Portsmouth fail to pay players' wages

Portsmouth have failed to pay their players' wages for January, the club have announced in a statement.

The club were issued with a winding-up petition by HM Revenue and Customs on 3 January and will appear at the Royal Courts of Justice on 20 February.

Portsmouth have had their bank accounts frozen as a result of the petition.

Pompey's parent company, Convers Sports Initiatives, entered administration in November, forcing the Championship club to search for new owners.

Administrator Andrew Andronikou revealed that Pompey have missed two tax payments of £800,000 to HMRC.

There is an urgency to complete a deal with fresh backers, as investment is needed if Portsmouth are to meet ongoing running costs.

ANALYSIS

This is as bad as it can get for Portsmouth without the club ceasing to exist

Guy Thomas, Insolvency lawyer & football finance expert

BBC South understands that any purchaser would need to provide £12m as proof of funds, and assurances they could meet another £20m in repayments to former creditors, Balram Chainrai and Alexandre Gaydamak.

The Portsmouth Supporters' Trust met with local businesses last Thursday in an attempt to form a consortium to help save the Championship club.

"Further to our recent update that a winding-up petition has been issued and publicised to Portsmouth Football Club, the club's bank accounts have been frozen, which is the normal process in these circumstances," read the statement.

"The club is now seeking a validation order from the court in order to have its bank accounts unfrozen so that staff wages and suppliers can be paid.

"This is expected to take a few days and once obtained this will allow our bank accounts to be reactivated.

"Based on our current information we expect this process to be completed by the end of the week and would like to thank all our staff, fans and suppliers for their ongoing support."

In order for Portsmouth to gain that validation order they will have to convince the Court that ordinary creditors will not lose out by allowing the club to keep using its bank account.

One reason would be if the club can show that by carrying on, the creditors would be better off then if the bank account stayed frozen.