By James Rougvie and Bruce Robbins

DUNDEE FOOTBALL Club has begun the process of shaking off the reins of administration after creditors approved proposals which will see the club avoid the penalty of a 10-point league deduction next season but deny trade creditors most of the money owed to them.

The club’s alternative was liquidation and closure as it attempted to climb out of a financial black hole totalling over £18 million worth of debt.

Only a handful of creditors attended the meeting at Dens Park, including club chief executive Peter Marr and chairman Jimmy Marr, because administrator Tom Burton said that £12.5 million of the debt had been accounted for by proxy.

There were no dissenters and the proposals for the establishment of a company voluntary arrangement, a technical device for the purpose of restructuring the debt, were accepted.

Had creditors gone against the financial arrangements, the SPL would have hit the club with a 10-point league deduction for next season if it was in administration at the end of the month.

The vast majority of the club debt is owed to Halifax Bank of Scotland—£13.8 million—plus money due to club owners Peter and Jimmy Marr.

The agreement includes provision for preferential and unsecured creditors to get only a 25% share of the net funds from player sales during the transfer window.

As well as £1.1 million due to trade creditors, £853,000 was due to the Inland Revenue, £549,000 to Customs and Excise and £117,000 to employees.

Former manager Ivano Bonetti has lodged a claim of £927,000 and former director Giovanni di Stefano £35,000 in loan repayments.

In his report to the creditors, Mr Burton made it clear there would be “minimal prospects” of a return to creditors.

“It is very difficult indeed to predict with any degree of certainty the possible dividends payable as a result of the voluntary agreement.

“In a worst case scenario there could be no dividend to both classes of creditors.”

He added it could not be emphasised strongly enough that the company’s future finances were still highly volatile, and key factors affecting the club’s future viability included selling at least 3600 season tickets, cash flows from TV and strict adherence to budgets.

Cash flow projections indicated that the club could break even for the coming season and the following year, assuming the same number of season tickets and attendance at games remained at 2003/4 levels.

Mr Burton said it was not possible to say with any certainty if any proceeds from sales of players would be realised.

“We have some fairly well known players, some of whom may go for good money, but Scottish football is in a very depressed state. There is not a lot of money in Scottish football today.”

He said that the voluntary arrangement had to come to an end by May 31 next year or there would be the threat of another ten-point penalty.

In one of the few questions asked by a creditor, Mr Burton said the administration fee for the past six months amounted to £200,000.