It’s worrying times for Championship side Wigan Athletic, even more so after learning the club could reportedly face a further points deduction.
Administrator Gerald Krasner has said the 2013 FA Cup winners have appealed against their 12-point deduction which would be applied this season if Wigan finish outside the bottom three in the Championship, or next season in League One should they go down.
“The only grounds we have is ‘force majeure’,” said Krasner. “This situation was totally unexpected, so we believe this case applies.”
Christ. Has someone dug him up? https://t.co/rWTLpccu0i
— Michael Normanton (@Michael_TSB) July 2, 2020
Force majeure events are certain acts, events or circumstances beyond the control of the involved parties, such as natural disasters, war or a pandemic.
Wigan could face a further points deduction increased up to 15 points should any new owner fail to pay 25% of the money owed to non-football creditors.
Wigan supporters have urged the EFL to suspend the points deduction until a further investigation looks into the events leading up to the club entering administration.
Wigan Athletic Supporters Club lit up the DW Stadium on Monday night in a show of support over the stricken club’s precarious financial situation and as part of the #LetsHangOn appeal.
— Sky Sports (@SkySports) July 7, 2020
Krasner added: “I can tell you all that the initial appeal has already been made by our solicitors and we have until Friday this week to put in a substantive defence as to why the 12 points should not be deducted.
“That will be done on time. It will cost the club/the administrators costs they have to be incurred.
“I’m not giving any guarantees that the penalty won’t be imposed by the Football League in accordance with their regulations.
“But we are taking all steps possible to either avoid it or at least minimise it.
“You should also be aware that there is a second potential points deduction if creditors are not paid 25p in the pound under what’s known as a CVA, which is a Company Voluntary Arrangement, or informally it can be done by the administrators.
“That is going to cost quite a bit of money and the penalty can be 15 points next season.
“Leeds had that penalty imposed a number of years ago when they were in administration. Once again, I am giving no guarantees but we are working on a strategy how to deal with this problem if we have a successful sale.
“I want to see the club going forward without any points deduction next season if at all possible.”
A statement from Wigan owner Au Yeung’s UK lawyers said the Next Leader Fund had bought the club last month with “the best intentions” but has instead blamed the coronavirus pandemic to have “fundamentally undermined” its ability to fund it.
A Twitter thread went viral this week, stating how Wigan have been a victim to one of the greatest sporting scandals of all time. It’s certainly worth a read.
The Latic’s new EFL approved owner had previously been declared bankrupt back in 2004, as can be seen in documents below.
“Wigan Athletic is a wonderful football club with rich history and a passionate fan base,” the owner’s statement read.
“We bought Wigan Athletic with the best intentions: to create a team that would get the club back into the Premier League, and I have invested more than £40m.
“Unfortunately, the Covid-19 crisis has severely impacted people and businesses around the world – and Championship football clubs, which rely on fans coming through the turnstiles, are no exception.
“This has fundamentally undermined our ability to fund Wigan Athletic and, after struggling to find a solution, in the end took the difficult decision to put the club into administration to ensure its survival.
“The administrators are now doing everything they can to find a new owner who will secure the future of Wigan Athletic for the sake of the many thousands of devoted Latics fans, and the local community.”
In a statement published on Tuesday, the league organisation said: “The EFL continues to note the many comments and concerns in respect of the recent developments at Wigan Athletic Football Club from supporters, media and public figures.
“Given the Club’s standing within the EFL and their local community there is, quite rightly, a significant strength of feeling of anger and frustration amongst all those connected to the Club.
“The EFL has engaged with the Administrators and their advisors and is continuing to provide its full support in all ongoing matters, particularly how it can work through the requirements of the insolvency policy and assist the Club in exiting Administration at the earliest opportunity. In the short-term, those discussions will continue with the sale of the Club, player transfers and funding required in order to complete the 2019/20 season the immediate priorities.
“In addition, we will also engage with the appropriate supporter groups, local politicians and other key stakeholders as appropriate to assist in helping achieve a long-term stable future for the Club and its local community.
“The League fundamentally disagrees with the comments attributed earlier today to Mr Au Yeung Wai Kay where he stated that ‘the Covid-19 pandemic has undermined the ability to fund the Club’. Whilst it is clear that Covid-19 has undoubtedly presented significant financial challenges to the professional game, evidence of the required source and sufficiency of funding to be invested in or otherwise made available to the Club, was provided as part of the recent change of control process.
“This set of circumstances is more illustrative of the wider financial challenges facing EFL Clubs, who, without a full and comprehensive reset of football’s finances, including how monies are distributed throughout the game, will continue to struggle to meet the demands of an outdated and unsustainable model.
“In respect of the challenges at Wigan Athletic, there is clearly a number of important unanswered questions that require urgent attention and the EFL welcomes the move made by the Administrators to launch an investigation as to what has led to the Club being placed into Administration just a matter of weeks after the Next Leader Fund (NLF) took ownership of the Club. The EFL will undertake a similar exercise and, should any breaches of football regulations or company law be discovered, action will be taken either by the League or the body with the relevant jurisdiction to do so.
“The EFL understands this situation once again leads to questions being asked about EFL regulations in regard to changes of control, alongside the actions taken when an insolvency event occurs, and as a result has opted to clarify each matter below:
“EFL Insolvency Policy,
“In all circumstances a sporting sanction applies in respect of an insolvency event (default 12-point penalty). The Regulation seeks to ensure that a Club cannot gain any advantage over other Clubs in the competition by not paying its creditors in full and on time, while also ensuring there is a deterrent in place for Clubs and their owners, from operating in a manner so as to cause insolvency. The EFL acknowledges it is a difficult time for any Club placed into Administration, particularly in the midst of COVID-19, but is mindful that its regulations are to be applied consistently and equally to all member Clubs irrespective of the circumstances.
“In the current case of Wigan Athletic, and, in accordance with EFL regulations, due to the Club being placed into administration after the fourth Thursday in March, the sporting sanction will take affect once the final League positions are known. If in the event the Club is relegated by virtue of their final position following the conclusion of the Championship season, then the deduction will apply in League One in 2020/21. However, if the Club is not in the relegation places following the final game of season, the sanction will be then be applied to their season 2019/20 total and final league standings amended as appropriate.
“A Club can appeal against a decision of the Board to impose a 12-point deduction under the EFL Regulation 12.3.10, and the appeal will be heard by an independent panel appointed by Sports Resolutions. That independent panel will determine whether the relevant Insolvency Event(s) arose solely as a result of a Force Majeure event, caused by and resulted directly from circumstances, other than normal business risks, over which the Club could not reasonably be expected to have controlled.
“Owners’ and Directors’ Test,
“Under EFL Regulations, it is a requirement that the self-certification Owners’ and Directors’ Test is completed by every prospective new owner and relevant person seeking to gain control of a Club. The test sets out an objective set of Disqualifying Conditions. This process was completed during the recent change of control at Wigan Athletic, and Mr Au Yeung Wai Kay was not subject to any disqualifying conditions.
“As previously stated, the EFL is aware of the public frustrations felt in respect to the current Owners’ and Directors’ Test and acknowledges that there is a requirement for ongoing adaptation and improvement but, from a legal perspective, it can only operate within existing parameters.
“In 2018 the EFL conducted an Owners’ Conduct Review, which in part looked at making a number of fundamental changes to the criteria and whilst some amendments were made at the time, it is clear that the appetite has been strengthened by the circumstances that led to the withdrawal of Bury FC from the League, and the lessons learned from the subsequent review into the conditions that led the Club to that position. The EFL has been engaged and remains in ongoing consultation with both the Premier League and The FA to achieve the appropriate improvements to the Owners’ and Directors’ Test for the future.”
It was also revealed this week that Super League club Wigan Warriors, who share the DW Stadium with the EFL side, have announced their intention to bid for the football club and have got the backing for their plans from the leader of Wigan council.
Wigan Warriors chairman Ian Lenagan previously held the same role at League One play-off finalists Oxford and recently spent a term as EFL chairman, having replaced Greg Clarke in the role in 2016.
Fans reacted on Twitter following the EFL’s statement and after a story emerged that Wigan could face a further points deduction…
THE EFL ARE NOT FIT FOR PURPOSE AND ARE TO BLAME FOR ALL OF THE JOB LOSSES. BLOOD IS ON YOUR HANDS
— Luke… (@luke_bwfc) July 7, 2020