Simon Passfield was instructed by Burges Salmon LLP to act for Arena Coventry Limited, Arena Coventry (2006) Limited and IEC Experience Limited (“the Companies”) in respect of their successful applications to the High Court for administration orders.
The Companies are part of a group which owns and operates the Coventry Building Society Arena, which is the home stadium of Coventry City FC and, until recently, Wasps RFC (“the Stadium”). The Companies and are substantially insolvent (in particular, owing approximately £35m to bondholders in respect of corporate retail bonds issued in 2015 which fell due for payment in May 2022, the repayment of which was secured by fixed charges over the Stadium) and, due to the significant burn rate associated with the Stadium, could not afford to trade beyond the end of October 2022 without significant funding.
On 1 November 2022, following an accelerated marketing process, the Companies entered into an exclusivity agreement with Frasers Group Plc (“FG”), which agreed to pay a non-refundable deposit of £1.2m pending the conclusion of negotiations. Subsequently, the Companies accepted FG’s offer to purchase their business and assets for £17m, on condition that those assets were transferred free from any security and that the purchase completed by 11.59pm on 17 November 2022.
By their applications, the Companies sought: (i) orders appointing Rajnesh Mittal and Andrew Sheridan of FRP Advisory Trading Limited (“the Administrators”) as administrators; and (ii) orders pursuant to para.3(1)(f) of Schedule B1 to the Insolvency Act 1986 permitting the Administrators to dispose of the Companies’ assets free from security.
On 16 November 2022, Doug King (who had that day purchased a majority stake in Coventry City FC) announced that he wished to purchase the Stadium. At the hearing on 17 November 2022, he sought an adjournment to enable him to put forward an offer of £25m. However, ICC Judge Prentis was satisfied that there was insufficient substance to Mr King’s proposals to allay the immediate fears as to how the Companies could continue to trade, given that it would have no funding to meet approximately £460,000 of liabilities falling immediately due for payment.
Accordingly, the Judge granted the applications sought.
Further details of the case can be found here:
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