I am getting a little confused about the oft-quoted "we have not got enough money for administration" line.
As I understand it:-
administrators are appointed for the benefit of all creditors and their primary goal is to recovery as much money as possible for distribution to such creditors. This is either achieved by way of turning an otherwise failing business around (assisted by a moratorium - including from HMRC - on litigation and the ability to disclaim onerous contacts) or by deciding that the business is not viable and selling the assets off to recover as much money as possible (to pass on to creditors).
Commonly in these troubled economic times, administrators operate by selling on a "pre-pack" basis by which all of the good bits of the business are bundled together and sold to the highest bidder. This divorces the assets from the creditors (debts are left with the old owners of the business) but the money from the sale is then distributed among the creditors. It is viewed by some as dishonest (particularly where the original owners actually buy back the business, albeit now debt free). It does tend, however, to realise a better price than an asset sale on a piecemeal basis.
I cannot believe that a football club that has (off the top of my head) a ground worth a couple of million, massive amounts of IP (trade marks, copyright and possibly design rights), some decent player contract assets (although debatable after today!) and goodwill cannot be packaged up into an attractive bundle for a new owner to buy once it has been divorced from its debts.
This would mean that creditors (which includes members of the board?) would only recover a fraction of what they were owed and that their shares in whichever entity currently owns the club would be worthless. Other than the obvious disincentive for the current owners in taking such a hit on their purchase/loans I do not understand why this should not be possible?
Can someone help me on this as I genuinely do not understand it!
I apologise for posting on such a boring legal/accountancy topic but, having sat through the game today, it cannot be much worse than the second half (comedy value of Timar as "Roy of the Rovers" upfront aside)...