Burnley hit with transfer embargo

Burnley FC owners ALK Capital LLC issue fresh response amid Companies House strike off notices​

Owners say 'no concerns' over Companies House issues
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Published February 2023.

ALK Capital, owners of Burnley Football Club, remain calm despite still facing a Companies House bid to shut down a UK entity they own as a company two months on from saying the issue would be 'resolved with immediacy'.

The American firm completed its takeover of Burnley in December 2020 via their business sports investment arm Velocity Sports Limited (VSL). Velocity Sports Partners Limited (VSPL), another UK entity owned by Burnley's owners, has also been served with a strike off notice which was issued on January 31.

ALK and VSPL have accounts nearly eight months overdue and the latter had a confirmation statement that should have been filed by November 9, according to Companies House. ALK Capital filed their confirmation statement on February 10 - three months late.

Two other business, who effectively own Burnley FC due to the structure of the club, - Kettering Capital Limited and Calder Vale Holdings Limited - were also issued with strike offs but those have now been discontinued after cause was shown why the companies should not be struck off. But both businesses have accounts more than three months overdue while Calder Vale Holdings' has an overdue confirmation statement that should have been filed by January 20.

Sources close to the Burnley ownership say the ALK Capital and VSPL businesses on Companies House are not part of the structure of Burnley FC, but were set up during the takeover in case they were needed, with American entities ALK Capital LLC and Velocity Sports Partners LLC the ultimate owners of the club.

The ownership of Burnley FC is complex. The club is owned by Burnley FC Holdings Limited. That in turn is 83.97 per cent owned by Calder Vale Holdings with the rest made up of individual shareholders. Calder Vale Holdings is owned by Velocity Sports Limited, a company incorporated in Jersey and so not under the Companies House umbrella, via wholly owned subsidiary Kettering Capital. Velocity Sports Limited is owned by US entities ALK Capital LLC and Velocity Sports Partners LLC.

A spokesman for ALK Capital LLC said of the strike of notices being resolved for Calder Vale Holdings and Kettering Capital: "There was an administrative error which has been resolved. We are continuing to work with Companies House to complete the required process. We have no concerns and this will be completed in due course."

A compulsory strike off means a company is removed from the Companies House Register and so, legally, no longer exists, essentially indicating ALK and Velocity Sports Partners will be wound up. It is often a result of the failure to file accounts on time. Resolving that within a specified time frame can result in the strike off action being discontinued. Other reasons for a compulsory strike off can be failing to conform to legal requirements, failure to submit an annual confirmation statement, the company ceasing trading or no directors being appointed.

Before striking a company off, two formal letters and a notice must be sent to the company's registered office to inquire whether it is still in operation. If no communication is forthcoming, then a strike off notice will be issued.

ALK Capital LLC said in December, when first contacted by Lancs Live over the ALK strike off issue, that it was an 'admin error' and made no mention of the corresponding Stateside firms.

The statement at the time said: “This is an administrative error that has come to our attention and is being addressed and resolved with immediacy."

ALK ALK Capital LLC is headed by Clarets chairman Alan Pace, who is listed alongside Stuart Hunt and Michael Smith as a company officer. All three are board members at Turf Moor.

www.lancs.live

Burnley owners ALK Capital LLC issue fresh response amid Companies House notices

Owners say 'no concerns' over Companies House issues
www.lancs.live www.lancs.live
 
BoroMart said:
I'm sure Derby used a similar 'late filing' excuse in the beginning. I seem to recall them claiming they changed their accounting period which had a knock on effect on creating a late filing. It of course all came out in teh wash later that they were actually well in the crap.
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The ace up Burnley's sleeve of course is that they will most likely escape any EFL sanctions courtesy of their certain promotion to the EPL.

And they won't be the first if they do.
 
its tough on the relegated clubs. its really hard to cut cloth accordingly once they lose the income. its not like they kept hold of all their players. they sold loads of the big earners and seemed to be doing the right thing. brining in younger cheaper players. not spunking cash on over valued players to buy their way back up.
 
The whole thing is a farce. I dont think theres any chance of a point deduction is there? But If I was in charge of burnley I would happily take one now unless it was an extremely large deduction. They could comfortably still take upto a 12 point deduction before it really threatened their auto promotion.
 
The fact both the top 2 in this league are under embargo is ridiculous.
Derby made similar excuses when theirs began, Burnley still spent very big in the summer, it won't hit them because they'll be a PL club long before any decision is made.

I've said it before and I'll say it again
Thank god we have Steve Gibson. We don't have to worry about this
 
no deductions, they made one mistake, so a one place penalty on the final league table seems like enough. ;);)

But seriously, sounds like admin issues rather than shenanigans based on the current information.
 
Anyone who has watched "The Men Who Sell Football" [Al Jazeera Investigates - March 2022] will understand how the trading and ownership of football clubs in the UK ,and world-wide, continues - using fake companies, registered companies in tax havens, multiple "businesses" owning different elements of companies and the complicity of foreign Government employees in allowing financially bankrupt gangsters ontaining false passports to pass the Premier and EFL "fitness test". Between the lines - Burnley may well be caught up in that - certainly with various "loans" and financial committments and obligations, whilst they were a Premier League club.

If you havent seen the documentary, its not only interesting, but alarming, how clubs are bought and sold with a telephone call and the right "facilitators". Clubs included in this film are in the Prem and in the Championship:

 
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This is nothing to do with Financial Fair Play or not paying debts. FFP is to do with making unacceptably high losses, and (partly because of player sales) Burnley have made profits over the past three years, not losses. And they have (somehow) managed to pay off a £60m loan during the past year as well. Burnley did spend big in summer, £20m or so, but they funded it by selling players for £70m so there is a big accounting profit.

The issue here is that Burnley FC did not submit audited accounts to the Football League by 1st March 2023. That's all.

When the audited accounts are submitted, they'll get a slapped wrist and told not to do it again. No points deduction is remotely plausible unless there are vast unidentified problems, which is highly unlikely.

Personally, I think the issue is that the directors fell out with the auditors. The directors say that the auditors were replaced in November and that's why the accounts are late, which in bare outline is probably ture, but it leaves unanswered the question of why change the auditor at such a silly time unless there are issues. And the iussue, IMO, is the owners' debt.

You might know that BFC was taken over on a leveraged buyout, with the new owners paying about £165m to the old owners but then borrowing £150m from the club to fund it. The club accounts for 2021 show net assets of £80m but including £100m debtor owed by the owner to the club - and a note saying they had borrowed another £40m since year end. (And they've borrowed more, since then.) My guess is that the previous auditors, knowing that the new owners don't have £150m and won't have unless they sell the club for that amount, wanted to reserve all or part of the debt, making a massive hole in the balance sheet. (Which, again, would not be a FFP issue.) Perhaps they thought a different auditor might have a different opinion.

But the last three paragraphs are just my guesswork. The first two paragraphs are known facts.
 
Dynamo Kev said:
its tough on the relegated clubs. its really hard to cut cloth accordingly once they lose the income. its not like they kept hold of all their players. they sold loads of the big earners and seemed to be doing the right thing. brining in younger cheaper players. not spunking cash on over valued players to buy their way back up.
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Hmm, they signed quite a few players, although several on loans but they’ll all have cost money. They should have sold big earners and used youth
 
dsr-burnley said:
This is nothing to do with Financial Fair Play or not paying debts. FFP is to do with making unacceptably high losses, and (partly because of player sales) Burnley have made profits over the past three years, not losses. And they have (somehow) managed to pay off a £60m loan during the past year as well. Burnley did spend big in summer, £20m or so, but they funded it by selling players for £70m so there is a big accounting profit.

The issue here is that Burnley FC did not submit audited accounts to the Football League by 1st March 2023. That's all.

When the audited accounts are submitted, they'll get a slapped wrist and told not to do it again. No points deduction is remotely plausible unless there are vast unidentified problems, which is highly unlikely.

Personally, I think the issue is that the directors fell out with the auditors. The directors say that the auditors were replaced in November and that's why the accounts are late, which in bare outline is probably ture, but it leaves unanswered the question of why change the auditor at such a silly time unless there are issues. And the iussue, IMO, is the owners' debt.

You might know that BFC was taken over on a leveraged buyout, with the new owners paying about £165m to the old owners but then borrowing £150m from the club to fund it. The club accounts for 2021 show net assets of £80m but including £100m debtor owed by the owner to the club - and a note saying they had borrowed another £40m since year end. (And they've borrowed more, since then.) My guess is that the previous auditors, knowing that the new owners don't have £150m and won't have unless they sell the club for that amount, wanted to reserve all or part of the debt, making a massive hole in the balance sheet. (Which, again, would not be a FFP issue.) Perhaps they thought a different auditor might have a different opinion.

But the last three paragraphs are just my guesswork. The first two paragraphs are known facts.
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If auditors are refusing to sign accounts off the club is in serious trouble. Not football wise but legally. But as long as you get past the 26 March with no punishment you are home and hosed. That's the gamble both Burnley and Sheff Utd seem to be taking.
 
edinboro said:
If auditors are refusing to sign accounts off the club is in serious trouble. Not football wise but legally. But as long as you get past the 26 March with no punishment you are home and hosed. That's the gamble both Burnley and Sheff Utd seem to be taking.
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For one, the current auditors aren't (apparently) refusing to sign off the accounts; for another, the club finances are robust enough that reducing the balance sheet even by the full £150m wouldn't mean the club was in serious trouble. (It wouldn't mean the club was in any more trouble or lack of trouble than it is now. The debt would still exist, its recoverability would not change, it's just a matter of how that numbber should be reported.)
 
dsr-burnley said:
For one, the current auditors aren't (apparently) refusing to sign off the accounts; for another, the club finances are robust enough that reducing the balance sheet even by the full £150m wouldn't mean the club was in serious trouble. (It wouldn't mean the club was in any more trouble or lack of trouble than it is now. The debt would still exist, its recoverability would not change, it's just a matter of how that numbber should be reported.)
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Thanks for your contribution. Interesting. I presume you are a Burnley fan (several of my family are). How do you feel about the owners and their conduct?
 
dsr-burnley said:
For one, the current auditors aren't (apparently) refusing to sign off the accounts; for another, the club finances are robust enough that reducing the balance sheet even by the full £150m wouldn't mean the club was in serious trouble. (It wouldn't mean the club was in any more trouble or lack of trouble than it is now. The debt would still exist, its recoverability would not change, it's just a matter of how that numbber should be reported.)
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But it sounds like the previous auditors wouldn't. So it's like asking for a retrial. It's a terrible look as all most clubs need is a statement from the owner saying they will cover losses. The fact that wasn't enough is quite telling. The ownership structure will probs be part of the issue due to lack of clarity. Happy to see how it pans out but I'm not sure 'nothing to see here', which is what Derby and others have tried in the past will wash for very long.
 
borolad259 said:
Thanks for your contribution. Interesting. I presume you are a Burnley fan (several of my family are). How do you feel about the owners and their conduct?
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On the football side, no problems at all. quite the reverse. This is the best season in my 40 or so years as a supporter.

On the management side, I'm dubious. They seem to have got rid of a lot of staff simply because they were appointed by the previous owners. They lost Category A academy status though that seems to be coming back after work done to recover it.

On the financial side, they're awful. They bought the club for £180m, provided £15m of their own funds, and took the rest out of the club. Though they do seem to have managed the almost-impossible feat of taking £150m out of a football club and leaving the club still viable, both financially and on the pitch. The club has no loans registered at Companies House, though how the last £30m was paid is anybody's guess. I have no idea what their future plans are - to take out £5m a year, to take out £25m, to sell the club, to sell it piecemeal to profit takers, to find a new "hobby" owner like Abramovitch or the Saudis? No-one knows.
 
dsr-burnley said:
For one, the current auditors aren't (apparently) refusing to sign off the accounts; for another, the club finances are robust enough that reducing the balance sheet even by the full £150m wouldn't mean the club was in serious trouble. (It wouldn't mean the club was in any more trouble or lack of trouble than it is now. The debt would still exist, its recoverability would not change, it's just a matter of how that numbber should be reported.)
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It would be good to have more info here.
A look on why accounts might not be filed gives the following.....
Company/Directors have financial difficulties
Delayed in the post or lost
Directors living or travelling over seas

In the normal commercial world Directors falling out with auditors is not a good look and I'm trying to work out why it's ok in the world of footy.
 
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