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Administrators' Modus Operandi Affects Burnley FC

Administrators' Modus Operandi Affects Burnley FC

One of Brendan Flood's companies Salford-based property firm Modus Ventures Ltd went into administration in May 2009 owing the bank £23.6m after being affected by the credit crunch and world wide recession.

Modus Ventures owned more than 40 subsidiary companies in the UK, many of which were involved in the retail property market a sector particularly hard hit by the global downturn.

Accountancy firm KPMG were appointed to oversee the administration of the company.

What has this to do with Burnley FC you might ask other than the fact that Brendan Flood is also Operational Director of Burnley FC?

Well it would appear that KPMG are claiming that the club now owe Modus £3.7m of loan repayments following the Clarets successful season and promotion to the Premier League.

The loans, plus interest, were due for repayment on July 1 but it would now appear Modus and the club via their solicitors have been arguing over the exact amount owed.

A recently filed administrators' report issued by KPMG read:

"Burnley Football Club's solicitors have advised us that an element of the debt is disputed'

It goes on to say that:

"Substantially all of the debt is due for payment following receipt of funding from the Football Association Premier League."

Burnley FC's most recent set of filed accounts also show that Brendan Flood provided a directors loan to the club of £2.7m although this is not related to the £3.7m.

It is anyone's guess what the final outcome of this will be and god only knows to what degree Brendan Flood is now involved with this unfortunate situation having as it were a foot in both camps. We may indeed have to wait for an official club statement on this and probably the sooner the better.

Vital Burnley wish to thank Burnley FC for the use of the photograph.


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Writer:turfmanphil
Date:Wednesday July 29 2009
Time: 7:42PM

Comments

0
Oh heck, you could forgive some fans after the ticketting news and now this for thinking that maybe this promotion lark is not all its cracked up to be! Who could we buy for £3.7 million?
turfmanphil
29/07/2009 19:49:00
0
You could look at this another way, tmp, and say thank goodness we were promoted because, if the administrators came after the loan and we hadn't been promoted, we might be in a significant spot of bother. Soon after Wembley I posted something on Vital about hoping the Board would use the Prem windfall to ensure the club could cope with anything major happening to any of their significant directors. How many other loans from directors are there? How much is loaned from companies, rather than individuals? How secure are each of those loans in a recession? I think we can assume the Board is looking hard at this. I also suspect we should be glad we had the loan from Modus, even if we now have to pay it back, as presumably it helped us last season and/or with cash flow in arranging transfers to date. Anyway, this might at least make Wednesday realise they have to take our Tudgay offer or forget it. Also we need to remember that this doesn't all of a sudden make Flood a bad director. He has done a lot of hard work in helping Burnley, and I hope he will continue to do that. Up the Clarets!
Couch Potato
30/07/2009 07:12:00
0
erm tudgay has just signed a four year contract! how do you like them apples!
BIG TONY
30/07/2009 11:57:00
0
One of the things I don't like about modern football is the way that money dominates things. I suppose it was ever thus but I wish we could just concentrate on matters on the field. However, CP has this spot on. If we HADN'T gone up what sort of state would the club's finances have been in ?
RickersTwickers
30/07/2009 12:17:00
0
Tudgay's loss and good on Coyle for sticking to his guns and not paying over the odds for a player.
turfmanphil
30/07/2009 12:22:00
0
Guess we just have to wait for the solicitors to battle this one out and I would expect we might get a club statement on this soon. We are certainly better placed financially now we are in the Premier League and it's a moot point how long we could have survived financially in the Championship. I did hear we would have been in trouble last season had it not been for the Cup runs and promotion, Six of the Championship clubs I believe were in dire financial straits, Southampton obviously but I did hear that even Preston were not that finacially secure in these hard times. The other question I guess is what degree the global downturn has had on the clubs and how quickly we can get out of it,
turfmanphil
30/07/2009 12:29:00
0
Did Ray Griffiths (RIP) have any loans at Bfc or was his investmant all in the form of shareholdings? If loans, the Board and club solicitors may well be having to work on this too. Sorry - I am worrying if I have remembered his name accurately.
Couch Potato
30/07/2009 15:13:00
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