LONDON, March 2 – British tax authorities are to mount a legal challenge to Premier League crisis club Portsmouth's decision to enter administration, the bottom-of-the-table side announced Monday.
Portsmouth’s administrator, Andrew Andronikou, said the club would be in court on Tuesday as a result of a challenge by Her Majesty’s Revenue and Customs (HMRC).
However, Andronikou added he was "not unduly worried" by HMRC’s move.
"We’re having to go to court to show that the debenture is valid," he said.
"I don’t understand the exact reason why this is, we’re just following normal protocol. We’re not unduly worried.
"It’s not standard procedure but I’d imagine that HMRC are dotting their ‘Is’ and crossing their ‘Ts’.
"We’re expecting the administration to proceed as it was."
An HMRC statement issued later on Monday said: "This matter is before the courts on Tuesday. HMRC will be making no further comment at this stage."
Had Portsmouth not become the first Premier League side to enter administration last week, the 112-year-old club would almost certainly have been liquidated on Monday.
That was when a High Court judge was due to rule on a winding-up petition brought by the British tax authorities over an unpaid Value Added Tax (VAT) bill of 7.5 million pounds.
Portsmouth’s decision to enter administration means HMRC have become an ‘unsecured creditor’ and so have moved down the list of organisations that are owed money by the club, with the south coast side having to pay-off directly football-related debts before turning their attention to their tax bill.
Pompey, whose total debts are reported to be around 60 million pounds (90 million dollars) are four points adrift at the foot of the table despite a win over fellow strugglers Burnley last weekend.
The move into administration is likely to lead to a nine point deduction from the Premier League for financial mismanagement, which would all but assure Portsmouth’s relegation to the second-tier Championship division.
