The SPL have decided to discuss the situation at Hearts on Monday, after the SPL season ends.
The majority owner of Hearts and the main creditor, UBIG and UKIO Bankas, are both in, or have applied to go into, administration.
Mr Romanov’s always interesting stewardship of Hearts seems inevitably at an end.
The Lithuanian administrators will see what they can realise from Hearts – perhaps only the ground will prove worth anything?
The SPL Rules on Insolvency Events read as follows:-
Where a Club which was a member of the League in the immediately preceding Season takes, suffers or is subject to an Insolvency Event that Club shall be deducted the greater of 10 points and one third, rounded up to the nearest whole number, of the total number of points, excluding any points deducted for any reason, gained by that Club in the League in the immediately preceding Season and where a Club which was not a member of the League in the immediately preceding Season takes, suffers or is subject to an Insolvency Event that Club shall be deducted 10 points. Where the Insolvency Event occurs during a Season, the requisite points deduction shall apply immediately. Where the Insolvency Event occurs during the Close Season the requisite points deduction shall apply in respect of the immediately following Season, such that the Club starts that immediately following Season on minus the requisite number of points.
So, if Hearts are deemed to have suffered an Insolvency Event this season, then we look to see how many points they gained last year – 52. That is then divided by three and rounded up to 18, which would be the deduction from its points this season.
An 18 point deduction would ensure that Hearts would finish bottom of the SPL, would be relegated, and would have thus ensured John Brown would have accomplished a remarkable Houdini act. With one straight talking bound, they were free!
As matters stand, if Hearts are deemed not to have an Insolvency Event until after the season ends, then they would, as matters stand, commence next season in the SPL, but starting at minus fifteen points – a potentially devastating deficit.
How do the SPL define the “club”?
For the purposes of Rules A6.8 to A6.10 (inclusive) all references to a Club taking, suffering or being subject to an Insolvency Event and/or an Insolvency Process as well as including the owner and operator of a Club taking, suffering or being subject to an Insolvency Event and/or an Insolvency Process shall, if the Board so determines having regard to (i) the need to protect the integrity and continuity of the League; (ii) the reputation of the League; and (iii) the relationship between such owner and operator and the Group Undertaking concerned, also include any Group Undertaking of such an owner and operator taking, suffering or being subject to an Insolvency Event and/or an Insolvency Process.
Heart of Midlothian PLC is the entity which, in the Rangers parlance, owns the assets and business of Heart Football Club. That company is in the majority ownership of UBIG. So whilst the company owning the assets is not the victim of an Insolvency Event, it is in the discretion of the SPL Board whether or not to penalise Hearts.
The SPL Board must consider (i) the need to protect the integrity and continuity of the League; (ii) the reputation of the League; and (iii) the relationship between such owner and operator and the Group Undertaking concerned.
So the SPL Board is faced with more tough choices.
1 Is the insolvency of UBIG and Ukio Bankas close enough to Tynecastle to be treated as a “Hearts” insolvency?
2 Have “Hearts” therefore suffered an Insolvency Event?
3 If they have, will it be deemed to have taken place this season?
4 Does the appeal lodged by Ukio Bankas against its insolvency determination have the potential to affect the decision?
5 If not, then will the SPL Board impose an 18 point deduction for this season leading to Dundee’s rescue from relegation?
6 How would such an outcome fit with protecting the integrity and continuity of the league and its reputation?
If looking at “continuity” then there would be a lot to be said for Dundee remaining in the SPL and Hearts being relegated – on the basis that there must be a possibility that Hearts will not be in position to play football at the start of the next season – better the SPL start with 12 teams than 11!
There is also an interesting quirk regarding appeals. If the SPL Board decides to deduct 18 points from Hearts and relegate them, the Hearts can appeal against that decision.
However Dundee would not have the right to appeal, based on my reading of the rules, if the SPL Board chooses not to impose an 18 point penalty or indeed any penalty at all.
However, as a body affected by a quasi-judicial decision it would be contrary to natural justice for Dundee to have no rights of appeal at all. In that case they could have the option of taking a case for Judicial Review to the Court of Session.
So it looks as if the SPL could find itself left with another summer of uncertainty (over and above the confusion caused by the re-organisation saga).
The SPL Board is faced with a very tough choice – honour the results and relegate Dundee whilst leaving the SPL with a team not certain to start the next season, or impose a penalty and relegate Hearts, losing another of the bigger attractions from the SPL.
How quickly will a decision be made?
Last season ended with an argument about whether newco Rangers should get back to the SPL straight away, and as a consequence a dispute between Dunfermline and Dundee about whether Dunfermline were saved from relegation.
Dundee therefore could also face a second summer of uncertainty – and even if it is saved will it be too late to make its plans for an SPL season. A team set up for SFL1 will struggle in the SPL. Might survival through Hearts’ misfortune actually be a curse – dooming them to relegation next season too.
Posted by Paul McConville