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High Court to rule on football debts

Brian Farmer,Pa
Thursday 05 May 2011 17:17 BST
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The High Court is to be asked to decide whether league rules governing the way football clubs clear debts are fair.

Critics say rules operated by the Premier League and the Football League mean that certain creditors are given preferential treatment when clubs get into financial difficulties.

They say the rules mean that creditors from the world of football go to the head of the queue and get paid in full while creditors not involved in football have to share the remainder and can be forced to settle for a fraction of what they are owed.

HM Revenue and Customs (HMRC) - often a creditor when clubs become insolvent - has taken legal action against the two leagues in an attempt to force rule changes.

Mr Justice Newey heard legal argument about the case during a High Court hearing in London today.

The judge said HMRC's claim against the Football League would be tried at the High Court in London on November 28. He said the Premier League would also be represented at the trial.

Gregory Mitchell QC, for HMRC, told the judge that it was important for the High Court to make a ruling about the legality of the "football creditors' rule" after hearing arguments from HMRC and the leagues.

He said the HMRC would argue that the "rule" was unlawful and that all creditors should be treated in the same way.

Both leagues dispute the HMRC's claims and argue that their rules are fair.

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