LUTON TOWN DEDUCTED A FURTHER 20 POINTS BY THE FOOTBALL LEAGUE

Luton Town have been handed a further 20-point deduction by the Football League for failing to exit administration in the correct manner via a Company Voluntary Arrangement (CVA) with its creditors.
Coupled with the previous 10-point deduction imposed by the FA in June for financial irregularities, it means the Hatters will start the 2008-09 season in League Two on an unprecedented -30 points.

This has resulted in betting company Ladbrokes giving the Hatters odds of 1/10 on being relegated from the Football League in the forthcoming campaign. Luton Town have never been out of the Football League in their 123-year history.

As well as imposing the points deduction, the Football League have also informed LTFC2020, the consortium aiming to take control at Kenilworth Road, that they must pay a further £500,000 to purchase the club, and must also sign a declaration that states that they cannot appeal against this decision. If LTFC2020 fail to sign this declaration, Luton Town will not be able to compete in the Football League next season and would subsequently go out of business.

Members of the Hatters' prospective new owners, Stephen Browne and Gary Sweet, stated that they had looked into the possibility of being demoted directly to the Blue Square Premier (previously more famously known as the Vauxhall Conference), but the Blue Square Premier does not accept clubs in administration and this was therefore not an option.

They were consequently left in the position of having no option but to agree to the terms set out by the Football League, in order to make sure that professional football could remain at Kenilworth Road.
The Football League released a statement which read, "In the case of Luton Town, the Board considered an application from a new company, called Luton Town 2020, which has applied to join League Two in place of the existing club, which is in administration.

"Luton Town was unable to agree a Company Voluntary Arrangement (CVA) with its creditors and as a consequence is unable to satisfy the normal conditions of the League's insolvency policy for exiting administration. The Board decided, however, that it was prepared to exercise its absolute discretion under its 'exceptional circumstances' provisions in order to accommodate the new entity.

"In accordance with the recent precedent, the Board decided to include the following principle conditions of entry as a pre-requisite to the exercise of that discretion: -

1. The new company (Luton Town 2020) should pay the unsecured creditors the amount offered at the time of the CVA hearing (16 pence in the pound).

2. A 20-point deduction should apply in the 2008-09 season, which also takes into account the fact that this is the club's third insolvency event in the last ten years."

LTFC2020 director Stephen Browne said, "It's quite clear that we made a mistake. We placed our faith in the footballing authorities. We have tried to do everything openly and honestly. We tried to give our best offer from the start. Obviously the very clear message from both the FA and the Football League is that doing such a thing is a total waste of time. Once again, the club suffers from the mismanagement of the past. Once again the faithful supporters are left high and dry. Once again, a policy of honesty is not at all recognised by the football authorities who claim they want to clean up the game. Once again the Football League fail as who was it that cleared the previous owners as 'fit and proper' owners in the first place?

"The Football League had our application at the end of April. They have prevaricated because of the Leeds case (Leeds United were deducted 15 points the previous season by the Football League) and this has caused the administrator costs to rise as he has been managing the clubs business for longer than needed. Even bearing this in mind, the Football League have decided to dictate what should be paid for the football club as it now appears that they are the only people who can set a purchase price for a football club. It's a gun to our heads because we also have to forego our right of appeal; or else we will not be allowed to stay in professional league football.

"It is quite clear to me that to incur significant costs of seeking a CVA, as well as the extra time involved, is something that is a total waste of money. In addition, the Football League are confused - their statement says, "In line with recent precedent" when it was very clear from the Leeds case that the Football League were told NOT to view that outcome as a precedent.

"We have already discussed this internally and have decided unanimously that we will continue the fight by sticking to our principle of openness and honesty. People who should, in theory at least, be protecting supporters and encouraging honesty in the game will not bring us down. They are clearly trying to push Luton Town out of existence for mistakes that they should take part of the blame for. It is obvious that their insolvency policy is in disarray and even after the Leeds case, they are still no nearer bringing their policies in line with UK law. It's not a laughing matter anymore, but even so we will continue to ensure that Luton Town has a solid and sustainable future, despite what the Football League do to us."

Prospective chairman, TV personality Nick Owen, said, "We can't believe the tribunal can be so vindictive. What on earth are they thinking of, trying to destroy us like this?

"I just do not understand. All right, give us some sort of sanction, but 20 points, plus the 10 from the FA, it's just beyond belief. How they think we can survive that, I do not know.

"We knew we would get some sort of points deduction and we were hoping it might have been less than 15. We were even hoping that, if it was 15, it might have been backdated. All this happened last season and we wanted to come out of administration then.

"The League said 'we want to sort out the Leeds situation first' so the fact it was delayed into the summer was not our fault. If it would have been sorted out last season, the extra 15 or 20 points would have been given to us on top of the 10 we'd already got when we went into administration, so it wouldn't have been so bad.

"We're very hopeful that we might get those (the FA agent penalty) points returned to us, so we may only on start minus 20. I say 'only' but that's bad enough - but it's better than minus 30.

"We feel we have a very strong case because these misdemeanors were carried out by people who are absolutely nothing to do with the club now."

However, Luton Town manager Mick Harford has reiterated his commitment to the club saying, "I have always loved this club but, over recent months, I have realised how much more I will love it when LTFC2020 finally take ownership.

"I have a great deal of experience in the game but never before have I been so encouraged and enthusiastic about working in such a strong management team.

"It won't be easy by any means but the team we're building will be strong in character and will rise to the challenge. We have to remain resolute and confident we can retain our long history in the league and I will give that commitment to Luton Town Football Club and our fabulous supporters."
Story date: Monday, July 14, 2008