Dumbarton FC deal agreed to exit administration
A proposal has been agreed that would allow Dumbarton to exit administration and pay their creditors in full, the Scottish League 1 club's administrator has announced.The Sons were placed into administration and docked 15 points by the Scottish Professional Football League in November after years of financial turmoil. The deal, which has yet to be finalised, with Oxford-based Gareth Phillips would wipe out the club's debt, with working capital made available for next season and litigation ended against the businessman's Pendragon Group Limited.By then, they will be playing in League 2, with Stephen Farrell's side already relegated and sitting bottom of the third tier.
On being appointed administrator in November, Quantuma said insolvency was the result of non-receipt of "significant" funds owed from the sale of land in 2021.Accounts until 31 May 2023 later showed the club were due to receive gross proceeds of £1.85m.A statement on Dumbarton's X account now reveals that "heads of terms with Phillips have been agreed "that would see the club exit administration solvently and with all creditors paid in full".It continues: "Fans will be aware that the administrators have been engaged in litigation against Pendragon Group Limited, of which Mr Phillips is the principal."The full terms of the proposal are subject to confidential negotiations. However, as part of the proposal, the litigation with Pendragon would be concluded on the basis Pendragon would not hold security over the club's assets."Mr Phillips would introduce sufficient funding to stabilise the trading of the club going forward and the administrators are required to be satisfied that there is security for cash flow and a business plan to provide support for the club for the next three seasons."A non-refundable deposit has been received by the administrators, which will cover any short-term trading shortfall whilst the transaction is being negotiated, until the target completion date in early May."Dumbarton fans had raised more than £120,000 to keep the club running in the present season.Earlier this month, the Sons Supporters' Trust had urged Phillips "to work in the best interests of the club" and hoped the land would be returned to the club.The Trust claimed that Phillips owns 80% of shares in Cognitive Capital, which holds a majority shareholding in the football club, and is behind Pendragon, "which currently holds the charge over land at the stadium".It also urged the sale of the club "to a third party who have the genuine interests of the club and footballing community at heart, not simply a desire to build houses"."We also note that the company, More Homes DFC Ltd, is now dissolved via a compulsory strike off notice," the trust added. "This is the company that the 'development land' was sold to."
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