CITY FACING A 10?POINT DEDUCTION.
THE Sky Blues could be heading for a ten-point deduction this season after Ricoh Arena bosses dropped their High Court action yesterday.
During a hearing in London, Mrs Justice Proudman heard the football club owed PS60 million to creditors.
Some PS8.4 million of that is owed to Cayman Island hedge fund Arvo. The bulk of the rest is believed to be owed to funds related to Sky Blues owners Sisu.
Arena Coventry Ltd lawyers asked the judge to dismiss ACL's application for an administration order against Coventry City Football Club Ltd.
After an adjournment the judge agreed to do that late yesterday afternoon.
It means ACL accepts that Paul Appleton, the administrator appointed last Thursday by Sky Blues hedge fund owners Sisu/Arvo should remain, rather than another administrator ACL had preferred.
The judge also accepted ACL's call for a further probe of both companies and their assets to be presented to the court at a later date. This is likely to happen in about six weeks time.
The court also heard a dispute over who pays legal costs.
Adam Goodison, barrister for Mr Appleton, said that creditor liabilities made it a ''catastrophic insolvency''.
Speaking outside court, ACL lawyer James Powell told the Telegraph the stadium firm - owned by Coventry City Council and the Alan Edward Higgs Charity - would keep a keen eye on the club's administrator to ''ensure it discharged its duties correctly''.
He argued that would include looking favourably on any prospective purchaser to take over the football club to bring "stability", and ensure its future.
Mr Powell denied ending ACL's attempt to have its chosen alternative administrator appointed to run CCFC Ltd had handed the whiphand to Sisu.
He said the High Court adjournment granted last Friday had enabled confirmation that the Sky Blues' crucial "golden shares" with the Football League and Football Association rested with CCFC Ltd, the company now in administration.
He claimed it confirmed the golden shares were not with the club's trading arm Coventry City Football Club (Holdings) Ltd, as the club appears to claim.
Mr Powell said ACL believes it means the whole club is already in administration. Mr Powell said: "We had a letter from the Football League confirming the share is with Coventry City FC Ltd. The FA also confirmed the FA share is with Coventry City FC Ltd.
"That company is in administration, with an administrator appointed by Joy Sepalla. "We held off our application for a few days to get to the bottom of key issues including Football League shares. We're grateful to the Football League "There were inconsistencies in statements from the club. It's clear to us the whole club is in administration.
"Coventry City FC Ltd is not a non-operating subsidiary as the club claims. The club exists where Football League and FA shares rest, with CCFC Ltd.
"We'll keep a keen eye on the administrator appointed by Arvo, which is SISU and Joy Sepalla "Our focus shifts onto this administrator doing a good job. Administration gives the best opportunity to find a prospective purchaser to buy the club."
All eyes are now on the Football League to see if it now accepts the club is in administration and whether it deducts 10 points from their promotion push.
Yesterday's events left many fans bewildered as to whether the club as a whole is in administration. One arm of the club CCFC Ltd is now indisputably in administration. But CCFC Holdings Ltd is not and is still owned by Sisu or its linked Cayman Islands hedge fund Arvo.
Tim Fisher, CEO of Coventry City FC, said: "I hope all parties will now focus on reestablishing a constructive dialogue for the good of the club and football in Coventry. We would like to ensure that Coventry City Football Club can, in the first instance, continue to play its remaining home matches this season at the Ricoh Arena."