Hearts lawyer talks over SPL point deduction fear

Hearts will discuss options with lawyers in a bid to prevent a points deduction. Picture: SNS
Hearts will discuss options with lawyers in a bid to prevent a points deduction. Picture: SNS
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HEARTS officials today consulted lawyers in preparation to fight any points deduction by the Scottish Premier League.

Parent company Ukio Bankas Investment Group (UBIG) has applied for insolvency in Lithuania, which could mean a 17-point penalty and subsequent relegation for Hearts as per league rules.

SPL directors have also sought legal advice on the matter in an attempt to decide whether UBIG effectively declaring themselves bankrupt merits punishing the Tynecastle side for breaking their rules. UBIG own 79 per cent of Hearts’ shares and are owed £10million by the club. Hearts are also £15m in debt to Ukio Bankas, which has also been declared insolvent.

Hearts will appeal any sanction by the SPL on the basis that they are no longer funded by UBIG. A hefty points deduction before the end of the season would leave them bottom of the league and relegated to the First Division, thus preserving Dundee’s status in the top flight. The SPL could also decide to wait until the end of the season and consider their judgment before punishing Hearts retrospectively, should they decide that UBIG’s application for insolvency constitutes an “insolvency event” at the club.

League officials were poring over their rules this morning and will await any further development in Lithuania today before considering what course of action to take. Lawyers are already working on Hearts’ behalf in case they are required to battle against a points deduction.

A source close to the Edinburgh club said: “The club remains confident that no sanctions would be appropriate given that the club has been operating independently of UBIG since early 2012. For that reason, there would be 
no need or appropriateness for any sanction to be levelled against Hearts for events taking place in Lithuania.”

Should the SPL decide to punish Hearts for an insolvency event which takes place after the end of this season – i.e. if UBIG is officially declared bankrupt next week or thereafter – then they would start next season in the SPL but with a points deduction based on this season’s final total.

Rule A6.12 of the SPL rules states: “...all references to a Club taking, suffering or being subject to an Insolvency Event and/or an Insolvency Process as well as including the owner and operator of a Club taking, suffering or being subject to an Insolvency Event and/or an Insolvency Process shall, if the Board so determines having regard to (i) the need to protect the integrity and continuity of the League; (ii) the reputation of the League; and (iii) the relationship between such owner and operator and the Group Undertaking concerned, also include any Group Undertaking of such an owner and operator taking, suffering or being subject to an Insolvency Event and/or an Insolvency Process.”

Meanwhile, fans groups hope to make a formal bid to take over Hearts within the next few weeks and Edinburgh South Labour MP Ian Murray, who is leading the buy-out effort, said he does not believe latest developments with parent company UBIG make any significant difference to their plans.

He said: “We have got a company here, UBIG, which is essentially bust and everyone knows that. The process for them to deal with that is up to the Lithuanian authorities.”

He said a fans’ meeting held last night had been planned long before yesterday’s developments concerning UBIG.

He said: “We were just moving ahead as quickly as we can with getting a bid together and we are making significant progress. We will be in a position within weeks to formalise a bid for the club.”

Mr Murray said the SPL rules on what should happen to clubs whose owners become insolvent are “vague”.

He said: “Any uncertainty is worrying for fans, but I hope to turn that anxiety into a opportunity and I would urge fans to go on to the Foundation of Hearts website and make a pledge.”