(Football news) Derby County are on the brink of insolvency, with the EFL confirming that the Rams will face a 12 points deduction in addition to the nine points penalty that was agreed earlier this week for the breach of financial fair play regulations.

Citing the financial impact of the COVID-19 pandemic and a series of failed takeover attempts as the reason for the situation to be as dire as it is, Derby County owner Mel Morris has expressed that he is “devastated” by the current state of affairs at the club, which has steadily been losing up to 1.5 million every month. The EFL has expressed its disappointment about Derby County citing the pandemic as a reason, having offered the same financial support as the other 72 clubs.

Complete control of Derby County’s finances will be taken over by administrators, who are set to be appointed early next week. The club has failed to pay their debts and are currently in 16th place in the Championship after the opening seven games with Wayne Rooney at the helm. Owner Mel Morris has reiterated his priority to make the process smooth and painless, with the priority to pay off creditors and HMRC as well as to look after the club’s employees.

A statement released by Derby County said (read it in full here) “This action was made necessary by a number of developments. Last week, it became clear that the process which has been underway to identify a purchaser likely would not be productive over the near term, despite the number of negotiations with credible parties.

“The irony is that the club's financial forecasts show the emergence of a financially sustainable picture. Absent the COVID-19 pandemic, we undoubtedly would have been able to trade through. However, the impact of COVID-19 pandemic and the unpredictability it has created represents too much of a strain.

"We appeal to the EFL to now assist the club and the Administrators in any way they can in the effort to find a purchaser."

After the statement, the EFL confirmed "The club will be subject to an insolvency event under the terms of the EFL's Regulations. As a result, the Club faces a 12-point deduction. Once the EFL has received formal notification of the application, the deduction will be applied.

"The League is disappointed with the comments made by the club in respect of COVID lending facilities. The EFL entered into a debt raise to provide its clubs with access to funds that would support them in dealing with the impact of COVID and, as with any loan, this was subject to a timeframe and eligibility criteria which Derby County was unable to meet.

"The EFL will in due course engage in discussions with the relevant parties with the aim of achieving a successful outcome for the long-term future for the club."

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