THE rebuilding of Hearts will pick up speed in the coming days after the Tynecastle club finally exited administration yesterday – exactly 51 weeks after the collapse of the Vladimir Romanov regime.
Talks with at least two players are at an advanced stage, and an announcement of the first signing by head coach Robbie Neilson could be made as early as tomorrow.
The period of nearly a year in which the club’s very existence had been under threat at last came to an end yesterday afternoon, when Bryan Jackson of administrators BDO lodged the final papers with the Court of Session in Edinburgh. That last step had been a mere formality for several weeks, but there had been months in which Hearts’ future hung in the balance.
The Foundation of Hearts, the supporters’ umbrella body that was named preferred bidder last August, had to hold its nerve in the face of repeated suggestions from the club’s Lithuanian shareholders that it should put more money into its Company Voluntary Arrangement (CVA). Foundation chairman Ian Murray insisted that putting any more cash into the CVA would compromise the future financial stability of the club, and he was vindicated as both Ubig and Ukio eventually agreed to the deal.
Executive chairwoman Ann Budge, whose company Bidco has taken over Hearts on behalf of the Foundation, said last night that everyone at the club was “ecstatic”. In addition to promising the imminent arrival of new players, she said that news about season tickets for the club’s forthcoming campaign in the Championship would be announced today.
“By now, you will all have heard and, yes, it’s true, we have formally exited administration!,” Budge said in a statement on the Hearts website. “Everyone associated with the club is ecstatic and now we can really begin to move ahead in implementing our plans for the future.
“With the greatest respect to BDO, we are all delighted to see them go! On a serious note, however, we owe them a huge thank you for putting in the hours to get us out of administration this week, as promised.
“So what now? Well, the first thing is to get season tickets on sale as quickly as possible and the club will be issuing information regarding this tomorrow. Following this, we will shortly by issuing information on new signings and more pre-season friendlies which, I know, is what all the fans are desperate to hear.
“However, for today, let’s just celebrate the news!”
Celebration was also the order of the day on the Foundation’s Twitter feed. “The club is officially out of administration,” it posted. “We said in March to put the champagne in the fridge. Today you have permission to pop the cork.
“This has only been possible because of you, the supporters of this great and proud club. Well done and thank you.”
As both Budge and Murray have warned in recent weeks, however, the period of celebration will be a short one. The Foundation, funded by the monthly direct debits of more than 8,000 members, will have to keep repaying Budge for several years after she put up the money needed to fund the CVA.
But that repayment is part of a carefully-constructed plan which is so far working well. Contrary to some pessimistic predictions, there has been no dropping-off in Foundation membership, and the level of season-ticket sales is also expected to hold up well following the promising end to the last campaign.
A section of the Hearts support showed some disquiet when Budge took over the day-to-day running at Tynecastle and immediately decided not to offer manager Gary Locke a new contract, opting instead to appoint Craig Levein as director of football and promote Neilson to head coach.
But the bloodletting, which saw several players depart in addition to Locke and his assistant Billy Brown, was carried out swiftly, on day one.
In the coming weeks, it is far more likely that good news will be coming out of the club as Neilson carries on with his recruitment for next season. Midfielder Morgaro Gomis and striker James Keatings are closest to signing, while goalkeeper Neil Alexander has also been in talks.
Rudi Skacel, who won the Scottish Cup on each of his two previous spells as a Hearts player, has been offered a job on the coaching staff – but with no playing role. The veteran Czech has been working with football schools for children and has been asked if he wants a full-time role with one of the age-group teams at Tynecastle. His desire to keep on playing, however, could dissuade him from accepting.
Whoever is recruited between now and the start of next season, one thing is certain. They will be offered modest terms in accordance with the Foundation’s tight budget. While Hearts hope and plan to make an immediate return to the Premiership, they have budgeted to spend two seasons in the second flight, and have neither the desire nor the ability to spend heavily in search of more rapid success.
As the club’s support celebrated last night along with Budge and Murray, Jackson and his colleagues at BDO could also congratulate themselves on a job well done. “This has been a challenging and complex process which has, fortunately, had a successful conclusion,” Jackson said. “In entering into an administration you can never be sure of the outcome and it is often a case of dealing with the day to day issues whilst also pushing for the final goal of exiting administration.
“There have been many people involved with this process over the last year and many have lived and breathed every minute of this administration in their efforts to produce this result.
“I would again like to thank Ann Budge and her team at the club, the Foundation, the fans, Peter Duff and all at Morisons LLP for their outstanding legal advice and patience, as well as the staff at BDO who have all put up with a lot to ensure the great name of Hearts survives to fight another day.”
19 June 2013
Hearts enter administration with debts totalling around £30 million following the collapse of Vladimir Romanov’s business empire. BDO take over the running of the club and, within days, get rid of directors including Romanov’s son Roman. Staff also lose their jobs as severe cutbacks are made.
Three potential bidders for the club emerge, former Livingston owner Angelo Massone, Peebles businessman Bob Jamieson and the Foundation of Hearts, a coalition of supporters’ groups. Massone’s bid of around
£4 million is the highest, but has no provision for maintaining the club as a going concern.
Foundation of Hearts named as preferred bidder by BDO. They propose a Company Voluntary Arrangement worth
£2.5 million, well short of the sum sought by Lithuanian company Ukio, who hold a security over Tynecastle.
Ukio administrators agree to start talks on CVA.
Meetings of Hearts’ shareholders and creditors approve the proposed CVA. Ubig, like Ukio formerly owned by Romanov, abstain.
Long-time Foundation member Ann Budge named as sole director of Bidco, the company set up to take over the club. Budge takes the title of executive chairwoman designate.
As delays in Lithuania continue, Bryan Jackson of BDO warns that club is about to run out of money. Ubig and Ukio agree to CVA.
Budge takes over day-to-day running of the club and appoints former manager Craig Levein as director of football. Manager Gary Locke and assistant Billy Brown depart along with a number of players. The club’s under-20s coach Robbie Neilson named new head coach.
Fifty-one weeks after going into administration, Hearts complete their exit when the Court of Session approves BDO’s application.