At a press conference this afternoon, Chairman David Sheepshanks gave full details of the Club's bid to achieve a Company Voluntary Arrangement. Here is his statement in full:

"The Board of Directors have most reluctantly today applied to the High Court in London to file for Administration with a view to achieving a Company Voluntary Arrangement (CVA). This is a statutory process being undertaken to secure the future of the Club and in order to give protection to the Club while we endeavour to reach a CVA with our creditors.

It is the Administrator's intention for this process to be undertaken as soon as practicable, in a period estimated to last between four and eight weeks.

The Administrators will be Nick Dargan and Nick Edwards of Deloitte & Touche and they will be working in close conjunction with the Board and Management of the Club. The scope and terms of the Administration Order that has been granted are limited such that the Administrators' primary objective is to conclude a satisfactory CVA with all creditors.

We have sought strenuously to avoid this eventuality by all reasonable means. However, in the end, it has proved impossible to cope with the immense financial burden caused by relegation from the Premiership and what followed. If we had not taken this action, painful though it is, we would have been acting unlawfully in continuing to trade.

Ultimately we have simply not been able to cope with the net loss of some £15 million of income caused by relegation and the almost immediate collapse of the transfer market that has prevented us from trading players to 'right the ship' on a scale that would previously have been possible. The demise of ITV Digital (removing a further approximate £2.5 million in income from each Division One Club this season) and the introduction of new transfer windows only served to exacerbate our problems.

We have, in the end, been beaten by circumstances utterly beyond our control. The sheer scale of the gap between Premiership and First Division income and cost bases has proved unbridgeable in the current depressed state of the market, even for a Club like ourselves which had such a healthy economy in the Premier League.

As a point of clarification, the building of the two new stands are not major causes of our difficulties. The 25-year bond is a perfectly proper way of financing these and in isolation the payments are affordable even in Division One.

We have always tried to be open with fans and have many times, including at the last Annual General Meeting, warned of the dire effects of relegation. It has been a constant and onerous uphill battle ever since last summer as we have fought to manage and avoid this outcome in increasingly adverse conditions. Despite careful husbandry, without which we would have been unable to survive even until now, the closing of the transfer window in January without a second significant sale has effectively sealed our fate.

We deeply regret this action and the pain that will be felt by our creditors and suppliers, including many that are local and of long standing. If there had been a better alternative we would surely have taken it.

In particular we have considered seeking outside investment by way of a share or loan stock issue, as is well known, but we have been advised by lawyers that our current financial predicament and the risks associated with such investment make it impossible for the time being. Once the arrangement is ratified by Creditors, as we hope it will be, then the Board will look to attract further investment when the Club will be on a much sounder footing and there will be less risk associated with such investment.

As Directors we have chosen this particular route as being the least unpalatable and the most beneficial course of action for creditors. It is our wish to structure a deal for creditors that enables them to begin to recover some outstanding debts in a way that is linked to the Club's future success.

In contrast, if the Club were to go into an Administration that involved a sale of the assets and a change of control (as for example has been the case at other football clubs) then the Unsecured Creditors may not expect to receive anything.

The Directors have a clear legal responsibility to protect the interests of all creditors, which we have sought to do within the confines of propriety.

It is also, of course, our absolute responsibility to guard and protect the livelihood and future of this Football Club, for shareholders, employees, supporters, stakeholders, the people of Ipswich and our Community at large, which this action is also designed to accomplish.

I wish to make clear that this path has been chosen solely by the Directors of the Club and not by the Banks or the Bondholder. All have been supportive throughout an intensely difficult period and they remain supportive of this Board and Management to lead and effect a recovery. The Directors have concluded it is the best way forward for Creditors and Shareholders alike.

The Directors have agonised over the plight of our suppliers and creditors who may suffer as a result of this Administration, although hopefully only in the short term. The only comfort we can offer them all is that firstly by this route they do have an opportunity eventually to recover some losses and also that the Club should now be more soundly stabilised and that they have the opportunity to continue trading profitably with us. After the initial shock I hope that creditors will feel able to support the CVA both for themselves and for the future of the Club. Providing the CVA is successful, this will preserve the rights of season ticket holders.

Historically, last summer we concluded sales of Titus Bramble and Marcus Stewart and season long loans for Matteo Sereni and Ulrich Le Pen, however further sales proved unattainable. We also agreed transfers for Herman Hreidarsson and Matt Holland for additional combined fees and wage savings to the Club generating a further £9 million and subsequently loan deals, with a view to permanent arrangements, for Marcus Bent and Martijn Reuser. These were all declined by the individuals who showed their belief in the Club by preferring to stay and fight for promotion.

Nonetheless, the consequence of this is that the Club has been left without transfer income accruing to such deals while still being required to bear the ongoing cost of the players' contracts since that time. Had these deals, or most of them, gone through then it is a fact that the Club would have redressed most of the relegation shortfall in income and today's situation would not have occurred.

I must emphasise that in no way do I, or the Board, attach any responsibility towards the individuals concerned, as they were free and fair decisions that they had to make for themselves and their families. From a playing perspective, we have the advantage of still retaining their services.

In view of the moves not being completed when the transfer window closed on August 31 for the first time, the Club immediately introduced a range of austerity measures to cut costs further, including being the first leading club in England, to my knowledge, to ask staff and players to accept voluntary pay deferrals to assist our cash flow.

With a full Premiership squad virtually intact, our shared expectations along with all supporters were for a successful season in Division One. We made a bad start. As a result, commercial and retail income dropped and we had to introduce further cuts on January 2nd, which included the making of 18 staff redundant across all levels of seniority and the non-replacement of five others who left voluntarily.

In the January transfer window, we reluctantly sold Jamie Clapham to Birmingham. We have negotiated and sought to conclude every transfer offer for a player made to us.

Furthermore, throughout this season we have cut costs by agreeing terminations and free transfers for Keith Branagan, Amir Karic, Wayne Brown, Richard Logan, Justin Miller and Darren Kelly. Discussions are ongoing with Finidi George.

Understandably there will always be those who look to apportion blame. As appointed Directors of this Club we do not seek to avoid the issue. Having finished fifth in the Premiership and won a place in Europe and being led by the Manager of the Year, the Board provided him with funds to strengthen the squad in our efforts to underpin our Premiership status. It was neither a case of over ambition, nor lack of ambition.

These were investments that our Manager wanted to make and which we could afford in the Premiership, borne out by the healthy operating profit that we recorded even last year in our relegation season. In common with other clubs, and acting on past experience, we believed that in the event of relegation we could sell players to retrieve any losses. Relegation was nevertheless not a likely prospect at that time as we looked to build on George Burley's and the team's tremendous achievements.

The Board of Directors, and particularly I as Chairman, accept full responsibility for those judgements, which were at the time, as in all our decisions, before and now, made only with the best interests of the Club at heart. I must add though, that even with hindsight, given the same circumstances as at that time, I doubt whether the Board would have deprived the

Manager of the day with funds for new players of his choice to consolidate Premier League status.

In summary, I believe that the Directors have acted responsibly in unprecedented and extremely difficult circumstances. What is crucial now is that this plan works. Providing Creditors vote to support it, then the Club will be in a much-improved trading position.

Although we would have preferred an active transfer market that could have allowed us to avoid taking this action, as matters have transpired the team is still largely intact and fans will of course be pleased about that. The only positive point for us concerning the Transfer deadline on January 31st is that we know that the dressing room and the squad are together and united for the remainder of the season. We have one of the strongest and probably the most talented squad in the Division, with a very successful Academy beneath it, and we must make all this count where it matters most, on the field of play. Joe Royle's leadership has now restored the spirit to the squad and in him we have a man capable of leading us back to the Premiership be it this season or beyond.

However our plans for recovery are not formulated on a miracle cure and in the event that we do remain in Division One we must ensure a sound financial footing and stability in this Division, which irrespective of this move today, will necessitate further reductions in our wage bill in order to balance income and costs.

Nevertheless a concerted push for the play-offs and promotion does now look possible, even this season, and clearly this would be the ultimate solution to our plight.
Today's grim news will come as a terrible shock to most but, to conclude I want in particular to address our fans.

The crux of this move to seek the protection of Administration is first and foremost to ensure a secure future for the Club, not the reverse, as some people may associate with such an announcement. It is, or course, equally to agree a formula for payments to our creditors as best we are able.

Put simply it has been caused by a culmination of the effects of relegation and the collapse of the market. It was not inevitable, but became so when we couldn't complete player sales.
On a personal note it has been an intense nine-month struggle to avoid this happening today - as I have said before we could not possibly have been relegated at a worse time. We have lost this battle - but not the war to restore the Club to better fortunes. No fans should underestimate how hard it may be, in fact I can't think of a time that the Club has had the odds stacked against it in such a way. But it all begins and ends with what happens on that football field. After an utterly dismal time for most of 2002, Saturday's performance showed just what we are made of and how the spirit is now restored and burning bright under Joe Royle's leadership.

The very best way to address our situation is to stick together, continue to support the Club to the hilt, like on Saturday, and adopt a siege mentality that Ipswich Town Football Club is ours, a Club to be proud of and that we will prevail.

I have already said at the AGM in December that I feel responsible for everything that goes on here, whether it is under my control or not. Given the continued support of colleagues, the Bank, shareholders and supporters I will do everything that I can to lead the Club through this difficult process and back to safety.

Finally I don't mean this to sound like sour grapes, but I shall also continue to make the case for action to be taken by the leaders in the professional game to tackle the huge monetary gap between the Premiership and the First Division, which is still increasing. The parachute system has become hopelessly inadequate in this new market place and I fear that just increasing the parachute payments will be to merely paper over the cracks of an unsustainable two speed economy, leading to further distortion of competition.

That there will be pain associated with relegation, nobody could deny, but if your economy was sound in the Premiership, as ours was, for the penalty to be financial ruin cannot be right. We can only hope that our fate may provoke a meaningful debate."

Photo: Action Images

Ipswich Town Polls