DERBY COUNTY officially entered administration.
As a result, the Rams were hit with a 12-point deduction from the EFL.
Consulting firm Quantuma has been appointed to take control of the club’s affairs.
Derby confirmed the news on Wednesday.
And Andrew Hosking, Managing Director and Co-Director of Quantuma, said: “I can confirm that Andronikou, Carl Jackson and I have been named co-directors of Derby County Football Club today.
“Covid-19 has had a significant impact on the club’s finances and its long-term ability to continue in its current form.
“We recognize that with the start of the 2021-22 season last month, this news will be of concern to stakeholders and fans, in addition to the city of Derby and the football community at large.
“We are in the early stages of evaluating the options available to the club and would invite all interested parties to come forward.
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“Our immediate goals are to make sure the club completes all of its league games this season and to find interested parties to protect the club and its employees.”
The Rams are in dire financial straits and the process of entering administration began on Friday night.
That blow to manager Wayne Rooney came when lawyers for the club notified the High Court that they would appoint an administrator.
Derby confirmed the news with a statement on its official website and said: “This action has been necessitated by a number of developments.
“Last week it became clear that the ongoing process of identifying a buyer for the club is unlikely to be productive in the short term, despite the number of negotiations with credible parties.
“Because the Covid-19 pandemic has had a severe impact on revenues and profits from all of its activities, the club has not been able to meet its daily financial obligations.
“The managers had no choice but to make the difficult decision to take this step and protect the club.”
“EFL IS DISAPPOINTED”
An EFL statement read: “With confirmation from the Derby County Football Club that they have filed a notice of intent to appoint directors, the EFL may confirm tonight that the club will be the subject of a case insolvency according to the terms of the EFL regulations.
“As a result, the club faces a 12 point deduction.
“Once the EFL receives formal notification of the request, the deduction will be applied.
“The EFL will initiate discussions with the parties concerned in due course with the aim of achieving a positive result for the long-term future of the club.
“The league is disappointed with the comments made by the club regarding the COVID loan facilities.
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“The EFL took on an increase in debt to provide its clubs with access to funds that would help them cope with the impact of COVID and, as with any loan, this was subject to a deadline and criteria. eligibility which Derby County was unable to meet. “
Rooney was preparing his team for Saturday’s 2-1 victory over Stoke City when Morris opted for the “nuclear option” after months of financial battles.
The players will need to be paid in administration as they are football creditors and they should have their money this month.
However, other creditors suffered massive losses and Morris would lose control of the club he had run for years.
Derby pinned his administration on the Covid-19 pandemic, claiming to have taken a £ 20 MILLION affected on their cash.
The Rams’ statement continued: “The irony is that the club’s financial forecast shows the emergence of a financially viable image.
“In the absence of the Covid-19 pandemic, we undoubtedly would have been able to trade.
“However, the impact of the Covid-19 pandemic and the unpredictability it created created too much tension.
“As the Covid-19 pandemic and the lockdown tightened their grip, the club’s income and cash flow took a hit by around £ 20million.
“This season, the Covid-19 continued to have a negative effect on the club’s income.
“We had drastically reduced our payroll, but the main benefit of those cuts was not going to take effect until this season.”
Derby also highlighted the complications of selling a football club during a pandemic and criticized the EFL for not helping them.
“EFL HAS BEEN CONSTRAINED”
The club added: “The Covid-19 lockdown also meant that we were unable to have face-to-face meetings with a number of potential buyers who were unable to visit the stadium or the pitch. ‘coaching.
“A planned sale of the club and stadium that was slated to close in January 2020 collapsed when the EFL was forced to challenge the stadium sale transaction, a charge that would be dismissed around nine months later.
“The litigation and pending charges regarding the P&S [profit and sustainability] regulations, and the extended timeline for reaching a resolution, added additional uncertainty and made negotiations difficult.
“These problems have also led the EFL to prevent the club from withdrawing around £ 8.3million in financial aid, as has been made available to all other Championship clubs with regard to the settlement of debts PAYED, further aggravating our cash flow and our ability to meet our financial obligations.
“Even today, we are awaiting the response from the EFL on these questions. This response is important for the club, its supporters and also for any potential buyer.”
Derby was already facing separate point penalties for past financial fair play violations and has yet to receive its sanction from the EFL.
Rooney’s side are expected to be slapped with a nine-point penalty, which means they could potentially be pegged at 21 points and more suspended.
It’s a hammer blow for Manchester United icon Rooney, who has put together a whole new squad this summer despite the club’s looming disaster.
Many of them, like Phil Jagielka and Sam Baldock, are only signed until January and may not be kept after administration.
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Derby has also been threatened with a two-season transfer ban if he does not settle his transfer debts by the end of September.
The team have made a good start to the championship season – given their situation – picking up ten points in eight games.
But the cash-strapped club are now facing relegation to Ligue 1 and a descent into the pyramid of English football.