include HM Revenue & Customs and the Chester City Supporters Trust, over a four-year period.

A CVA requires the approval of in excess of 75% in value of those creditors voting on the resolution.

The Blues need the CVA to be passed if they are to be accepted into the Football Conference at its AGM on Saturday, June 13. But, even if it is passed, City will almost certainly start the 2009-10 Blue Square Premier season on minus 10 points.

Chester owe the Football League £72,000 and, unlike, non-footballing creditors, they have to be paid in full. This debt is likely to be deducted from the League’s £225,000 parachute payment awarded to clubs who are relegated from League Two.

Vaughan, who has asked the various City supporters groups to contact him to discus how the club can move forward, is the only bidder to have an offer accepted by Refresh Recovery.

Germany-based David Jones, a former Blues player and coach, has reportedly withdrawn a bid of £290,000 he made earlier this week.

The Chronicle was unable to contact Vaughan as we were going to press.