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Bolton should escape points deduction


Bolton Wanderers should escape a points deduction after Sports Shield, the company that owned 37.5 per cent of the club, entered voluntary liquidation.

The EFL have announced that they will 'review' the situation with an announcement expected in September. However, it would be a great shock if they took any action against Bolton.  If a club appoints receivers, a ten point deduction is automatic.  If the parent company (in this case not even a majority one) appoints receivers, it becomes a matter for discretion.

In February 2015 the company that owned Birmingham City, BIH, went into liquidation.   Under league rules that counted as an insolvency event.  However, the league agreed with the proposition that there was a better chance of funding a buyer if the penalty was waived.   The Blues are now owned by Trillion Trophy Asia.

Sports Shield was the company set up by Dean Holdsworth to take over Bolton in March 2016.  In order to fund his part of the takeover, Holdsworth took out a £5m loan with a finance company called BluMarble, secured against the club.   The interest was an eye watering 24 per cent.  

To make a comparison, I am involved in the peer-to-peer lending market and my current returns are about 4.5 per cent with one provider and 8.1 per cent gross with another (clearly the borrowers are paying somewhat more).  This is, of course, before tax at 40 per cent, although there is a provision for offsetting bad debts.

I am not implying any impropriety on the part of BluMarble.  The interest rate reflected the fact that this was a high risk loan, as proved to be the case.

Holdsworth's stake is now held by insolvency firm Quantuma whose task is to get Blumarble's money back by any means they can.   This does not mean sending in the baliffs.  This does mean that a 37.5 per cent stake in Bolton is for sale to the highest bidder which could help the club in the longer run.