Creditors shocked into silence

A WALL of silence descended today as shattered creditors discovered how much they could expect to receive from the administrators of Ipswich Town.

Unsecured creditors of the club – including most of the small businesses who have done business at Portman Road over the last few years – can expect to get just 5p in the pound.

This will rise to as much as 20p in the pound if the club are promoted and stay in the Premiership.

But no one was prepared to talk to The Evening Star about their plight today – the silence was prompted by fears about their own businesses' survival.

"This is a very difficult situation for many companies," said Bob Feltwell from the Suffolk Chamber of Commerce.

"At times like this businesses do not want to talk to the media because it affects their livelihood.

"I do not think any business wants their exposure to the club aired through the media.

"I know there are a few businesses which are affected and it is really serious for them."

Mr Feltwell feared some companies would be concerned about their own survival after the administration.

And he was angry that highly-paid footballers were protected by Football League rules which say their contracts must be honoured – or the club could be thrown out of the league.

"It looks as if there is one rule for the expensive footballers and another for the local firms who are trying to do business in the area."

It was revealed today that the club is facing £54million debts – the Star revealed yesterday that administrators and club bosses were confident of coming out of administration at the end of the season.

Club chairman David Sheepshanks urged creditors to accept the deal after the club's administrators Deloitte and Touche reached an agreement with the secured and preferential creditors.

A meeting has been called of all the creditors to consider the proposals on May 2.

But Suffolk business leaders have warned that firms in the area could face devastating losses by recouping only a fraction of what they owed from the club.

Not all creditors are seriously concerned.

Christine Hurst from Christine's Florist in Bramford Road, who has been serving the club since Sir Alf Ramsey opened the account more than 30 years ago, said she would be OK.

She is only owed £200 by the club. She said: "I know £200 is quite a lot of money to us but it is still negligible to what others are owed."

While she would often do arrangements for players and managers she said they would usually pay by credit card and any other flowers done for events would be paid by the company hosting it.

But other creditors contacted by the Star today refused to give a view about the proposed deal.

Many company bosses were uncontactable – while those who were in the office refused to make any comment.

Ipswich Town is not the only club facing a bad situation. Leeds United has debts estimated at £70million although they are almost certain to get a place in the Premiership next season and their players will be worth more money than those at Town.

Even creditors with preferential status, such as the government departments responsible for collecting Income Tax and VAT, face a shortfall of 50p in the pound.

The signs are that the proposal for a Company Voluntary Arrangement (CVA), drawn up by the administrators who were called in by the club in February, will win acceptance.

A number of key creditors, including the government offices and the club's principal bankers, Barclays, have indicated their support – with the alternative being liquidation which would leave most creditors receiving nothing at all.

The proposal will be put to a meeting of creditors which is to be held at the Portman Road ground on Friday, May 2.

For approval, it will require the support of creditors accounting for 75% of the debt owed to those voting.

nIs 5p in the pound enough for small companies? Are you owed money by Ipswich Town? Send your views to: Your Letters, Evening Star, 30 Lower Brook Street, Ipswich, IP4 1AN or e-mail eveningstarletters@eveningstar.co.uk