Be Careful What You Wish For (46 page)

January 2010 was a blur of legal toing and froing, a minefield of threats and legal obligations. The bank insisted I went to court to get something called a validation order to ensure any payments I made were sanctioned legally, given HMRC’s wind-up order. Without this they would freeze the club account even though they had the security of my cash. Agilo also demanded this, so with Rachel Anthony and Lee Manning at the helm with me we went to court and got the order, which involved high-level legal representation and costs.

Neil Warnock was aware of the predicament I was in and was very supportive. I even got a high-spirited message from him and his assistant Mick Jones on my voicemail over Christmas telling me how much they loved being at Palace. Neil had also identified players he felt we could sell and command good fees for and not necessarily halt our progress on the field, which despite all the problems was pretty good.

Agilo eventually agreed to drop the make-whole monies but I had to get HMRC to withdraw their petition, which was easier said than done. But I convinced them during a conference call that in effect they were not dealing with me but a very dangerous and serious secured creditor who was threatening to put the club into administration. If this happened, the Revenue would get little if any of their money. We made them see sense, but not without some concessions.

Because of the precarious legal position, certain parts of any monies received from such things as transfer receipts had to be put
to
one side, meaning not every penny we got in could go to Agilo. We had to put a percentage into the working cash flow of the business and an 80/20 split was agreed in favour of Agilo, with the funds being held in escrow with Rachel Anthony at DWS. We still hadn’t signed an agreement on the shareholder/standstill agreement but commercial activities came into play. We believed we were just about to receive a £5 million-plus offer from Manchester City for young Victor Moses, even more so after they came and watched us play Plymouth away and Victor scored a wonder goal which we thought had clinched the deal, but an offer never came. We sold a player for a million to Southampton. Not all of it was paid in one tranche. As is often the way in transfer deals payments were spread out over a period of time, so to get the balance paid immediately I had to do a discounting deal with a funder, who would advance the rest for a fee.

The trade-off with HMRC was to ensure the payee position got no worse and also to make a payment towards some of the arrears. Our cash flow provided for the monthly payee payment but they wanted an additional £200,000. So I used the VAT on the player transfer that was due to be paid over to HMRC in three months to pay that amount. In other words, I used the Revenue’s own money to pay them. This decision prejudiced no one, came from no cash-flow loss but was to be the precursor to the final explosion.

Brajovic suggested to me he had someone who might be prepared to buy out their loan, but it needed my consent as the loan could only be sold to an FSA-registered organisation, unless I agreed. The person he wanted me to talk to was someone Phil Alexander had spoken to who had apparently shown no interest in talking to me about the financial position at Palace but was now interested in buying the Agilo loan. It was Steve Parish, the chief executive of a firm called Tag, who had a smallish shirt sponsorship deal with Palace.

I had never met or spoken to Parish before but that was all to change. In the interests of keeping Brajovic appeased I spoke to Parish, who confirmed he was interested in buying this loan. What he suggested was he would pay Agilo the £4.3 million outstanding, take over the loan and I would pay them £6.3 million by 26 June. In other words, if I failed to make the repayment in five months Parish, who intimated there were other parties involved in buying out Agilo’s loan, would take the club.

Effectively Parish and his backers wanted circa 120 per cent interest secured against the £35 million I had in Palace. Despite the appeal of being able to rid myself of this man Brajovic I can’t say I jumped at this deal. In speaking to Parish, it was clear to me he knew a lot more about the exact financial position at Palace than he had any right to. I wonder – who could have told him that from my board of directors? My brother Dominic? The fiercely loyal Kevin Watts? Or my chief executive Phil Alexander, he of the ‘the king is dead’ mentality? I suspected Parish and the others he alluded to were involved had been speaking to Agilo for some time!

On Friday 22 January a highly irritated Brajovic phoned me late in the evening and asked me to assure him I hadn’t paid any money to the Inland Revenue. ‘Of course I have, Milos. It is in the court-approved validation order, and I had to pay them money to get them to delay their petition hearing until February, and the extra bit I paid was their own money, the VAT on a transfer fee that they would be getting in three months’ time. What’s the problem with that?’

Brajovic exploded and told me that was it. He wouldn’t listen to reason, and stated I had no business paying HMRC. Of course, I didn’t want to pay the Revenue at this time but I had to, but he was not interested. He was in a demented rage, finishing his rant with, ‘You just fucked yourself. You have until Monday to pay down this loan or your club will go into administration.’

I took this phone call seriously but once again it was considered by Rachel Anthony and Lee Manning to be another example of irrational behaviour and likely to be more bluster.

The next day I travelled with friends to watch the team play Premier League Wolves in the third round of the FA Cup on a cold blustery day in the Midlands. I sat and watched a goalless first half and as it came to an end my mobile phone rang. It was Milos Brajovic again. I took the call and spent the entire half-time break in the foyer at Molineux having what can only be described as a very heated conversation. I tried to talk sense into this man but he was raging about this payment to the Revenue.

The temperature of the call rose and rose as he became more and more aggressive. He threatened to ruin my club, ruin me personally, take my possessions and put my family on the street. Once it reached that point, I had had enough, and I exploded. I told him that if he ever wanted to speak to me like that again, to make sure he had the courage of his convictions and do it when he was standing in front of me.

After the call concluded I went out to watch the remainder of the game. We were now winning 2–1 and I had missed all the goals. I sat down for the final twenty minutes or so and the last goal I got to watch as the owner of Crystal Palace was the Wolves’ equaliser!

The next day was my daughter Cameron’s second birthday party, which I never got to enjoy, as outside the house were paparazzi. One of Suzanne’s guests was Vanessa Perroncel, who the newspapers alleged had an affair with the England captain John Terry. I spent the majority of the afternoon on the telephone to Rachel Anthony at DWS trying to prepare ourselves for the inevitable onslaught that Agilo would throw at us on Monday.

First thing Monday morning it came. Do a deal with Parish in
twenty
-four hours or the club goes into administration. The deal Parish was offering was even worse than Agilo’s but I now had to explore it. Frankly, to this day I do not believe that Parish had the money himself, or money in place elsewhere to do the deal he was proposing, or any deal full stop. I think he was just stirring the pot and seeing what came out of it and how best he could position himself, but what- ever he did was very unlikely to be of any benefit to me. We tried to liaise with Agilo and their lawyers to introduce the potential of Lloyds stepping in with funding, but we were getting nowhere.

The number of emails flying back and forward on Monday, starting at 7 a.m., between me, Parish, Agilo, Lee Manning and Rachel Anthony, was vast. But still the opinion being put forward by my advisers was that Brajovic wouldn’t do it. It made no sense to put the club into administration; he wouldn’t get his money; he is just raging because he wants to push you around!

DLA, Agilo’s lawyers, were not responding to phone calls to confirm whether they had been instructed to file for administration, which led Rachel Anthony to believe they would not. She also suggested that Lloyds Bank, who didn’t want CPFC to go into administration, should phone DLA as well as some of the big insolvency firms to state that they would take a very dim view of any such action.

At 11 p.m. Brajovic told me he was close to doing a deal with Parish and was selling him the debt for a 10 per cent discount and expected me to sign a deal to pay Agilo the £400,000 balance. My advisers were outraged at this and suggested we left it till the morning, so at half an hour before midnight we all stood down.

The next day Lloyds phoned around as, despite their disbelief, the feeling began to permeate that this threat might now be carried out. They reached Grant Thornton, an insolvency firm, who advised
Lloyds
they were offered the administration two weeks earlier and turned it down as they ‘did not want to be a patsy for Agilo’, meaning they knew this was a bad administration for them to take: there was no money being offered to fund the club through administration, however long that might take, and they knew I was the biggest creditor.

My advisers and I scrambled to see if we could do a deal with Parish, who by now was very much in bed with Agilo, and as the morning wore on a deadline was set for 2.30 p.m. to either conclude a deal with Parish or get Lloyds to agree to pay Agilo. Agilo said they had the papers drawn up for the court order and would file by 4 p.m., when the courts closed

Still Rachel Anthony suggested this was utter nonsense, stating that if the papers were drawn up it would take five minutes for them to file and they wouldn’t need to wait another one and a half hours until four – and in any case the courts closed at 4.30 p.m. In her email to me at 13.18 she said it was ‘bullshit’. The problem was, she was wrong!

Lloyds got through to DLA, who refused to confirm or deny that they were going to file, and refused to advise which firm was going to be appointed as administrators if they were. Once again this suggested to my advisers that the threat of administration was a ruse. Time ticked by. At 14.30 I was on a conference call with all my advisers and still sending emails to Brajovic at 14.56.

At 15.02 on 26 January 2010 the football club I had owned for ten years, the battle I had fought for eight months, was lost, but as yet I didn’t know this and neither did my advisers. Even at this stage we were still trying to get Agilo to engage with us and work out a deal, before anyone else knew, but somehow Steve Parish did. He phoned and told me that Agilo had filed.
With
dread I phoned Rachel Anthony, who checked her in-box. I could hear the disbelief in her voice as she confirmed she had the court order and that indeed the club was in administration. Time exploded and space contracted. I was choked. I had to conclude the call as my emotions got the better of me.

I had lost.

17

THE AFTERMATH

MY FIRST REACTION
upon hearing the news I never wanted to receive – the news that Palace was in administration – was one of complete and utter desolation. It felt like someone had ripped my guts out. For a moment I was inconsolable. When I received the news, I was alone and so no one got to see me that way. I wouldn’t wish that feeling on my worst enemy, and at the time I felt there were a fair few candidates to fill that spot. It was the single worst moment in my entire life.

My phone went into meltdown. One call I did answer was from my mother, but I was very distressed and didn’t want to talk. Yet in the twenty-five minutes it took her to drive to my office in Park Lane, I had recovered my equilibrium and was now speaking to my advisers about finding a way to get the order set aside or even getting the bank to back me to buy the club back. This is just how I am. Adjust to something and then move forward. In this instance it was a coping mechanism, nothing more.

I phoned my brother Dominic to break the news to him but I was too late: he already knew as the administrator had wasted no time assuming immediate and complete control of Palace. I phoned
Neil
, who was just getting off a plane with the team as we were playing Newcastle United away. He was emotional and deeply upset and wanted to resign there and then, which was testament to our strong bond. But I made him promise to stay as Palace would need his help.

I then phoned the appointed administrator Brendan Guilfoyle and advised him that I was available if he needed me and that I would do as much as I could to help him do his job, which was to get the club out of administration.

Palace was in administration for just five months and during that time those agendas that I had become aware of in the months leading up to the loss of my club became all too clear to me. Initially I was considered the largest obstacle as I was the biggest creditor and could vote down the CVA and subsequently block any sale. I met Guilfoyle days later and he asked if I was recording the conversation, which struck me as odd, but what he said next clarified the reason why he had asked. Firstly, he asked me if I was prepared to fund the administration! And then, jaw-droppingly, stated that he should never have taken it on. It broke his personal rules of administration, taking into account who was going to fund it and what the exit strategy was. He went on to add that Palace should never have gone into administration. In my opinion this made him little better than an ambulance-chaser. It was scant consolation to learn from Guilfoyle that he had taken the job on the fly because not one of the major firms wanted to touch it.

When Palace went into administration we were in eighth place in the League and a few points off the play-off spots. The club was said to be £30 million in debt, but as I have said £23 million of that was to me and I wasn’t calling it in. And also it had a playing squad independently valued at £27 million. So, as Guilfoyle
himself
stated to me, the business should not be in administration. All I had done in the last eight months was pour millions of pounds into reducing debts. I had kept the playing squad and also inadvertently got the stadium priced in the best way it would ever be – and all for the benefit of others.