Dundee FC have begun the process of entering administration for the second time in seven years after directors concluded it is the “only option” available to the crisis-hit club.
Board members met administrator Bryan Jackson at a secret location on Friday and, should he decide to take the job on, the next step is for legal papers to be lodged with the Court of Session in Edinburgh.
In a statement that night, Jackson’s accountancy company PKF confirmed a formal approach had been made.
“The directors of Dundee FC have today decided that their only option is to place the club into administration,” it read.
“The administration appointment is expected to take effect from the middle of next week and the directors have approached Bryan Jackson, of accountants PKF, to consider being appointed administrator.
“The directors have taken this decision with considerable regret but believe that they have no other choice in the current circumstances. Until the administration is effective all staff will remain in post and the club will continue to operate normally.”
If or when Jackson assumes control of the Dark Blues, he will assess the viability of the club as a going concern.Job losses inevitableShould he see a way forward, he will then begin the process of cutting costs, with job losses inevitable.
The Scottish Football League will, independently, decide what punishment the club will receive for their financial mismanagement.
Unlike the SPL, the SFL do not have set criteria for dealing with teams that fall into administration.
If a comparison is to be drawn with Livingston, the most recent case in Scotland, then it must be remembered that it was the close season when Livi were demoted to the third division last year.
To do the same to Dundee two months into the season would wreck the SFL’s fixture schedule.
A likelier sanction for the Dens men is a massive points deduction to make relegation to division two inescapable.
While administration in 2003 came abruptly and with the shock of £23 million in debts, the 2010 version has been “slow torture,” to use the words of Stuart Murphy, the supporters’ representative on the board.
The first indication that all was not as it should be came in May 2009 when The Courier revealed that soon-to-be Dundee United associate director John Bennett owned Dens Park.
Dundee benefactor Calum Melville subsequently stated that he would be buying the ground back from Bennett, but that pledge was not followed through.
Despite claims that the club were “debt-free” that should have been bank debt-free they had relinquished ownership of their prize asset.
The Aberdeen business man, who had stated that “second is nowhere,” then joined the rest of the board in sacking manager Jocky Scott when three points clear at the top of the table.
That move backfired badly as the players, under new boss Gordon Chisholm, were beaten to the title by Inverness Caley Thistle.
Chairman Bob Brannan said he would be stepping down from that role, while financial director Ian Bodie retired from the board.Behind the scenesThe summer saw the budget reduced but players were still recruited and contracts drawn up, while all the time an unpaid tax bill for £365,000 sat hidden away behind the scenes.
A disappointing start to the new campaign did nothing to allay fans’ fears, while outside the football arena Melville was first suspended then resigned from marine safety equipment company Cosalt pending an investigation.
But it was Monday, September 20, at an employment tribunal where the club was defending a case brought by ex-manager Scott, that things really began to unravel.
It was there that it was announced that Melville could not be present and that he had offered his resignation as a Dens director.
An emergency board meeting at a city solicitors’ office followed that evening and it later emerged that the other directors were not accepting his resignation.
A cloak of silence covered the club until Melville, through his PR company, gave an interview to a Sunday newspaper in which he revealed that Dundee owed £365,000 to Her Majesty’s Revenue and Customs and raised the spectre of a second administration.
Efforts were made to raise cash from supporters, sponsors and the local business community, many of whom had dug deep in the aftermath of 2003, but all eyes remained on Melville to see what his next move would be.
However, even when he claimed to have lodged £200,000 in a bank account to allow the club to open negotiations with HMRC, the feeling remained that administration was the likely outcome for the Dark Blues.
It was felt that the club was just not viable in its present form without Melville’s cash input.Five-figure lossThe other board members suspected that the tax bill pledge would be his final financial contribution, and that even if they managed to get together the remainder of the money to pay HMRC their troubles would persist, running as they do at a five-figure loss every month.
Without Melville’s continued assistance, the Dark Blues would quickly experience more problems, especially as they are allowed no facility from their bank following their first period of administration.
With this in mind, a group of directors minus Melville, who is supposed to be running the Chicago Marathon this Sunday met Jackson to begin the process of going into administration.
Indications from the Dens boardroom are they believe the club does have a future but it is likely to be operating at a much-reduced level than before.
That, unfortunately for the long-suffering fans, is the best-case scenario.
Meanwhile, ex-captain, and Dundee’s player of last year Jim Lauchlan has spoken of the sympathy he feels for former team-mates and staff members fearing the axe.
“I am absolutely devastated and struggling to get my head round this news,” said Lauchlan, who now plays for Sligo Rovers in the Republic of Ireland.
“My heart goes out to all my friends at Dens Park. To think that some people could be looking at the prospect of losing their livelihood doesn’t bear thinking about.
“My thoughts are with Dundee FC and those people who are going to be hit hardest.
“They are a great club with so much history and a terrific fan base, so to put them through this again is unthinkable. They just don’t deserve it.
“I got on well with Calum Melville and (former chairman) Bob Brannan when I was there but the question remains the same.
“Why wasn’t the tax paid?