The Newcastle Jets, who play in the Australian Hyundai A-League, have been placed into Voluntary Administration by their owner, Nathan Tinkler.

Tinkler has been in dispute with the FFA (Football Federation Australia) who are the governing body of the A-League for some time. The club had a season to forgot in the 2014-15 season, finishing with the wooden spoon and having well documented disputes with players and coaching staff. It is believed that hundreds of thousands of dollars in unpaid wages are owed to players and staff.

Mr Tinkler had reportedly been negotiating the sale of the club to  Scottish Club Dundee United. When the FFA allegedly blocked the imminent sale, Tinkler placed the club into voluntary administration.

By virtue of the voluntary administration, the ipso facto clause in the licence had been triggered which allowed the FFA to cancel the licence with immediate effect.  An ipso facto is a Latin phrase meaning “by the fact”, which in other words meant that as a result of the external administration, the FFA had the express right to terminate the licence or agreement.

The FFA have since announced that a licence would be issued to a new entity, allowing a Newcastle based club to continue in the A-League, with the current players being offered contracts with the new entities.

The story of the Jets acts as a reminder that solvency issues can challenge any business or entity. Further, it highlights the importance of being aware of any ipso facto clauses which may impact any contracts, loans or licences held by a company when considering placing a company into administration.