Two things that will affect Sheffield Wednesday takeover bidder selection process - it's been confirmed | OneFootball

Administrator Kris Wigfield's last statement regarding the sale confirmed two key matters that need to be resolved as a result of the bidding process.

Sheffield Wednesday's administrators are still sifting through the bids that they've received to buy the club, and there are two key conditions that need to be met which have been mentioned in their last statement.

The moment at which the decision is announced, but for now the identity of the new owners remains up in the air. There was substantial interest in buying Sheffield Wednesday, when the club was put into administration on the 24th October, and this means that the decision over confirming the club's new owners hasn't come through as quickly as might have been expected.

EFL rules mean that clubs have to be advertised for sale for 28 days before they can actually be sold, and it's clear that Begbie's Traynor, the insolvency firm dealing with the administrators, are more concerned with making the right decision than a quick one. With the next truly significant date for any new owner of the club being the opening of the January transfer window, there was no need to rush into anything.

And in their last weekly statement released on the 5th December, administrator Kris Wigfield has clarified two key conditions that have to be met, in order for them to meet their obligations.

Administrators' latest statement confirms two key criteria for Sheffield Wednesday sale to proceed

The statement issued on the 5th December, mentioned two key conditions were detailed as being "critical" for a sale of Sheffield Wednesday to proceed. Firstly, Wigfield explained, the administrators are required to "maximise returns to creditors". Insolvency practitioners are required by law to prioritise the best interests of creditors and to ensure that they get the maximum return possible from the sale of the club. This can get extremely complex, as not all creditors are created equal.

The second key condition is to "secure the right long-term owner for Sheffield Wednesday". This essentially means that, of the available options - and the different bidders will have different visions of how they intend to move the club forward, should they be successful - they should be looking for a new owner who will move Sheffield Wednesday forward as a business. The administrators will need to use their experience to assess which of them can provide a true reset for the club.

These two key Sheffield Wednesday conditions are a balancing act for the administrators that are enshrined in law

Ultimately, the aim of the administrators should be to hit a sweet spot between ensuring that returns are maximised for creditors while the club is given the best opportunity of being moved forward successfully as a business once the sale has been completed.

It is a legal requirement for insolvency practitioners to do this. Since the Insolvency Act 1986 first introduced the administration process, this has been paramount in what they have to do. Secured creditors - those with debts that are secured against property, most usually - will have to be paid in full. Under the rules of football's governing bodies, football creditors - those within the game who are owed money by the club concerned - are also safe.

But for unsecured creditors, it can be a different matter. The insolvency process requires the administrators to hold a creditors' vote on the Company Voluntary Arrangement (CVA) that is proposed as part of the sale, in which votes are weighted by how much they're owed. If the vote is passed, the sale can proceed. If it isn't, it's back to the drawing board, and unsecured creditors should be able to trust that the administrators are making the best offer to them that it's possible to make.

This is reflected in the EFL's rules. They require offers to unsecured creditors to be for a minimum of 25p in the pound for what they're owed or face a 15-point deduction at the start of the following season. Wednesday's administrators have already confirmed that there should be no problem with them hitting this threshold.

This is what was somewhat surprising about Simon Jordan's claims that he withdrew from an interest in getting involved at Sheffield Wednesday on account of not wanting Dejphon Chansiri to get paid from the administration process.

In a sense, this is entirely understandable. It's difficult to find many people in English football who like what Chansiri did to Sheffield Wednesday. But Jordan surely knows fully well that Chansiri is a creditor, and that the rights and wrongs of how he ran the club are not relevant to this from a legal perspective, so long as he has acted within the law. The interests of creditors have to be taken into account, regardless of whether anyone likes what they did or not.

The second element to this is to "secure the right long-term owner for Sheffield Wednesday". In theory, it could be possible for the administrators to sell Sheffield Wednesday to someone whose plans amount to little more than folding the club, razing Hillsborough to the ground and building flats on the land. In a strict business sense, this might even be the most profitable option for a new owner of a football club.

But this clearly wouldn't be "the right long-term owner for Sheffield Wednesday". Football clubs aren't just businesses. They're important cornerstones of their communities which mean the world to thousands of people, and this undeniable characteristic means that the "right long-term owner" means something different for a football club in comparison with what it might for most other businesses.

Sheffield Wednesday fans should be glad that the administrators are taking their time over this decision. It would be very easy for them to rush something through without paying due attention to their obligations with regard to this particular balancing act.

At the heart of this balancing act is an inherent contradiction. On one hand, the club's creditors expect to be paid and have their losses minimised, but on the other, new owners of the club won't want to be settling the debts of a previous regime when they could be spending that same money on renovating the stadium or refreshing the first-team squad.

But insolvency law in this country recognises that contradiction. Any alternative to administration involves the winding up of the business and the liquidation of its assets, and that tends to benefit neither creditors nor the business itself. That the administrators are taking both sides of this coin extremely seriously should gladden Sheffield Wednesday fans, even if it means that it might take a little longer for that big announcement to be made.