As is commonly known, Kettering Town FC have for some time, been under immense financial strain due to a number of factors, which has been of particular concern to supporters, staff and suppliers.
The club has refrained from explaining the full circumstances due to a legal threat from the solicitors of former main sponsor DRC Locums:
“…any statements which it makes that our client is in some way to blame for any financial circumstances of KTFCM in circumstances where the only sums claimed from DRC are disputed (and relate to two years ago) would be defamatory and we reserve all DRC’s rights in this regard”.
In light of the above and on the belief that settlement from DRC Locums would be forthcoming, the club chose to remain silent (even though the sums do not solely relate to two years ago and that any detail would not be "defamatory"). However our silence has led to all manner of speculation from supporters, which is undermining the commercial viability of the football club and we feel we are left with no choice but to issue a comprehensive and factual statement:
For several years DRC Locums were a sponsor of Kettering Town Football Club. In December 2009 James Caan’s investment company Hamilton Bradshaw acquired a 45% stake in DRC Locums. On 30th October 2009, it was formally documented by Hamilton Bradshaw that DRC Locums would further sponsor Kettering Town FC the sum of £1,150,000 with payment from 1st December 2009 in 23 equal monthly instalments ending 1st October 2011.
Due to conflict of interest/related party transaction concerns Hamilton Bradshaw insisted they led the management of the paperwork and so the agreement was not formalised and signed until October 2010. The agreement also formally documented £250,000 in sponsorship for the period ending 30th November 2009 resulting in total sponsorship of £1,400,000 (excluding VAT) as follows:
(a) £250,000 for initial sponsorship rights (1st September 2008 to 30th November 2009) payable by 30th November 2009.
(b) £1,000,000 for enhanced sponsorship rights payable in monthly instalments of £50,000 from 1st December 2009.
(c) £150,000 for initial sponsorship rights payable in monthly instalments of £50,000 from August 2011.
Since December 2009, the club has regularly not received payment from DRC Locums, often for several months and the knock-on effect on the lives of our players, staff and local company suppliers, has been devastating. As of today, Kettering Town have not received £421,335.55 as follows:
(a) £48,754.55 (plus VAT) outstanding since 30th November 2009. DRC Locums are withholding payment of this sum claiming that a volunteer Financial Controller wrote off the debt on behalf of KTFC in September 2010 just before leaving KTFC. This argument is absurd for several reasons, not least because the sponsorship agreement was signed a month later.
(b) £222,581 (plus VAT). DRC Locums terminated the sponsorship agreement on 17th March 2011 as per the terms of the contract with KTFC. However the agreement of 30th October 2009 clearly states that the sums are due in full to the club of Imraan Ladak’s discretion and he has confirmed he has not indicated any intention of diverting the sums to another football club.
(c) £150,000 (plus VAT). This sum relates to the two televised games against Leeds United FC in the FA Cup. DRC Locums are claiming that this sum was a “typo” and actually relates to 2011/12 “final sponsorship rights” which DRC chose not to proceed with. It is absurd to suggest that shirt sponsorship for 2011/12 would be reduced by 75% from the previous 20 months or that such a “typo” would have been made by to the sports lawyers that Hamilton Bradshaw used or indeed overlooked by Hamilton Bradshaw or DRC Locums at the time.
DRC Locums are fully aware that by disputing outstanding sponsorship monies, KTFC will have to issue high court proceedings which are expensive and heard in the distant future, rather than the simple statutory demand and winding up order which would force timely payment. It is entirely possible that such a delay would potentially bankrupt the football club.
It has been brought to KTFC’s attention that our club are not the only party significantly affected by a refusal to follow through with contractual agreements.
KTFC have been working for several months to resolve the matter amicably and without negative publicity for DRC Locums, partly in the hope this would assist ongoing discussions.
KTFC has been forced to sell or release several assets in the form of players over recent months, delay salary payments and let good employees/contractors leave due to the cashflow shortfall. The club have also been in discussions with three separate parties (with an additional fourth enquiry received very recently) in relation to either investment or share sale to cover the shortfall created by outstanding sponsorship monies and to ensure the club survives.
In the interim, directors of KTFC and their family have been covering ongoing liabilities in the form of further loans to the football club. No funds have been injected from other parties.
One party has made their interest in acquiring KTFC and some specific terms public (without mentioning an impossible deadline of one night to hand the club over). KTFC has been working on finalising a net asset position as of the date of this offer and a clarification meeting on this matter is planned for early January. An earlier meeting was cancelled at very short notice due to an unplanned “without prejudice” meeting with DRC where a settlement was discussed with a sameday deadline. The current shareholders are convinced that this party has the sole interests of KTFC at heart. However the shareholders have a duty to all parties to investigate all options including options which could be even more beneficial to the football club.
Other parties have requested that their interest is kept confidential. However we can confirm that the NLP story published today is inaccurate. KTFC is surprised that the NLP chose not to contact KTFC to clarify the story when they have been calling regularly for updates which the club has been providing without hesitation.
KTFC is disappointed to learn that an ex board member has for some time been using the clubs internet supporter forum to spread malicious falsehoods about the football club, shareholders and accounts. It is noteworthy that the ex-board member has gone to the effort of creating and posting these rumours via extra user accounts rather than his own.
KTFC can also confirm that none of the shareholders are using any proceeds from the Luton Town game to repay their loans to KTFC and the proceeds have for some time been committed to other creditors including the landlord, staff, players and matchday costs. The club and potential investors are not considering any form of change to the name of Kettering Town FC.
Whilst the club understands that supporters are rightfully concerned and frustrated with the current situation KTFC finds itself in, it is equally important that supporters understand that the club must be very careful not to prejudice its position by discussing commercially sensitive information in the public domain. Although this statement is detailed, there is much more the club is choosing not to say at this time, which would be of significant interest.
The club does not believe it is has breached the terms of the tenancy agreement at Rockingham Road and will issue a full statement in relation to this matter in due course.