Women’s Championship club Coventry United have been deducted 10 points by the Football Association, two days after they were rescued from the brink of liquidation by an eleventh-hour takeover.
Despite narrowly avoiding closure thanks to Energy Angels CEO Lewis Taylor’s last-gasp purchase of the company – which has been verbally agreed and is set to formally conclude in the coming days – the club have been punished by the FA for triggering an insolvency event, in accordance with the league’s rules.
Coventry United announced on 23 December that they had entered ‘voluntary liquidation’, and they subsequently issued their players and staff with redundancy notices. Taylor’s takeover has saved the club from that fate, but with the club already having issued instructions to liquidators BK Plus, the penalty imposed by the FA means they will now drop from 6 points to -4 points, slipping to the bottom of the Championship table below rivals Watford and into the division’s sole relegation spot.
Telegraph Sport understands that Coventry’s new owner is considering lodging an appeal.
The most recent points deduction relating to insolvency rules in the English professional women’s game came in 2019, when then top-flight side Yeovil Town were similarly deducted 10 points. In Yeovil’s case, the penalty came after they formally signalled their intent to appoint administrators, although subsequent financial support from the FA meant that the Somerset club ultimately never entered administration.
Taylor completes takeover
Coventry United were rescued from the brink of liquidation after shareholders reached a verbal agreement for an 11th-hour sale of the club.
Businessman Lewis Taylor, who owns Energy Angels, the Midlands-based energy company, is now to become the sole owner of Coventry United, who went into “voluntary liquidation” on December 23 and had been set to be shut down by liquidators BK Plus on Tuesday night at 11.49pm (GMT).
But that was avoided after a deal to save the club was agreed in principle on Tuesday, leaving Taylor poised to essentially purchase the company for £1 in exchange for taking on the existing debts.
The formal takeover of the club may take a few more days to complete, but the verbal agreement between the parties had been deemed sufficient to call off the liquidators and halt the process of closing down the company.
Taylor vowed to invest in the region of £200,000-250,0000 initially to ensure the club can complete the season and plan for the future.
In an interview with Telegraph Sport, Taylor said it was the “right thing to do” to try to buy the club. He wants to pay the players and staff’s wages for December straight away – which multiple sources have said had not been paid by the club – and get the squad back on the training ground as soon as possible.
Reacting to the news of the verbal agreement on Tuesday evening, Taylor told Telegraph Sport: “The heads of terms have been agreed, so this has successfully halted the liquidation process. That’s the biggest win that we wanted from today and it’s come off.
“It might take up to a week to get the whole thing done, we still need to do the legal transfer of ownership of the club, which will now take place over the coming days, but this is stage one complete.
“I want to let everyone know that the current owners and BK Plus have been hugely supportive in this process, this hasn’t been a bunch of aggressive people around the boardroom table trying to sort this, it’s actually been a lot of like-minded people all trying to get together to help save the football club.”
Taylor is already a financial supporter of women’s football, as his company Energy Angels sponsor Wolves Women, who are third in the northern section of the third tier of women’s football.
Coventry United ran into financial difficulty after becoming a full-time, professional side last summer.
Taylor intends to give his full backing the team’s manager, Jay Bradford, and believes the squad are more than capable of staying in the Championship this season despite the points deduction.
Meanwhile, a public, crowdfunded money-raising for the players – who were “devastated” after being told the club would be shutting down remotely via a Microsoft Teams video call on December 23 – has passed £14,000 in donations as of Tuesday afternoon.
Their first scheduled match back after the Championship’s winter break, an away trip to Bristol City on January 9, was called off according to a statement by the West Country club on December 29.
A statement from liquidators BK Plus said: “Since the beginning of December 2021, accountants and business advisors from BK Plus have been working with the company, initially seeking a buyer for the company, and, when it appeared that no buyer would be found, commencing the liquidation process. On 4 January 2022 at 4:52pm, those instructions were terminated, and the company did not proceed into liquidation.”
Richard Tonks, Insolvency Practitioner at BK Plus added: ”Notice of the liquidation caused understandable disappointment to everyone connected with the club, not least the players and staff. Notice of the proceedings also gathered a lot of external interest and concern, and resulted in offers to try and save the club from parties in the UK and abroad.
“It is unusual to be in a position of dealing with parties wanting to rescue a company that, for all other intents and purposes, is at the point of no return. However, we were happy to work with the company over the festive period providing information and support to a number of parties who had expressed a desire in preventing the Company from being placed into liquidation.
“With a statutory deadline looming, all parties needed to act quickly to avoid the liquidation and we were pleased to be part of the process resulting in the agreement of heads of terms to sell the Company’s shares. Our instructions to place the Company into liquidation could then be terminated. Clearly, a sale still needs to be finalised and we remain on hand to support all of the relevant parties with a view to completing a sale as soon as possible.”