Sports lawyer Ilya Skoropashkin commented on the situation with the start of bankruptcy proceedings against Veres Rivne and its impact on the club's life in a commentary to the "UF".
- The Veres president assured us that the bankruptcy proceedings were fine and the club would not be harmed, and that the shares would only increase in value after the bankruptcy proceedings. Is everything really as optimistic as Ivan Nadein describes?
- Of course, the owner of the club knows best, as the further development of the situation depends solely on the financial capabilities of the club's sponsors and agreements with creditors. However, when a business entity is involved in bankruptcy proceedings, it usually has a negative impact on the value of its shares.
- Does the start of this procedure mean that the club may be liquidated?
- The initiation of bankruptcy proceedings does not in itself lead to the liquidation of a football club. As a rule, rehabilitation (financial recovery) is applied, which provides for various mechanisms to restore the debtor's solvency: increasing the authorised capital, selling the debtor's property, restructuring its debts, attracting investors, etc.
It should be noted that participation in bankruptcy proceedings is inherently risky in the football industry, which, even in the calm pre-dockyard and pre-war times, was usually unprofitable.
According to the court's decision to initiate bankruptcy proceedings, Veres owes the creditor almost UAH 55 million, and, as stated in the court's decision, the club's representative acknowledged the debt and said that Veres had no ability to repay the debt.
Despite the fact that the bankruptcy procedure itself can take years, the immediate risk for Veres is primarily the inability to be certified by the UPL for the next season, 2024/2025.
In particular, in accordance with paragraphs "c", "d" of part 3 of Article 55 of the Regulations on the certification of football clubs, in the application for certification for the next season, Veres is obliged to notify the UAF of the fact that a bankruptcy case has been initiated against it. At the same time, in accordance with subpara. "g" of Part 2, Clause "B" of Annex XXV to the Rules for the Certification of UPL Football Clubs, an applicant club must be denied certification if, during the last 12 months preceding the certification season, it has received protection from creditors, which, within the meaning of the Rules, is participation in bankruptcy proceedings.
In other words, due to the initiated bankruptcy proceedings, regardless of the consequences of the club's possible financial recovery, Veres runs the risk of not receiving a UPL membership certificate for the next season, even if it has positive sports performance.
- Perhaps Veres no longer expects to be registered in the UPL and the club is considering the option of relegation to the First League as the main one, do they have the same requirements for certification or is it easier to pass it?
- The UAF's official website contains the regulations for the certification of PFL clubs in the 2015 edition. If it is up to date, the conditions are more lenient. The club can be deprived of the certificate only if it is declared bankrupt (clause 16.5 of the Regulations).
- Will it be difficult to change the UPL certification regulations for Veres? Because now it actually turns out that even the bankruptcy procedure will be closed, the very fact of its appearance already puts an end to Veres' participation in the UPL in the 2024/2025 season?
- I don't think they will change anything on purpose. Moreover, the UAF does not have a custom of strictly adhering to its own regulations. Remember how in the 2017/2018 season, the same Veres entered the UPL past Chernihiv's Desna, which, on a sporting basis, should have taken a place in the tower but did not receive a certificate from the UAF.