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LENDOIRO SPEAKS OUT

09 Nov 2012
Deportivo will try to avoid the administration figure, but before it must convince the Spanish Treasury to accept an agreement in which the club will pay the debt in ten years. Lendoiro explained the situation in a press conference.

The club doesn’t want to enter into administration, but has already presented the papers in order to begin the preliminary stage for it. It sounds contradictory, but it is the solution that president Augusto César Lendoiro and his board of directors have chosen in order to solve the crisis at Deportivo after the Spanish Treasury placed an embargo against almost all the incomes at the club. Without incomes the club won’t be able to pay its obligations and won’t be able to survive.

The figure of the administration functions as a rescue mechanism for insolvent entities and allows them to carry on running their business. In Spain there’s an initial phase called “pre-concurso” If the entity publicly asks to enter into this stage, and if later the motion is approved by a court, then the club will have four months in order to negotiate a new financial plan with the creditors. It’s not  matter of not paying the debt, but to prolong the deadlines.

A critical point on here is the debt with the Treasury, calculated at the beginning of the year in €34 million. The club admits problems to afford the payments, a situation caused by the relegation to Segunda División, and the main reason why the Spanish government placed an embargo over the club. During the stage of “pre-concurso” the club must establish a new payments plan with the Treasury –Depor wants to fulfill the payments throughout the next ten years- if not the administration will be unavoidable.

It’s what Lendoiro wants: to pay, with new deadlines and having the same facilities received by other clubs. Within this initial stage the law protects the entity against any demand, but if the club fails to gather the creditors and concrete a financial plan to pay the debt, then there’s no turning back point and the club will have to go into administration. 

Lendoiro tried to explain this situation during a press conference held at the Playa Club; there was a big expectation as the room was full of reporters. The president was supported in the meeting by his board of directors.

Firstly, an angry Lendoiro read a statement consisting of ten points:

1- Deportivo is viable. The incomes are totally superior to the expenses.
2- Depor don’t want to enter into administration.
3- Depor want to pay the full debt with the treasury and all the creditors
4- The Treasury has received more than twenty million Euros paid  by Depor during this year
5- Depor offered to pay the full debt in ten years
6- The treasury has sequestered almost all the incomes of the club
7- Deportivo have just presented a communicate assuring it is ready to reach an agreement regarding a new financial plan
8- Deportivo will keep negotiating with the Treasury
9- Deportivo want the same treatment received by other clubs in Galicia and Spain
10- Deportivo can take legal measures against the abuser [La Voz de Galicia]



Lendoiro during the press conference. Photo taken by Nando Martinez

Later, Depor’s boss started to answer the questions of reporters; he confessed that the relegation to Segunda was a factor that affected the financial situation of the club, "We weren't able to fulfill the payments at Segunda, for this reason the Treasury placed the embargo."

He also insisted that Deportivo don’t want to go to administration as it isn’t ethical, "What we want is to not affect anyone. It isn't ethical. What we want is to pay the full debt, but with new deadlines. The viability of the club is not in danger. Never. The possible agreement with the Treasury must take place. We must think of the others. The administration figure is very favorable for the clubs, but at Depor we understand that it isn't fair."

Lendoiro was very angry as he understands that other clubs in Spain have received a much favourable treatment, "Almost all the incomes are sequestered. It’s something without precedents. It didn't happen before to any club. We just want the same treatment received by others. If the treasury wants to collect the money then they must offer the same treatment received by others. I believe that the offer to pay the debt in ten years is reasonable. Other have been allowed to pay in twenty years and even forgiving 70% of the debt.”

“All I know is that the rest of clubs have received a very different treatment. I recognize the debt and want to pay, but want facilities; if not you are killing the business. If they drown you then I cannot pay you. We were paying four or five million to the Treasury through Mediapro [the owner of Depor’s TV rights]” He added.

Throughout the press conference he attacked La Voz de Galicia after the paper wrote several pieces on this issue, the president even referred to them as the “abuser”.  In this sense he accused the newspaper of been putting pressure in order to harm Deportivo.

Depor’s boss continued insisting that the management of the club doesn’t want to enter into administration, and also said that the players and employees won’t be affected, "Everyone wants to see Deportivo going into administration, the only one that didn't want it is the club. We want to find formulas in order to see the Treasury collecting all the money owed to them. The club's employees won't be affected by this situation. We already spoke to the team’s captain regarding the issue. I am convinced that this situation won't affect the performance of the players. Nothing will be affected, only that the abuser became mad."

Finally, Lendoiro believes that Deportivo will be able to overcome this though scenario, “I'm pretty convinced we are going to surpass this situation; we even will go out of this reinforced. This is the reality, as long as we can, we want to avoid the administration. We'll know after two or three meetings if we can reach an agreement with the Treasury."

ARCHIVE NEWS NOV/12

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