Coventry City to be docked 10 points after High Court hearing
Crisis club Coventry City are facing an automatic 10-point deduction from the Football League after being ruled to be "in administration" following Tuesday's High Court hearing in London.
"An administrator has been appointed," said James Powell, from solicitors Walker Morris, acting on behalf of Arena Coventry Limited.
"That never sounds great." he told BBC Coventry & Warwickshire.
"But it is probably good as it will provide stability for the club."
The Sky Blue saga
BBC Radio 5 live's Midlands correspondent Pat Murphy:
"It seems certain that Coventry City will be deducted at least 10 points.
"ACL today withdrew its application to place the club into administration. It was ruled that City had already done that by placing a subsidiary company (Coventry City Football Club Ltd) into administration last Thursday.
"This afternoon in the High Court there'll be a hearing over costs but the next significant move comes from the Football League.
"More than 10 points could be deducted if the Football League rules that placing the subsidiary company into administration was just a ruse, by stating that one subsidiary company was different from another involving Coventry City.
"If the Football League decrees that this is just about one club, rather than subsidiaries, then Coventry may incur a further punitive deduction."
City had been taken to court to face an administration order from ACL, their Ricoh Arena landlords, over a year's unpaid rent of £1.3m.
The hearing, originally scheduled for Friday, had been adjourned to allow the respective legal teams to analyse the repercussions of Coventry City Football Club Limited, the non-operating subsidiary company that held the lease and licence for the Ricoh Arena, going into administration last Thursday evening.
The League One club's owners Sisu claim that it is just a property subsidiary, with no assets of its own.
But, if Coventry City Football Club Limited are deemed to hold the Golden Share, which entitles them to membership of the Football League, then the club will be deducted 10 points.
"You have got to look at what state the club was in," added ACL representative Powell. "Our client was getting increasingly concerned that this could end up with the club going into liquidation and then the club would have disappeared.
"The barrister for the administrators even said it was 'a catastrophic insolvency', so you have to ask the question of how it got to that point in the first place.
"That sounds bad but in actual fact it is good and the club may now be able to find a purchaser."
Arena Coventry Ltd
- ACL manage the Ricoh Arena on behalf of the stadium's joint-owners.
- Coventry City Council own a share of the 32,000-capacity ground, along with the Alan Edward Higgs Charity, who have been made an offer for their share by the Sky Blues' latest prospective owner, US-born global businessman Preston Haskell IV.
Following ACL's action earlier in the day, Sky Blues chief executive Tim Fisher said: "I acknowledge that ACL has now accepted that it must withdraw its administration application from the High Court notwithstanding the fact that this was an unwelcome and unnecessary distraction.
"I hope all parties will now focus on re-establishing a constructive dialogue for the good of the club and football in Coventry.
"We would like to ensure that Coventry City Football Club can, in the first instance, continue to play its remaining home matches this season at the Ricoh Arena."
Reports had been suggesting that Coventry might still try to resolve the ongoing rent row by playing home games away from the Ricoh Arena, their base since 2005 when they left Highfield Road, their home for the previous 106 years.
But their first concern is awaiting official ratification of a 10-point deduction that immediately halts their bid to return to the Championship at the first attempt.
Coventry stood just five points adrift of the League One play-off places on Tuesday morning, but will now drop five places to 14th, once the 10-point penalty has been applied.