Club news

THE CREDITORS MEETING

11 Jan 2014
As it was expected the proposal from the club was the one selected by the creditors. The Spanish treasury isn’t happy and tried to cancel the meeting, in the end they can appeal. The judge must approve or reject the deal in the next two weeks.

The creditors’ meeting at Deportivo was lived without incidents. It started with a delay of thirty minutes and the only problem is that one of the club’s clients, Mediapro, wasn’t allowed to attend to the meeting as judge Roberto Niño Estebánez, didn’t’ think it was proper.

In a matter of minutes the first plan that was voted, the one of the club, turned to be the winner. There was a quorum of 81.88% among the creditors owing the not privileged debt of the club and the 59.44% voted in favour of the club’s plan. In the end only the  Spanish Treasury and Uruguayan club Nacional de Montevideo were the only ones that voted against the club’s plan. So, in just 33 minutes it was over.

Still, the Spanish Treasury tried to block the meeting arguing that the Spanish Players’ Association (AFE), plus the LFP hadn’t answered a previous petition requiring to explain their role in the whole negotiation  to vote in favour of the club’s plan, this since it has been rumoured that the club offered the players to collect the 100% of their past wages (subject to the percentage of the forgiven debt) if they voted in favour of Depor’s plan.

Judge Estebánez rejected the petition, but also said that the Treasury is free to refuse the agreement. The creditors and the administrators have ten days (two weeks) to refuse the agreement, if not the judge will accept it and the administration case of Deportivo will be closed. In case of any appeal the judge will analyze the case and it will take more time to close it. It’s almost certain that the Spanish Treasury is going to present appeals.

If the judge accepts the appeals then he will request a new creditors’ meeting and the process continues until finding a solution or liquidating the entity. So, for the moment the club remains in administration.



Lendoiro arriving to the meeting



Depor’s board of directors before the meeting



Judge Roberto Niño Estebánez



The lawyers of the tax Agency



Francisco Prada & Julio Fernández Maestre, the administrators of Deportivo


The plan of Deportivo contemplates to pay the privileged debt in 17 years, with a shortage of two years. This means that the club will only face the payment of the administration’s cost in the first two years. Then, starting on the season 2016/17, Deportivo will start to pay the privileged debt.

The debt of the club is around the €160 million, of this amount is necessary to rest €21 million that are currently frozen in the bank accounts, which reduces the final amount to €139 million. Then the club proposed to forgive the 33% of the not privileged debt, which means to reduce the final debt in €20 million. In this way the debt that Deportivo will begin to pay in 2 years is reduced to €119 million.

Extending the explanation, the €21 million that are currently frozen in the bank accounts will be applied to the privileged debt of the club. This type of debt currently represents €100 million, but with the payment it will be reduced to €79 million. This is the crucial piece in the puzzle. The major part of this money is owed to the Tax Agency and banks NovaGalicia Banco & Banco Gallego and the deadline to pay this debt is negotiated apart from the signed deal.

It is commented that Lendoiro already has a verbal agreement with the banks regarding to their privileged debt (€38 million). According to newspaper La Opinión A Coruña, the club has a verbal agreement with both banks in order to pay their privileged debt, which would include a reduction of €13 million, this reduction will be part of a purchase of publicity.

So, all the tension is focused with the Tax Agency, because the Treasury wants to collect its privileged debt (€62 million) in eight years, while Depor want a longer deadline.  This is the key piece to complete the process: the negotiating with the Tax Agency.

The Tax Agency and the club have failed to reach an agreement on this regard, and it will be difficult that they will do it in the coming two weeks, so it’s highly probable that the case will continue through the appeals presented to the judge.

During Friday’s afternoon Lendoiro addressed the media and defended his plan, “This agreement is more favourable to Deportivo and for its creditors of what was originally thought. I believe this could be the best agreement in Spanish football. We remain open to negotiate with the Treasury always defending the interest of Deportivo, not the interest of Lendoiro. We already had many meetings with the Treasury and are pending to have a new reunion. The true is that I’m absolutely calm regarding the fact that the Treasury can appeal against our agreement.”

In the meantime Tino Fernandez, the main candidate to be the next president, released a press statement and, without valorizing the agreement, said that his main goal right now is to negotiate with the Treasury and avoid future embargos. He emphasized that the signed deal doesn’t include the €100 million of the privileged debt., while promised to the fans to continue fighting for the club.

ARCHIVE NEWS JAN/14

ZAPPING


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