Brendan Flood was forced to resign from the board, while the Club has rebuffed media speculation over potential Russian investment.
Flood has an Individual Voluntary Arrangement (IVA) and this prevents him from sitting on the board of a Football League club under its Fit and Proper Person Test.
The IVA was taken out on February 29th 2012 and remains current, according to the Individual Insolvency Register.
An IVA is typically used by individuals in financial difficulty to avoid entering bankruptcy and helps them to repay their debts.
The Football League’s Fit and Proper Person Test says: “A person shall be disqualified from acting as a director and no club shall be permitted to have any person acting as a director of that club if he makes an Individual Voluntary Arrangement or becomes the subject of an Interim Bankruptcy Restriction Order, a Bankruptcy Restriction Order or a Bankruptcy Order.”
The revelation that Flood did not step down from the board for personal reasons as he initially claimed, rather that he was forced to resign due to Football League regulations, came from an official Club statement released out of the blue today.
A report in today’s Burnley Express newspaper said talks between the Club and unnamed Russian investors were continuing, but this has been disputed by the Club. The Burnley Express previously ran a story about potential Russian investment – quoting former director John Sullivan – and the Club ignored it, releasing no statement, other than on Twitter.
Sullivan has been keeping the newspaper updated on the progress of the talks. He said: “The Russians are still interested in talking but we had the setback of director Brendan leaving the club and we are now waiting for the ground buy-back to be completed in the close season and then hopefully things will move forward.
“Both chairmen will be involved in the negotiations and if and when something happens it will be in the close season. They are also keen for fans to know that any capital injection into the club will only be as a commercial venture and there are no plans for a complete takeover.”
But in a sensational move, the Club has rebuffed the story this afternoon and stated Sullivan is not acting with the backing of the board of directors, including co-chairmen Mike Garlick and John Banaszkiewicz.
Garlick issued the following statement: “Neither myself, co-chairman John Banaszkiewicz, or fellow directors Barry Kilby and Clive Holt, have had any scheduled negotiations with Russian investors regarding potential investment in Burnley Football Club.
“Mr John Sullivan is currently an Associate Director of Burnley Football Club until May 2013, when this role will cease.
“The football club has not retained John in any capacity to act for the club with regards to securing any new investment.
“The Club cannot comment on the involvement of Mr Brendan Flood in any negotiations as he is not permitted to be a director of Burnley Football Club due to Football League regulations.”
Despite the contents of the rest of the statement, Garlick left the door open to investors by adding: “In closing, Burnley Football Club is always open for new investment, provided that it meets the vision of the Board of Directors, is of a ‘fit and proper’ nature, has the club’s best interests at heart and can genuinely assist us in achieving our ultimate aim of gaining promotion back to the Premier League.”
No Nay Never spoke exclusively to Brendan Flood this evening and the former operational director confirmed his IVA was the reason behind him leaving the board, but stressed he could have appealed to the Football League to remain a director and chose not to.
Flood repeated his earlier comments about desiring a rest from football activities to recuperate from the problems he has had with his businesses since the global financial downturn.
Brendan was upset and confused by the Club’s decision to involve him in the release of the statement and claimed not to be in regular contact with Sullivan regarding any potential overseas investment, despite the Club’s statement appearing to imply they were working together on the matter(*).
Flood’s IVA runs out this month and he told NNN he will be considering a return to the board in the near future.
But he stressed “changes at board level” will be required in order for him to be involved again. Flood’s shareholding is unaffected by him leaving the board and he also explained he feels there is currently a lack of leadership at the Club. But Flood does not have a desire to be chairman of Burnley Football Club.
Flood sang the praises of former chairman Barry Kilby – who is currently successfully recovering from an operation – and stated he believes John B has the best interests of the Club at heart.
However, it is obvious there are clear divisions between Flood and the other two board members – Garlick and long-serving Clive Holt – as recently referred to by former chief executive Paul Fletcher when we recently interviewed him.
Fletcher told NNN: “Make no mistake, Brendan Flood was the director who got Burnley Football Club promoted and he did it with some opposition in the boardroom.”In a revealing chat to promote his book Magical: A Life in Football, he added: “It was through the decisions that he made that he brought the momentum and it was the calculated gamble he took that led the Club to the Premier League. Without Brendan’s calculated gambles, we wouldn’t have got anywhere near the Premier League.“There were some people on the board who just wanted to have their four-course meal and red wine every Saturday and didn’t want the risks that would put us in the Premier League position.
“He was the one out there making the tough decisions and it was the calculated risk which we had to do, otherwise you end up mid-table every year and you think you’re making the fans happy and I don’t think so, I think that because of the calculated gamble Brendan did he made Burnley fans very, very happy.”
Flood told us he agrees with fans who have suggested there is a lack of belief around the Club at the moment and suggested he would be seeking to bring new investment to Turf Moor and has held informal talks with friends about putting money in.
The prospect of Flood leading a consortium of new investors and John Banaszkiewicz remaining chairman, was mooted, but he repeated: “A change at board level would have to happen for me to be involved.”
With Kilby stepping down as chairman to fight cancer in February 2012, the board has already seen some major changes in recent months.
Garlick and Banaszkiewicz were installed as co-chairman and it wasn’t long before Flood stepped down from the board, citing personal reasons for the decision.
Flood’s potential return as a director could see new blood added to the board sooner rather than later, but it appears likely there would have to be resignations from existing directors for him to consider a comeback.
He was a divisive figure during his time at Turf Moor, though many fans were upset by his departure from the board when it came earlier in the year.
In terms of the Russian investment, the likelihood of this happening seems to have been dismissed by the Club, in particular by co-chairman Garlick, today.
Fans will have to make their own minds up why Garlick elected to haul Flood into the row and what his motives were for that decision.
Flood stressed to NNN that his love for the Club has not dimmed and he wants to do all he can to provide the momentum required to take Burnley forward.
It promises to be an interesting summer once the action on the pitch stops next month.
*The Club’s media manager has since claimed there is no implication of a link between Sullivan and Flood in the statement.
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