HEREFORDSHIRE Council will not fight in court for what it is owed by Hereford United saying the debt doesn’t affect the authority’s “financial viability”.
United escaped liquidation again at the High Court this week, but Herefordshire Council is still not on the list of those owed.
The council is landlord to the club’s Edgar Street ground but was not put to the court as a creditor of Hereford United Football Club (1939) Ltd despite being owed around £65,000 in rent arrears, business rates and legal fees.
However, the council was listed as a creditor during the attempt by the club to set up a Company Voluntary Arrangement (CVA).
But the council took no part in the CVA as it considered that other creditors were likely to be more affected by the outcome.
Defending its stance in a statement, the council said the amount owed would not affect its own financial viability as opposed to smaller creditors, where the amount owed could be the difference between remaining in business or not.
The statement confirmed that the council has not joined in the current legal proceedings by other creditors seeking the winding up of the club.
But, if those proceedings are successful, the council will recover the same percentage of the debt owed as the other unsecured creditors.
A recent memo sent to councillors said that following the rejection of the Company Voluntary Agreement (CVA), the council’s position over the club had not changed.
That position had the council not making any move over the leases on Hereford United’s Edgar Street ground until the outcome of Monday's hearing was known.
The council is already under pressure from members to hold an “official investigation” into the authority’s part in the crisis at Hereford United.
There have even been calls for an outside agency to investigate any culpability the council may have.
The council has already admitted that no “separate” due diligence report was done on the financial state of Hereford United ahead of the ground leases being re-assigned.
Instead, members have been told that an “appropriate level” of due diligence was carried out given that the club was a current tenant.
Meetings and telephone conferences between council representatives and representatives of Hereford United have gone on since January without minutes being taken.