What Dejphon Chansiri can do to stop Sheffield Wednesday points deduction | OneFootball

The EFL have rejected Wednesday's appeals for clemency over a 15-point deduction for next season, but there's still one - albeit unlikely - way out.

Sheffield Wednesday are heading for a 15-point deduction in League One next season, but there is still one potential route out of this, if they can somehow persuade their former owner of its benefits.

As the Owls tumble into League One, the club's long-term future still hasn't been secured. It's now been almost six months since Wednesday collapsed into administration, but the sale of the club still hasn't been completed and concerns over whether the club can continue will remain until everything is signed and sealed.

The road to where the club are today is tortuously complex. A preferred bidder was named on Christmas Eve, in the form of a consortium headed by the professional gambler James Bord.

This bid was substantially higher than any of the others, and enough to settle an EFL rule that creditors have to be offered a 25p in the pound dividend from the administration process or face a 15-point deduction for the following season. But the Bord bid collapsed at the end February.

Fortunately for Wednesday, there were other bidders ready and waiting for them. Less fortunately, though, none of them have been prepared to offer an amount that will satisfy that 25p rule.

The second preferred bidder for the club was confirmed as Arise Capital, a group put together by the American businessman David Storch.

But now, a statement from Storch has lifted the lid on what has been going on at the club since then, which highlights the ongoing role of the club's former owner, Dejphon Chansiri.

David Storch statement exposes Chansiri intransigence over Sheffield Wednesday's direction

The Sheffield Star have reported on this ongoing crisis, and it is clear that Chansiri still holds huge sway over the future of the direction of Sheffield Wednesday.

The majority of Wednesday's debt is owed to him on account of loans that he put into the club over his period of ownership, and as the biggest single creditor he effectively holds a casting vote over any agreement reached with the administrators, the insolvency firm Begbies Traynor.

Storch's statement lays bare Chansiri's intransigence over the future of the club. He confirms that the club's soon-to-be former owner "has not agreed to write down or restructure that debt" in spite of "repeated attempts, through the administrators, to engage with Mr. Chansiri in order to find a constructive resolution".

Seeking to get Chansiri to reduce his claim could get the club over that 25p threshold. He can't be made to do so, but if his claim is reduced and the Storch bid remains the same, then the club could get over that threshold.

Storch has confirmed that his consortium "have now been informed that a 15-point penalty is set to be imposed at the start of next season" and that they wholeheartedly disagree with the EFL's decision.

The only route which escapes a 15-point deduction requires the club's former owner to make this fundamental concession, but there has been no indication that he's prepared to do this.

Dejphon Chansiri's silence on this subject speaks louder than words

The 25p in the pound - or 35p in the pound if it's to be paid over three years - rule was introduced by the EFL in 2015, at the same time that the standard points deduction for entering into administration was increased from 10 points to 12.

It was introduced against background of growing disquiet at the number of clubs that had become insolvent since the turn of the century and the effect that this was having on the game.

While those owed millions tend to grab the headlines at such times, the effect on smaller businesses and contractors could be horrific, and there was a widespread perception that football clubs were gaming the system by entering administration, only for paltry offers to be made to unsecured creditors.

It also made for terrible PR for the League. When Portsmouth collapsed into administration in 2010, for example, national headlines were made by the fact that St John's Ambulance, who provide a vital match day service at many clubs, had to submit a claim for £2,702 and only ended up receiving £540 for their troubles, or 20p in the pound. When Plymouth Argyle collapsed in 2011, unsecured creditors received less than a penny in the pound.

But Dejphon Chansiri cannot be forced to reduce the balance of his claim.

There's a strong argument for saying that, given that Sheffield Wednesday's eventual fate was his ultimate responsibility, he shouldn't receive a penny back, but the simple fact of the matter is that this isn't how insolvency law works.

One of the key principles of this area of law is known as 'pari passu', that all creditors or claimants should be treated equally without preference, in terms of the distribution of assets or payments following an insolvency event.

This can be difficult to administer at the best of times. HMRC lost a high-profile case against the Football League in relation to the football creditors rule (which requires that football clubs must, in the event of insolvency, be paid in full) in 2012.

But it remains the case that insolvency law makes little provision for how a business spent its money to get into such a desperate position in the first place. Chansiri's claim is, to the best of anyone's knowledge, entirely legal.

The James Bord bid for the club was so high that it comfortably passed that test, but neither the Arise bid or that made by their competitor, Mike Ashley, did.

Both Arise and Ashley were fully aware of this rule before making their bids, so it may be reasonably assumed that Arise worked out that their best option would be to bid lower and then seek clemency from the EFL, while also reaching out to Chansiri to see whether he would reduce his claim so that their bid for the club exceeded that 25p threshold.

The fact that he doesn't even seem to have responded to those messages, it might be reflected, speaks volumes for Chansiri himself, in terms of putting his own narrow self-interest over the future health and stability of the football club that he ran into the ground over a period of ten years.

His silence, in this respect, speaks louder than words, and those who may end up paying the heaviest price for it will be Sheffield Wednesday's supporters themselves.