November 9 – The crippling debt crisis that has plagued the Trinidad and Tobago FA (TTFA) took another turn yesterday with the TTFA seeking protection from outstanding litigation via the islands’ bankruptcy and insolvency laws.
A number of claims against the TTFA had now progressed through the courts to the point where the TTFA was getting dangerously close to being wound up. The court filing yesterday (November 8) automatically stops further progression of those cases.
The TTFA in a statement said it had “notified the Supervisor of Insolvency of its intent to make a Proposal under the Bankruptcy and Insolvency Act of Trinidad and Tobago which will enable a structured approach to the restructuring of the TTFA and the preparation of a fair, transparent and acceptable payment proposal to address the TTFA’s debt.”
Already under the control of a FIFA-appointed Normalisation Committee (NC), a trustee has now been appointed – Maria Daniel – in a bid to negotiate a debt repayment proposal.
The court filing stays any legal action for up to six months and will secure the TTFA’s assets while the trustee works with the NC to find a debt repayment proposal that can be put before the creditors.
The biggest issue facing the TTFA and now Daniel, will be working out how much debt the TTFA is liable for. An Ernst & Young report, dated April 9, 2021, pegged the debt at about TT$98.5 million ($14.5 million). However, that amount is disputed by former presidents of the TTFA who argue that a more realistic figure is about TT$58 million and perhaps even less.
The independent trustee’s work will include verifying the claims against the TTFA, meeting with creditors and the development of a debt repayment proposal. The process will be frustrating for many creditors who have legitimate claims filed and who have been waiting for more than two years for settlement.
The size of the settlement will ultimately depend on the assets that the TTFA has. The TTFA said an independent third-party valuation will determine that figure and that “the sale of the Home of Football is definitely an option.”
The TTFA said that its day-to-day management would be unaffected by the process and emphasized that it is “not being dissolved; the organization will continue to operate normally under the supervision of the NC while the Trustee meets with creditors to validate their claims and develops a payment proposal to settle the TTFA’s outstanding debt. This process will allow the NC to build the foundation for the rehabilitation of the TTFA.”
Part of the mandate of the NC and its chairman Robert Hadad when appointed in March 2020 was to “establish a debt repayment plan that is implementable by the TTFA”. Having failed to achieve that – or even come close – the near-nuclear action of turning to the country’s insolvency laws has been taken.
Hadad said: “The TTFA is currently hamstrung with debt, and we can’t allow past mismanagement and poor governance to cripple the future of football or indeed its daily operations. This option, under the supervision of the Supervisor of Insolvency, the Trustee and the courts, ensures transparency, equity and independence in the process while, at the same time, ensuring that our current subventions are used for the day-to-day running of the TTFA and its present and future needs. The intent is to rehabilitate as opposed to dissolve the TTFA with a view to preserving continuity and the development of football in Trinidad and Tobago for future generations.”
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