AVFC: Tortious Interference

AVFC director of football Steve Round was sacked this week by Tony Xia as the embattled owner seeks to reshape the senior management team at the club. Round’s departure was not unexpected but adds further fuel to the fire that Xia is not looking to sell the club any time soon.

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James Nursey went into further detail on his Twitter account where he made mention that Round had brought potential buyers of AVFC to the table.

The implication made by Nursey is that like Keith Wyness, Round has been sacked for daring to suggest that Xia has to sell and making moves in that direction.

The Mirror article written by Nursey and Neil Moxley makes mention that Wyness is suing the club for constructive dismissal.

However, this website has learned that is not technically true, and the actual reason Wyness is suing AVFC is much more indicative of the problems to the club.

It’s understood by this website that Wyness is suing for “tortious interference”.

Tortious interference is where an employer intentionally stops an employee from carrying out legally required duties.

An example would be an employer preventing a health and safety officer from carrying out certain legal duties despite that officer being personally liable for any claims that may arise.

While the exact details of the claim isn’t known to this website, the implications as to why Wyness is suing for tortious interference are obvious.

As a director of AVFC, Wyness would have had certain fidicuiary responsibilities to undertake if he believed that AVFC were trading insolvently.

If a creditor has served an official notice requesting payment of a debt that totals more than £750 and you fail to make payment within 21 days the creditor can take you to court and have your company wound up legally insolvent. At that point you could be subject to administration (if the creditor holds a legal charge on your debenture), liquidation, or your company could be in danger of being wound up. However, if you take action to show that you are making an attempt to satisfy creditors (i.e. – by pursuing a voluntary arrangement or pre-pack administration) you can postpone or completely avoid the demise of your company and facilitate a better outcome. If, however, you cannot show that you are acting in the best interest of the creditors you could face penalties that require you to pay company debts.

(taken from https://www.realbusinessrescue.co.uk/business-insolvency/trading-insolvent-director-responsibilities)

It’s well known that AVFC were threatened with a winding up order by HMRC in May over unpaid taxes. HMRC do not make those kind of threats for a first offence, so therefore it would be reasonable to assume that Wyness knew there was trouble and that he had to take action to try and resolve this, as per his responsibilities.

As Wyness is suing for tortious interference, the implication would be that he was prevented from seeking insolvency advice and / or investment for AVFC by Xia, despite his fiduciary responsibilities to do so.

The further implication of this is twofold; that Xia cannot let the club go into administration nor can he sell the club.

Xia has somewhat confirmed this in his recent open letter to AVFC fans, as posted on the club website on Friday July 6.

This is not good news at all for AVFC fans.

While administration would be painful, it would also take control of the club away from Xia and put it into the hands of someone whose aims would be much clearer; ie to get rid of debt and to make the company solvent again.

The alternative is a situation whereby Xia does what he can to maintain control of the club. This would mean drastically reducing outgoings, trying to get as much money through the door as possible to reduce ongoing debt and trying to survive through it.

AVFC fans only need to look at the operation of Birmingham City during the period Carson Yeung was on trial to see how this would work.

All players with any value sold; all avenues of forward financing explored, and a strict cap on outgoings such as new player wages to ensure that the club can continue to trade going forwards.

It doesn’t paint a pretty picture.

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