Graham Taylor fears for club's future after dramatic AGM (From Watford Observer)

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Former England manager Graham Taylor fears Watford FC may go into administration after Russo brothers call-in loans

3:38am Wednesday 16th December 2009 in WFC in Crisis Photograph of the Author By Frank Smith

Former England manager Graham Taylor fears Watford may go into administration after Russo brothers call-in loans. Picture: Action Images

Watford legend Graham Taylor fears his beloved club will go into administration after the Russo brothers resigned from the board and demanded their £4.88m loan be returned with immediate effect.

Former Hornets chairman Jimmy Russo, his brother and vice chairman Vince and their business colleague Robin Williams stepped down from the board at this evening's AGM of the club's parent company Watford Leisure Plc.

The trio only joined the board at the beginning of this year but decided to step down before they were pushed.

Jimmy Russo accused his fellow board members of attempting to “oust” the trio and was aware major shareholders Lord Michael Ashcroft and former chairman Graham Simpson were planning to vote them off the board any way, as they have a combined shareholding of around 54 per cent.

Once he had announced his resignation, Russo confirmed his company Valley Grown Salads would be demanding the repayment of the £4.88m loaned to Watford with immediate effect.

This means that unless the Hornets' board can find the funding needed, there is a chance the club could go into administration before Christmas.

Taylor was appointed on to the board by the Russos and when they stood down tonight, the club's most successful manager in history became acting chairman for the AGM.

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Watford legend calls for stability

Former England manager Taylor said: “Whatever happens, we are at a very crucial time in this club's future, it goes without saying.

“Now we can all look back and decide who we want to blame for this and say this and that but the reality is that there is not going to be much gained, in fact I can't see anything being gained, if we keep referring back to whatever has happened for whatever reasons.

“I believe in looking forward, I believe this is what it is, this is the reality.

“We have to face up to it, we are threatened with administration and the demand from Jimmy and Vince for their money to be returned will put us into administration. I make no bones about saying that because that is a reality.

“They did put the money into the club and they will have their side of the argument but at the present time, by demanding their secured loans, unless somebody comes to our rescue, we will go into administration.”

On November 26 Valley Grown Salads lent Watford £1m but that will only last until next Tuesday and the Hornets need to raise £5.5m before January.

As recent as October it was hoped this may be done via a rights issue with major shareholder Lord Ashcroft.

However the deputy chairman of the Conservative party was apparently reluctant and negotiations between the different parties stalled.

That was until the Russos made an offer to buy the club, which seemed to reignite discussions between Lord Ashcroft, Simpson and Watford FC – with Russo describing developments as a “100 per cent positive step” on Thursday.

However, the personal problems between the Russos and the other two major shareholders were always going to make negotiations difficult – especially following Simpson's dramatic resignation from the board at last year's EGM.

The Watford Observer understands Lord Ashcroft and Simpson were going to vote the VGS trio off the board regardless tonight, which was one of the reasons why they decided to walk.

When addressing shareholders this evening, Russo said: “You have seen the recent announcement that this company is unable to pay its creditors and if no rescue package has been agreed by the 22nd of December then an administrator will be appointed.

“We have spent nearly a year to get the major shareholders to participate in a funding requirement but with no success.

“We have had to provide funds on three occasions to avoid administration and I don't think anybody in this room can say that both my brother and myself and Valley Grown Salads have not given it our total commitment.

“As 30 per cent shareholders, we do not think that it is right that we should be 100 per cent providers.

“Some six weeks ago we made a formal rescue offer to the board, to which to this day we still have not had a formal reply.

“The major shareholder has repeatedly refused to meet us to hammer out a deal to save the club. The request for a poll vote on the resolution appears to me to be an obvious move to oust VGS members from the board.

“We have therefore all decided to resign as from now. I am really sorry. I am probably as upset as you guys.

“As a consequence, we have now made a formal demand for immediate repayment of our loan.”

Russo did achieve some success as chairman and claimed he had done his best for the club.

He said: “I am not quitting because I am a quitter. When I do something I need the support of everybody around me. I don't want to be doing something and then have knives in my back. I don't need that.

“I will give respect and I need respect back. What the previous regime done is nothing to do with me.

“I took the poison chalice and battered on, done the best I can and that goes for both my brother and myself.”

After the VGS trio stood down, the three remaining board members attending, excluding the absent David Fransen, went for a board meeting for around 15 minutes before returning.

It was then announced Watford legend Taylor would be chairing the meeting and it was clear he was unhappy with the way Russo conducted himself.

Taylor said: “It is a total surprise, the resignation of the three people. It would have been helpful if the board had known about this before the meeting.

“I believe the former chairman is now doing an interview with Sky TV...

“There has been outline proposals from VGS and Fordwat. The board set up a committee under the chairmanship of Stuart Timperley to evaluate the proposals and make recommendations to the board with regards to the way forward – I sat on that committee.

“The board and committee has met to consider but as of yet no decision has been taken.”

Surprisingly the Russos are still keen to purchase the club and a VGS representative told shareholders: “If the group becomes insolvent, everybody loses. The player contracts become liabilities, not valuable assets.

“The club loses ten valuable points. The stadium would have an insolvent tenant so it wouldn't be worth as much in value.

“We wanted to meet Fordwat but they have so far declined to meet us and negotiate a financial package to stabalise the group and that remains the case.

“As a last resort, rather than seek a loss of value through insolvency, Valley Grown Salads is willing to buy the club from Watford Leisure and finance the whole of that £5.5m commitment to preserve it.

“That offer remains on the table but time is running out. Fordwat have representatives here tonight and I would be very happy to meet them after the meeting to see if something can be done to save the club.

“Valley Grown Salads wants to save the club and save Watford.”

Russo called out the representatives of Lord Ashcroft during the AGM but there was no sign of them.

The £4.88m owed to VGS is secured against the Vicarage Road Stadium, which means the Russos could sell the ground if they are not repaid their money.

A few weeks ago Russo said it would be a disaster if Watford did not own their own stadium.

When asked by Sky Sports News afterwards if the ground may now fall into the hands of someone not connected to the club, he replied: “Hopefully not. Hopefully we can find somebody to take over and find somebody who is able to inject the amount of money required and that would be right for the business.”

Despite his bullish actions tonight, Russo seemed emotional as he resigned from the board, saying: “On a personal note, I want to thank everybody who has been really good to me and I appreciate all the nice comments and everything.

“I am genuinely sorry I will not be involved in the future, so thank you.”

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