Club news

2013: A CONVULSIVE YEAR FOR DEPORTIVO

28 Dec 2013
Few years can be more convulsive than 2013; the club went into administration, it suffered the relegation to Segunda and was even close to suffer a new demotion in a chaotic July’s day. Even president Lendoiro is stepping down after 25 years.

The year 2013 began for Deportivo with the well-known rumor that the club was going into administration. On January 10 it was finally confirmed that the club presented the paperwork to the judge asking for the protection of the bankruptcy law after failing to reach an agreement with the Tax Agency (AEAT), institution that one year before it had sequestered the major part of Depor´s incomes. In this way it was the 23rd club in Spain that was going on administration.

At the time president Augusto César Lendoiro tried to explain the reason why the club had to make this decision, "This is a pity, but it isn't a shame as he did everything we could in order to reach an agreement with the Treasury. The Treasury pushed us to make this decision, but we still think the same thing of the Ley Concursal. Now all we ask to receive the same treatment of the other clubs that were forced to enter into administration."

A few days later the judge that was in charge of the case, Zulema Gento, announced that the company hired in order to administrate the club during this stage was  AD CRYEX S.L.P, with Francisco Prada and Julio Fernández Maestre as the two heads in command of the Bankruptcy Administration (BA). The first task was to elaborate a report in which the real debt of the club could be calculated.

The following weeks were tranquil and even reliving as judge Gento ordered to release the frozen money from the embargos, money around the €10.6 million, however it just unleashed a legal battle that lasted almost five months, with the banks and the Spanish Treasury presenting appeals trying to entrap the use of the resources.



Prada and Maestre, Depor’s administrators

On February the first confrontations between the administrators and Lendoiro showed up; Prada and Maestre presented their first report on the club’s debt and criticized the way the club had been led. In the previous shareholders meeting the club presented a debt of €93 million, but CRYEX reported that the debt was 63% higher.

The report criticized Lendoiro and asked to suspend him and his board of administrators from his functions, "In our view, the facts described demonstrate a blatant disregard for the rules, which means to lose our confidence in the managers we have referred [Lendoiro and his board of directors] so we estimate the modification of the status passing to a scheme with suspension of powers.” The report said.

A few days later the club responded presenting their own report arguing that the administrators weren’t resting the money of previous embargos and neither the interests that were part of a legal dispute between Deportivo and the AEAT. At the end of the month Zulema Gento left the job and judge Rafael García Pérez was named as her successor.

The petition to suspended Lendoiro and his board of directors was initially rejected, but there were other petitions and later he was partially suspended for the financial decisions at the club. In March the administrators presented their final report on the club’s debt and this time the amount was calculated in €156 million, once again they criticized the club’s officials for their “accounting tricks”.

Lendoiro defended himself saying that the embargos of the Treasury and the relegation to Segunda caused this chaos, “There was a rupture as, suddenly, Deportivo didn’t receive money from the Champions starting in 2006, and when the moment of the relegation arrived, then Depor lost financial power, and that was the only moment when we stopped paying to the Treasury, because there were no resources to do it. These are the causes why Deportivo is drowned.” He said during a press conference.



The hearing between the club and the creditors

On April 29 there was a hearing between the club and the creditors, once again there was a verbal fight between them and judge Rafael Garcia released his warning, “This court won’t be the one saving the club. If all the parties involved cannot negotiate then this is over. It’s very clear.”

In the next two months the attention was focused in the team and the battle to avoid relegation to Segunda. In the end Deportivo couldn’t avoid the demotion and the darker days in 2013 arrived. People in A Coruña feared that the relegation, and the consequent reduction in the incomes, could cause a new financial crisis.

The sense of sorrow was increased at the beginning of July as the administrators sent an e-mail to the club and creditors warning they were going to liquidate the club if they didn’t reach an agreement in the next fifteen days. Lendoiro tried to rest importance to the e-mail, “We received this communicate from the administrators. I won’t say what I think. Just that it is affecting the possible agreement with the creditors. But for me it isn’t an ultimatum. They should be the ones answering why they sent it. We just want to say to the fans that Deportivo won't disappear. I don’t know why the administrators sent this communicate. Perhaps they think it would be perfect to sort things before August.” He said during a press conference.

Later in the month Francisco Prada Gayoso admitted that the e-mail was just a way to push all the parties involved and that they didn’t intend in liquidating the club. He was hardly criticized by the media. As the end of July was approaching it exploded the conflict for the unpaid wages of the players.

The club owed €11 million to the players in terms of unpaid salaries. The problem was the way the judge and the administrators interpreted the debt, they understood that big part of this debt is subject to be forgiven, while the players, supported by the LFP, the Spanish Federation and the Players’ Association (AFE), didn’t agree and they requested to receive the full money or otherwise the club was going to suffer a new demotion, this since there’s an agreement forcing the clubs to pay their debt with the players before August 1st or in other case those clubs would suffer the relegation.

It was a trap. Deportivo had the money to pay this debt, but the bank accounts were frozen by the main creditors (the banks and the AEAT). Deadline day, July 31, arrived and it turned to be the darkest day of 2013 for Deportivo. Nervous wait, countless meetings, a strike by the players and, as the nigh approached, the chaos emerged as things weren’t sorted quickly.

The creditors pushed president Lendoiro to resign and sign a doubtful deal that was going to complicate the future of the club; the president refused to do it and described the situation as a “military coup”. Finally, with furious fans waiting outside, an agreement was reached and the players were partially paid with the promise that the rest of the money was going to be deposited in the coming months. Depor had saved its life at the last second.



Furious fans protesting on July 31

There were confrontations and a lot of criticism over the president, the creditors and the players, but after that endless night the situation was calmer, little by little the attention was focused in the team’s performance during the Segunda season. On October the administration process entered into the second phase as judge Garcia released the report on the debt, which final calculation was €160,079.603.25

At the same time the judge fixed January 10 as the day for the creditors meeting, reunion in which it will be decided how the club is going to pay the debt. It was considered as a defeat for Lendoiro as the debt was much higher of what he always said. In the following month the AEAT and the club itself presented their plans to pay the debt, which will be voted on the day of the meeting.

As the end of the year was approaching a new subject called the attention: the five-year period of the board of directors was ending on December 23. After 25 years in power the continuity of Lendoiro was questioned. For the first time in quarter of a century there was an opposition emerging, with four men presenting their candidacy.

Paco Zas was the first one that made a step forward, though he was the first one to abandon the race. German Conchado and López Cascallar also emerged, but it was Tino Fernández the one that made the bigger impact.  He’s the fourth biggest shareholder of the club and the president of a technology company in A Coruña.

After a dirty campaign with insults and confrontations, Lendoiro presented his candidacy to re-election in December, but just one week later he was stepping back after the brutal defeat in the shareholders meetings. The shareholders, led by Tino Fernandez, voted for the first time against the financial reports of Lendoiro’s board of directors.



Lendoiro announcing his departure

Overwhelmed by the defeat, Lendoiro announced on Christmas Eve that he was leaving, bur he left a message to the new blood: “You want the toy, well here you have it, enjoy of it, makes us enjoy and please be responsible.” The year ended with the news that Pablo González-Carreró is the new judge of Depor's case.

In this way, Deportivo reached the end of 2013, one of the more convulsive years in the history of the club, dragging fights, financial problems, but hopeful due to the performance of the team at Segunda and with the light of a new future represented in the new president that’s going to emerge on January 22, but also concern of what could happen on January 10 if an agreement with the Treasury isn’t reached before.

ARCHIVE NEWS DEC/13

ZAPPING

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