Hearts administrator Bryan Jackson still has work

Hearts sailed perilously close to liquidation but survival is now all but assured. Picture: Ian Georgeson
Hearts sailed perilously close to liquidation but survival is now all but assured. Picture: Ian Georgeson
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WHILE it might have been assumed that Bryan Jackson would have got a long overdue good night’s sleep on Wednesday after creditors of the failed Lithuanian bank Ukio Bankas finally agreed to sell their shares in Hearts, the administrator says he will not get the rest he craves until the essential paperwork is signed and the ink is dry.

Jackson says he is now 90 per cent certain that the share and purchase agreement will be concluded without further incident, but he remains cautious in light of the seemingly endless struggle he has faced to help steer the club clear of what was an all-too-real threat of liquidation.

“I said at the beginning that the chances of the club emerging from administration were five out of ten and then I got cautiously optimistic, which wasn’t like me, and then when we had our preferred bidder and then at the end of last year when we had the creditors’ meeting and convinced Ukio and UBIG to either agree the CVA or abstain at that time, I was feeling quite good.

“But the last two, three weeks I got to the stage that I genuinely began to fear that it wasn’t going to happen. I had a really bad feeling because the Ukio and UBIG meetings kept being postponed. My 5/10 went down to 4/10 and even 3/10 for a while. There didn’t seem like there was that will to get it over the line.”

But with assent from the Lithuanian creditors, an agreement to transfer the shares to businesswoman Ann Budge and her Bidco group is poised to be formalised, provided they can ease through the cooling off period which expires on 27 April.

Jackson added: “The Ukio vote has turned everything around and it’s now a 9/10 because we are now down to a sale and purchase agreement. The other encouraging thing is the fact that the Lithuanians have gone public and have said we have consent so we now have the momentum and I can’t believe we can’t sort any little issues that might arise now.”

But until the deadline has passed and the agreement has reached the point of no return, he says no-one should get too carried away.

If Jackson and his BDO colleagues can ease matters over the line and officially save the club from liquidation, it will be a significant coup, with the majority of more than £25 million of debts accrued by the club during years of calamitous ownership written off and a new era of fan ownership beginning.

Jackson says that the process has been more testing than the one he had to sort out at Dunfermline Athletic, which he had previously considered his most complex case.

He said: “Hearts is topping Dunfermline because of the issues with foreign jurisdiction, the different cultures and the fact the shares were owned by two different banks, both of which have their own administrators and therefore their own legal advisors and a different legal process. Shove all those into the mix and this is proving to be the most difficult one to get over the line.” The hope is that the club can be sure of exiting administration well ahead of the new league season so that there are no further points deductions or consequences.

“While the target is now June, if the documents are signed then the shares will go over to Ann Budge’s Bidco and they will then own the company,” added Jackson. “It will still be in administration but we would then effectively pass control and focus on exiting adminis-tration. She will, in reality, control Hearts as soon as the deal is done. We will stay in place to make sure all the outstanding bills are paid but the business will be hers to run and we will just be working together for the last few weeks.”

Jackson says no-one involved in the battle to safeguard the Tynecastle club has ever lost sight of how significant the consequences of liquidation would be. “Not only would a 140-year-old club die, but you have to consider how that happening would affect businesses in the surrounding area and how it impacts on the Edinburgh economy. There would be no football debts paid because the company would be gone, even more people would lose their jobs and so on and so on.”

With football debts currently listed as around £535,000 gross, that figure will come down when the net costs are calculated and will have to be dealt with before all sanctions are lifted. But repaying those debts will fall to Budge, who is already looking at long-term plans.

“Ann will be formulating her own ideas already,” says Jackson. “She has been in and about the club and she has been given any information she has requested in terms of playing and non-playing staff.

“She has been given all the information she has needed and she is making her own mind up about who she wants, who she doesn’t want, who she is bringing in and I’m not party to any of that, although anything she has wanted my opinion on I’ve given her an honest answer about. But, her opinions haven’t been shared with me and I wouldn’t expect them to be.”

In a letter issued to those who have pledged money to the Foundation of Hearts and support the promise of fan ownership moving forward, Budge acknowledged that there are a number of questions supporters still want answered but she did attempt to outline what happens next.

“Firstly, where are we with regard to exiting administration? The news on Monday, 7 April that we had agreement to the transfer of the 50 per cent shareholding in the Club owned by UBIG was a significant step forward in getting Hearts out of administration.

“However, the last major hurdle of the Ukio Bankas Creditors’ Committee meeting seemed to be running on forever. Therefore, we were all absolutely thrilled to receive news on Wednesday morning that Ukio had agreed to the CVA, to the transfer of the remaining 29.9 per cent shareholding in Hearts and to the release of the security over the stadium. This was the highest hurdle to clear and takes us about 90 per cent of the way to getting the club out of administration. The last stage, in terms of the dealings with the current owners, is to complete the legal Sale and Purchase Agreement (SPA) – the formal contract, which will be signed between Bidco 1874 and Ubig, and which will trigger the £2.5m payment and the corresponding transfer of shares and assets to Bidco 1874.

“We have been working on this alongside everything else and, hopefully, this can be concluded soon. However, we have to remember that the cooling-off period for the UBIG decision does not lapse until Sunday, 27 April. This is the period when a creditor can still object to the decision. There is no cooling-off period for the Ukio Bankas decision. However, the final step of signing the SPA cannot happen until after this date.

“When the SPA is signed, the club’s ownership will pass from the current owners to Bidco 1874, the company set up by myself to take ownership of Hearts. I don’t think I need to spell out to anyone that I am a fan and am only doing this as a fan, with the express intention of passing ownership over to the wider supporter base, via FOH, over the course of the next few years.

“While final negotiations with the current owners are being concluded, there are a number of other legal processes and documents to be finalised and agreed here in Scotland. Once again, we are working hard to ensure these are all completed as quickly as possible.”

And Jackson says he is again cautiously optimistic, although he won’t rule out the possibility of a minor hiccup or two on the route to a conclusion.

“It has been a real rollercoaster,” he said. “I know people think that I always just paint a really black picture, but I always say what I believe. There’s no point in getting people’s aspirations up and not preparing them for the worst because the worst can always happen.”

In a year that has been torture for all associated with Hearts, last week’s sudden good news from Lithuania would suggest that, while relegation is a reality, the worst case scenario has been averted.