Johnson windfall to benefit Pompey creditors

Glen Johnson in action for Liverpool last season
Glen Johnson in action for Liverpool last season
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Liverpool have handed over a windfall worth around £500,000.

However, Pompey have been told they will not receive a penny of it.

Instead, proceeds from the 2009 Glen Johnson sale clause have gone to former administrators BDO, following an arbitrary ruling last week.

The cash is then to be distributed as additional funds to those included in the Company Voluntary Arrangements (CVA).

It represents a surprise dividend to creditors, which include a large number of local businesses.

Football creditors such as the Professional Footballers’ Association, who act for ex-Pompey players, are not eligible, though.

The developments have come following Liverpool’s second-place finish in the Premier League last season.

As revealed by The News on April 1, the Reds were required to pay £1m should they win the title under the deal which took Johnson to Anfield.

It is now understood there was also a stipulation Pompey would receive a sum should Liverpool finish second.

However, there has been an on-going query over the precise beneficiary of a figure, believed to be in the region of £500,000.

Pompey have effectively reformed during two periods in administration since the Johnson deal was brokered with Portsmouth City Football Club.

It has since switched to Portsmouth Football Club (2010), Portsmouth Football Club (2012) and is currently Portsmouth Community Football Club.

That prompted BDO – formerly PKF – to lay claim to the total as the most recent administrator.

In turn, the club launched a technical argument in a bid to obtain a share.

That issue was settled last week when an arbitrator ruled in favour of BDO.

While awaiting an outcome, the Football League have held the monies – now BDO will distribute it.

However, as Pompey bear the sole responsibility to pay football creditors, no former players still owed money will receive a cut.

According to the July 2014 BDO progress report lodged with Companies House, the administrators are also awaiting the outcome of the sale of land in Bedhampton.

This is believed to be a club-owned strip between two farms.

Once that sale has been completed, it is estimated an extra 0.5p in the pound would be handed to CVA members in the future, bringing total distributions to 4.35p in the pound.

That is a significant rise on the 2p in the pound anticipated in original CVA proposals.

The report also details how CVA creditors received a first dividend of 2.34p in the pound on August 13, 2013. A second dividend of 1.51p in the pound was paid on March 3, 2014.

To date, the aggregate dividend is 3.85p in the pound – equating to a total pay out of £1,274,256.29.

BDO did not respond to requests for a comment.