Hearts in fresh turmoil over battle to choose administrators

The Tynecastle club confirmed on Monday night they planned to serve the Court of Session with their intention to apply for administration.

The club's board are understood to want accountants from KPMG to handle their case.

However, Press Association Sport reported that BDO - the firm currently battling to save Dunfermline - is the preferred choice of Kanuas-based Ukio Bankas, which owns 29.9 per cent of Hearts and is owed £15 million by the club. It also holds a claim against Tynecastle as security on the debt.

However, the bank last week lost an appeal against being liquidated and its operations and finances are now being controlled by Gintaras Adomonis of Lithuanian administrators UAB Valnetas.

Hearts majority shareholder UBIG - which owns 50 per cent of the club - has had its assets frozen after admitting it cannot service its liabilities. Administrators, however, have yet to be appointed to oversee its fight for survival, leaving the Ukio Bankas administrator to call the shots.

The troubled situation of both companies - both formerly controlled by Vladimir Romanov - has now raised real fears among the club's supporters that Tynecastle could be sold off to meet the debts of the parent companies.

The decision to place the club in administration follows months of turmoil at Tynecastle.

A winding-up order launched by Her Majesty's Revenue and Customs in December over an unpaid £450,000 tax bill was only staved off with the help of a £1 million sum raised by supporters.

The threat of a second winding-up order following a row over an outstanding £100,000 sum caused yet more panic, although the majority of that sum has now been paid.

But that was not the end of their troubles as the Tynecastle outfit were then hit with an automatic transfer embargo by the Scottish Premier League last Friday after admitting they could not afford to pay their players.

The club was already under a temporary signing ban after the league was informed of their tax row.

The SPL took action just 24 hours after the Gorgie board released a statement saying they had entered a "critical" stage in their battle to service a £25million debt as well as financing tax payments and running costs.

The entire Hearts squad was put up for sale in a desperate bid to raise the reported £500,000 needed to see the club through to the start of the new season.

Labour MP Ian Murray is leading the Foundation of Hearts supporters' group who hope to buy the club, with a formal bid expected to be lodged by the end of the month. There is also interest from a number of other parties, including a Scandinavian consortium.

The club are now set to face a 15-point penalty when the new SPL season kicks off on Aug 3.

Top-flight rules state any club suffering an insolvency event will be stripped of 10 points or a third of their previous season's tally, whichever is the greater. Hearts finished the 2012-13 campaign in 10th place with 45 points.

The administrator of Ukio Bankas later confirmed he would object to the potential appointment of KPMG and would lodge a notice with the court to appoint an administrator proposed by the Lithuanian bank.

In a statement, Adomonis said: "We thoroughly analysed (the) financial and legal framework of Hearts' case and, taking into account failure by Hearts to cover the debt to HMRC, it appeared that administration of the club is the only option available at the moment.

"We still believe that we should stay with our ultimate goal to defend the interest of the creditors of Ukio Bankas and sell the club to the appropriate investor as soon as possible.

"Thus, we want the administrator to be not only experienced but dedicated to football as well."

Administrators battling to save Dunfermline have received two bids for the club.

The fans group Pars United - which hopes to raise £500,000 through an appeal to supporters - was the first to lodge a formal bid with Bryan Jackson of accountancy firm BDO, which took charge of the club's finances in March.

A mystery rival offer was also submitted with a preferred bidder unlikely to be named before the end of the month.

The two bids contain proposals to buy both the club and the stadium, which falls under separate ownership.

East End Park Ltd, a company set up by former club owner Gavin Masterton that entered administration last month with multi-million pound debts, is currently controlled by KPMG.

That firm also has to study the proposals and hold talks with BDO and both parties.

Taken from telegraph.co.uk