Why has Jim Rushe put Northwich Victoria Football Club (2004) into administration?

When Rushe, along with Nick Bone and Ian Campbell, bought the company off Mike Connett for a nominal fee in December 2007, he also agreed to take on its debts.

The consortium made a six-figure one-off payment to HM Revenue and Customs (HMRC) to ward off the threat of liquidation before agreeing a structured payment plan to pay off the sum owed to the public purse.

But Rushe has struggled to keep up with instalments.

The club went more than two months without a home match at the turn of this year after then landlord Connett locked the team out of the Marston’s Arena.

That led to players not being paid and, with sponsorship and other revenue streams drying up as the club was left homeless, HMRC went without its money too.

When they did return, crowds dropped to around 500 due to the team’s position at the bottom of the Blue Square Premier.

The tax man lost patience, preferring instead to push for a winding-up order.

That case had been adjourned on half a dozen occasions before the club applied for administration this week.

What will happen to HM Revenue and Custom’s petition to wind up Northwich Victoria Football Club (2004) Limited?

The petition is likely to be dismissed by the tax man.

From the moment formal notice is given of the intention for a company to move into administration – something Vics did on May 5 – there is a statutory moratorium, which effectively blocks hostile enforcement action being taken by any of the company’s creditors.

What happens now?

Rushe has relinquished control to administrator Daniel Hennessy, who will now manage the business.

His job is to prepare proposals for approval by the club’s creditors, initially with the aim of rescuing the company as a going concern.

Are Vics up for sale?

In effect, yes. One option open to Hennessy is to seek investment that will start to clear the club’s massive debts.

However there is no indication at this stage though that there is anybody interested in such a deal.

What is the planned exit route?

Rushe told the Guardian this week that a rescue plan with Hennessy would likely take the form of a Company Voluntary Agreement (CVA); a legally binding agreement with creditors about how the debt will be repaid.

It usually amounts to paying them a fraction of what they are owed. That of course, is if they agree to the proposal put to them.

Under such an arrangement Rushe would remain at the helm.

To work, Hennessy must call a meeting of all the club’s known creditors within 10 weeks of the order being made (in this case by July 10 because he must give 14 days’ notice).

At that meeting a proposal for a CVA will take effect if it is accepted by in excess of 75 per cent in value of the creditors present and voting.

A second vote requires simple majority (ie 50 per cent plus one) support from ‘unconnected’ creditors – that is those not associated in some way with Northwich Victoria Football Club (2004) Limited.

Will this succeed?

Difficult to predict.

Contrary to popular belief Jim Rushe and former backer Nick Bone are the company’s two biggest creditors, not the tax man.

HMRC routinely opposes any deals offered by football clubs in administration – a move viewed by experts as a protest against its position as a low-priority creditor.

Rushe’s relationship with the tax man over Vics’ debt has been a good one after he initially made moves to reduce the club’s massive arrears to the public purse.

Whether that will persuade HMRC to write off a large chunk of said bill is another matter.

Meanwhile Rushe, as Vics’ sole director, is a connected creditor and therefore would be barred from casting his ballot in the second round of voting explained above.