How many petitions is too many?

Southend-On-Sea may be home to the longest pleasure pier in the world (at just over 7,000 feet) and after the activities of last week is still just about home to a football club.

Southend United FC have long been friends with the solicitors’ office of HMRC, having received winding up petitions as far back as 2010.  However, the current financial difficulties began prior to the Covid pandemic which resulted in non-payment of players' and other employees' wages in December 2019 and included a winding-up petition heard in January 2020.  Club chairman Ron Martin paid £140,000 to fund players' wages, and the winding-up petition was dismissed after debts were cleared.

Things did not improve with the wages for February (2020) not being paid on time.  In March, a further HMRC winding-up petition for £493,931 was adjourned - first to April, then three more times, eventually to October 2020 when it was finally dismissed after having been paid.

In a bid to reduce costs during the pandemic, the Shrimpers (as the club are known) initially placed several staff and some players on furlough (a move criticised by the Professional Footballers Association who said the club had "consistently" let players down over wages).  The club politely ignored those comments and increased the whole playing staff to being on furlough once the season was ended prematurely.

As Kipling wrote in his Just So stories, the leopard was unable to change his spots and in October 2022, HMRC issued another winding-up petition which was adjourned to January 2023. After members of staff were late receiving their October 2022 salaries, the Shrimpers Trust and shirt sponsor PG Site Services each loaned the club £40,000.  CEO Tom Lawrence said the club had a funding gap of about £2M a year and promotion would reduce current losses to more manageable levels and presumably pretended to answer his mobile when anyone piped up about wrongful trading.

In January 2023, the HMRC winding-up hearing was adjourned again, to the beginning of March 2023.  The Chairman was reported to be seeking a £5M loan to pay debts (which included the St. John’s Ambulance who were now refusing to provide medical cover at home matches and £1.4million in unpaid tax owed to HMRC.   Less than 24 hours before the winding-up hearing, the club said it had paid the tax bill, adding that "funds as working capital" had also been injected into the club.   

The reprieve was short lived as in May, HMRC issued their 18th winding-up petition (which the newsroom feel needs writing as eighteenth like the Vidiprinter would to highlight that ludicrously high number is not an error). This time, three companies, including shirt sponsor PG Site Services, had supported the petition but the hearing was adjourned giving Martin more time to sell the club (which was proving difficult as no-one was prepared to meet the conditions including £4.5 million for the stadium).

In late May, the club secured a court order unfreezing a bank account to enable it to pay players (keeping them at the club) and accountants, but some club staff were still awaiting March or April wages in early June.  Players and backroom staff again went unpaid at the end of June, and players refused to resume pre-season training until they were paid.  Anyone else seeing this as a JIEB question with some nice sub-parts about various aspects of the question facts?

July rolled round with the water supply to the club's training facility being turned off due to unpaid bills and the petition hearing being adjourned again.  In August, the winding-up hearing was adjourned for a third and final time, to 4 October 2023, with Judge Prentis telling Martin if he was in charge of any other business, it would have been wound up.  Martin told the court he was "confident" a sale to an Australian buyer (later named as Justin Rees) should be finalised by the end of September.

And finally, what appears to be good news for Shrimpers fans.  Last week, it was confirmed Martin had reached an agreement for the sale of the club to the Justin Rees consortium, with a formal takeover and completion date of 1 November. The deal was announced the day before the hearing of HMRC's winding-up petition at which Charlotte Cooke, appearing on behalf of HMRC, said: "My instructions are that the petition debt has been paid in full and we seek dismissal with costs."

In what amounted to only a 60-second hearing, Judge Briggs concluded: "Very well, dismissed with costs."