In the United Kingdom, football clubs sometimes choose to enter administration (sanction) when they are unable to pay off outstanding debts.
[5][6] Before the implementation of a points deduction it was perceived that clubs had "manipulated and abused [administration] as a way of shedding debts then restructuring, and borrowing again once the hapless creditors had been fobbed off with their 8p in the pound".
[11][12] The League also adopted rules that prevented any side from being in administration for either two successive seasons or eighteen consecutive months.
[13] Leeds United filed for administration with only a few days remaining in the 2006–07 season, which automatically triggered a 10-point penalty.
The following week, Boston United entered administration in the final minutes of a defeat to Wrexham which ensured they were relegated to the Football Conference, meaning they likewise avoided starting the following season on -10 points (though they would find themselves being double-relegated to the Conference North for unrelated reasons).
[21] In 2011 HMRC brought another challenge to the football creditors rule in the High Court, this time on the basis that it breached fundamental principles of insolvency law, including the pari passu rule that all unsecured creditors should be paid on a proportionate basis.
[171] In July 2019, Bury owner Steve Dale agreed a CVA with creditors to avoid the club going into administration; the club were deducted 12 points ahead of the 2019–20 season,[171] but Dale's failure to provide the EFL with full details of the CVA led to Bury's opening fixtures being suspended ahead of a possible expulsion from the League.
[175] It was announced in January 2004 that SPL clubs going into administration in the 2004–05 season would be subject to a 10-point deduction and be prevented from signing new players.
[180] This meant that its penalties for insolvency varied; Dundee were docked 25 points in the 2010–11 season because it was the second time they had entered administration in a relatively short period.
[181] The SFL also had the power to place a team in the bottom tier (Third Division) if there were any doubts that the club could fulfill their fixtures for the forthcoming season.
[183] When Rangers entered administration in February 2012, the club was docked 10 points in the 2011–12 Scottish Premier League.
[187] When the SPL and SFL merged to form the Scottish Professional Football League (SPFL) in 2013, the penalty for entering administration was standardised as 15 points.