Originally Posted by
wrinkly
What winds up (pun intended) HMRC are the CVA provisions for football clubs - not that this is relevant in Southend's case.
HMRC used to be preferential creditors in insolvencies (they got first dibs on the remains of the company)
Since 2003 that has not been the case - they became unsecured creditors.
To make matters worse, for HMRC and other creditors, the league have a "football creditors rule". Put simply - football creditors (e.g. the league, other clubs, players) have to be paid first in an insolvency event. If that rule is broken the club cannot continue in the league. So - pay your footie mates first or cease to exist. This "loophole" has meant that the footie debts have been paid first to the detriment of HMRC and other creditors. HMRC, understandably, don't like it and so they invariably vote against CVAs. They have also challenged the ruling, unsuccessfully.
From 6 April this year HMRC should regain preferred creditor status. I say "should" because business doesn't like it and have challenged it - I'm not sure how that went.
I don't know if HMRC's new status will trump the "football creditors rule" though