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Portsmouth suffer fresh setback after HMRC appeal

Portsmouth's Fratton Park
Fratton Park will be hosting Championship football next season

Portsmouth have suffered a fresh blow after Her Majesty's Revenue and Customs lodged papers in an attempt to prevent the club coming out of administration.

Last month, Pompey saw a Company Voluntary Agreement (CVA) approved that would allow them to repay unsecured creditors 20p in the pound.

However, HMRC claims the amount it is owed allows it to block the CVA.

It means that Pompey will remain in administration and under a transfer embargo until the appeal is heard.

And the club's administrator Andrew Andronikou, who had been anticipating HMRC's appeal, warned the case may not be heard until October or November.

That could severely hamper new manager Steve Cotterill's plans for the coming Championship campaign, though Andronikou noted the club would be able to sign players until their squad numbered at least 20 players.

Portsmouth currently have 18 players listed in their first-team squad.

606: DEBATE
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For a CVA to be agreed, it must win the support of those owed at least 75% of the unsecured debt. The vote on 17 June saw the agreement win 81.3% of the vote.

But HMRC argues that £13m of debt was left out of the original calculations; if the £13m figure is included, says the HMRC, it would then have more than the 25% of the debt it needs to block the CVA.

"We are acting in the interests of all those creditors who are not in the football industry. We don't think it's right that they are offered 20p in the pound against full repayment all others," an HMRC spokesman told BBC Sport.

"HMRC feel we have been or will be unfairly prejudiced by the decision to accept the CVA, because we believe there were material irregularities in the way in which the votes of creditors were counted at the creditor meeting and because, to our knowledge, the full amount of our claim should have been admitted for voting purposes.

"Also we cannot agree with the striking out of £13m of debt which seriously undermined our ability to challenge the CVA."

BBC Sport understands the club could start the Championship season without any further points penalties, having been deducted nine points by the Premier League last campaign.

But the transfer embargo will be a problem for the south-coast club who were relegated from the Premier League last season following a campaign of complete turmoil.

Speaking on Wednesday before the news of the appeal was confirmed, Andronikou described the situation as an "irritant".

"It's going to be an irritant and, to put it simply, the embargo will stay for a longer period," said the administrator.

"As long as there is an appeal process, the registration embargo will continue to be in force for the foreseeable future.

"However, we expect any appeal hearing to be held in October or November. Before then, if the squad is below 20, we can still bring in players, regardless of the embargo. That is allowed and is something we are looking at."



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see also
Portsmouth creditors accept deal
17 Jun 10 |  Portsmouth
Portsmouth start against Coventry
17 Jun 10 |  Championship
New twist in Pompey creditor saga
07 Jun 10 |  Portsmouth
Pompey chief keen to land manager
04 Jun 10 |  Portsmouth
Pompey creditors offered 20% deal
26 May 10 |  Portsmouth
Portsmouth debts close to 120m
21 Apr 10 |  Portsmouth
Pompey administrator role probed
02 Mar 10 |  Portsmouth
Portsmouth Europa appeal rejected
22 Apr 10 |  Portsmouth
Portsmouth enter administration
26 Feb 10 |  Portsmouth
Points deduction unjust - Grant
27 Feb 10 |  Portsmouth
Pompey labelled 'dysfunctional'
26 Feb 10 |  Portsmouth


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