Sheffield Wednesday beg for High Court delay

With four potential buyers now looking to strike a deal, the Owls hope to be granted a stay of execution when they face a winding up petition brought by HM Revenue and Customs over a 600,000 unpaid tax bill.

Sheffield-based businessman Mick Wright, a former director still owed 500,000 by the club, emerged as a potential saviour yesterday although Leicester City chairman Milan Mandaric, former East Stirlingshire chairman Spencer Fearn, and a group from the Middle East also have offers on the table.

If the High Court rejects the plea, the club's main creditors the Co-Operative Bank are expected to put the club in administration – a move which will not only result in a 10-point penalty by the Football League but jeopardise jobs at the club and lead to a sale of its prize assets.

The club, which has a total debt of nearly 30m, has failed to persuade either the bank or any of the potential investors to put up 600,000 and is due back in the High Court on December 1 over an additional unpaid 300,000 VAT bill.

Mandaric, who is seeking to invest in a new club after selling his stake in Leicester to a Thai consortium for a reported 40m, failed in a bid last week to buy a stake owned by former Owls chairman Dave Allen. The Serbian-born businessman, 72, has agreed a deal worth over 7m with the Co-Operative Bank – which is owed over 23m but is keen to sever its ties – however his takeover cannot proceed without agreement from the club's board.

"My offer is still there but the loan-holders did not want to go for it," Mandaric said last night. "What can I do?

"It's not my decision, it's the decision of those people still involved in the club. I don't know if I should wait around any more.

"I just hope they have a 'Plan B' and that they don't go into administration."

The Owls had been close to an agreement last month with Certified Oilfield Rentals, a company which had been introduced by former manager Chris Turner. That deal collapsed, however, after Dubai-based Kevin Mundie, the company's managing director, pulled out citing personal reasons.

Fearn, who is originally from Rotherham, set up the "Wednesday Forward" group with Sheffield accountant John Roddison and is proposing an immediate injection of around 5m with more to come if the Owls win promotion.

"We are doing our best to get the best deal for our club, that's all I can say at the moment," said Fearn.

Wright's plan is believed to follow a similar line and may hold more appeal to directors due to his long-standing relationship with the club.

Richard Cramer, a leading sports lawyer, fears the Owls will get no favours from HMRC in today's hearing due to political pressure from the new coalition government.

According to Cramer, who works for the Leeds-based Front Row Legal, the Treasury is now determined to get tough with football clubs or other businesses who fail to keep up with payment of tax.

"Under the previous government, there was a drive to back off from winding-up petitions against struggling businesses but now they are getting tough with all business and ask why should football clubs be treated any differently?" he said. "If a club is running at a loss and not paying PAYE why should they enjoy that privilege?

"Sheffield Wednesday is a club in the wrong place at the wrong time," he added. "Two or three years ago, the Treasury would have backed down and done a deal but there are no favours anymore and they are showing no tolerance.

"They may even use Sheffield Wednesday as a battering ram to send a message to every other club in the Football League. It will be mind-blowing if such a massive club has to go into administration. That will be breaking into the real fabric of the football industry.

"At least they have a chance, if they go into administration," Cramer added.

"They will have no assets but they will wipe out their debts. The club will be saved but it will be a long haul back as Leeds United discovered."

A spokesman for the Co-Operative Bank last night stressed that it was 'doing everything possible to avoid administration and reach a solvent deal'.

However, it is understood the bank would struggle to justify extending its support beyond current levels.

The Owls were served with a first winding-up order in July over initial PAYE tax debts and this rose to 1.1m by the time the Co-op Bank agreed a short-term bail out.

However, that was only agreed on the basis that a deal with new investors was imminent.