http://soccernet.espn.go.com/news/story?id=811870&sec=england&cc=4716High Court save Portsmouth in HMRC battle
By Soccernet staff
August 5, 2010
The High Court have ruled in the favour of Portsmouth in their high-profile case against Her Majesty's Revenue and Customs (HMRC) which provides the cash-strapped club with a lifeline.
Mr Justice Mann announced that he had found against an application by HMRC that the company voluntary arrangement (CVA) made with creditors to bring the club out of administration was flawed.
HMRC had argued at a two-day hearing this week the CVA was "unfair and seriously flawed'' as it gave preference to football creditors, including players, who were able to claim up to 100% of monies owed them, while other creditors, including the Revenue, would receive much less. HMRC also argued they are owed £13 million more than the £24 million value put on their claim. The administrators disputed the accuracy of the taxman's figures and assessments.
Portsmouth could have been liquidated if they had lost and, although the decision had been expected to go to the Court of Appeal, HMRC have decided not to take the case any further.
''I find that none of the five heads of attack by HMRC amount to unfiar prejudice nor have they been materially affected,'' Mr Justice Mann said. ''In my view, HMRC will not be worse off by the situation left by the CVA bearing in mind what the alternatives could be for the club. Those alternatives are liquidation, or expulsion from the Football League or worse, bearing in mind the loss of a lot of their assets.''
Pompey were docked nine points for becoming the first Premier League club to go into administration and were relegated to the Championship at the end of last season and chief executive David Lampitt expressed his delight at the decision, describing it as a ''huge relief'' for the club.
"We're delighted and relieved at the outcome announced today in the High Court,'' he told the club's official website. "We will wait to see the detailed findings. However, it's obviously a massive step forward in the process towards getting this great club back on its feet.
"I would like to give my personal thanks to all those who have supported us through this difficult period, in particular our fans, commercial partners and Portsmouth City Council. The result is a huge relief to the staff here whose loyalty has been unswerving and whose hard work has held the club together."
In a statement, HMRC said: ''HMRC is naturally disappointed not to have won this appeal and we can confirm that we do not intend to appeal.
''Our aim when pursuing debt of any kind is to achieve a fair outcome for the taxpayer and we will take this forward in the wider context of the football industry through separate and outstanding legal proceedings over the status of the so-called Football Creditors Rule'.
''This is an important and complex judgment and until we have had the opportunity to study it in detail we can't comment further.''
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