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Background to Chelverton's liquidation
The creditors of the Chelverton Group Limited are likely to confirm the appointment of a Liquidator tomorrow (Tuesday).
The directors of the company recently decided to initiate the procedure by calling a meeting of their shareholders. They passed a resolution to wind up the company.
A liquidator should conduct a relatively quick investigation into the affairs of Chelverton Group Limited. He will then call a meeting of the creditors. No other 'Chelverton' company is believed to be involved.
The liquidator has four main tasks:
- To convert the assets of the business into cash.
- To adjudicate the claims of the creditors.
- To investigate and report upon the conduct of the officers of the company.
- To make payments to creditors in order of priority.
In many cases the liquidators is asked to sell the assets of the business to another party. This can include the former directors or shareholders. This is known as a Phoenix.
Phoenixism is legal provided the rules are observed and the liquidator maximises the interests of creditors. He can sell the business to a 'connected party' provided he obtains the best possible value for the assets having advertised the assets for sale.
All the above may seem a long way from Edgar Street, but this liquidation could have a bearing on the future of the club.
Chelverton Group Limited owns Formsole to whom the debts of Hereford United are owed. Formsole has no employees and its sole interest is in Hereford United. Formsole is not in liquidation but is one of the assets of Chelverton and so could be sold to raise money for the liquidator. Much could depend on whether the liquidator decides to sell Chelverton as a whole or split the company.
Chelverton lost £13,337,776 last year according to their accounts. It is believed that a deal to sell part of the company fell through recently and there have been financial problems in parts of Europe, particularly in Poland. One of their bankers is understood to be concerned.