Would different decisions have made a difference?
After five league fixtures and a league cup fixture had been suspended, they were finally given a deadline of 5:00pm for the current chairman Steve Dale to provide proof that he has the money to finance the club and its debts for the current season or to satisfactorily conclude a sale.
The most promising offer from C&N Sporting Risk collapsed at 3:00pm when they announced that due to unresolvable problems with the mortgage on the club’s ground, Gigg Lane and the overall financial state of the club, they could not proceed.
Despite three last-minute offers being received for the club the EFL board announced at 11.04pm that Bury’s membership of the league would be withdrawn saying: “Having fully considered all available options, including a number of late expressions of interest provide to the EFL, the EFL board has unanimously determined with enormous regret that Bury’s membership be withdrawn.”
League One will now continue with 23 clubs including Bolton Wanderers who were also given until 11:59pm on Thursday 12th September to complete a sale of their club or show that it can be funded through a full season in administration or also be expelled.
Several other clubs such as AFC Wimbledon, Darlington, Halifax, Scarborough, Chester and Maidstone, the last team to be expelled from the league in 1992, have reformed lower down the non-league pyramid although only Wimbledon have returned to the Football League.
The FA confirmed that the former winners would not be eligible for this season’s FA Cup but “If the club reforms we look forward to them applying to make an application to The Football Association to re-join league competition further down the English football pyramid from the 2020/21 season.”
So how did we get here?
It’s a strange symbolism and while many millions of pounds owed led to their demise a single £1 was all it took for Steve Dale to purchase Bury FC from previous chairman Stewart Day in December 2018.
Day, who owned several property firms, had been in charge since 2013 and took out a mortgage for £3.7m at 138% annual interest on their Gigg Lane stadium but resolving this was one of the sticking points for C&N Sporting Risk as they were unable to reach an agreement for a reduced figure to pay off the loan and release the charge.
After selling Bury, several of Day’s property companies including one called Mederco which specialises in building student accommodation blocks, went into administration owing thousands of investors over £150m in debts.
Additionally, there were also 250 investors who Mederco had sold car parking spaces at the stadium to at a price of £9,995 each based on speculative yields from annual rents and future events.
The club was purchased by the colourful Steve Dale, who claimed in a BBC interview that he’d never heard of the club before he bought it, and previously had a registered interest in 51 companies, 43 of which went on to be liquidated.
Despite taking over the club and all of its assets, Steve Dale never satisfied the Football League that he had the necessary funds to sustain the club after buying it. This is a requirement of EFL rules for new owners before any takeover or at most, within weeks following one.
You would have expected a more robust response from a governing body than ¯\_(ツ)_/¯ but the league are now shocked, SHOCKED to discover that the owner who couldn’t provide proof of sufficient financial backing could not provide sufficient financial backing.
In July a winding-up petition brought by HMRC was dismissed by the High Court after being adjourned three previous times.
Creditors eventually approved a CVA which triggered a 12-point deduction for the team although this also had an intriguing subplot when it emerged that a company called RCR Holdings owned by Kris Richards – who happens to be the partner of Steve Dale’s daughter – bought Mederco’s debts (and thereby its CVA voting rights), two days before the CVA meeting. Bury owed Mederco £7m so the proportionate weight of that debt gave RCR a deciding vote that ultimately allowed the CVA to pass.
It was also later confirmed that RCR would seek a dividend from the CVA which would be a quarter of the debt owed – an impressive return of £1.75m on a debt bought for only £70,000.
Steve Dale issued a statement saying that all dealings within the CVA had been done in the correct and proper manner but Bury North MP James Frith has written to the EFL calling for an investigation into the relationship between Mederco, RCR and Steve Dale.
The administrators will now continue to progress the CVA and arrange the disbursement of any funds to creditors while supporters wait to see what will happen to the name, ground and other assets and what they are going to do, for the next few months at least, at 3pm on a Saturday afternoon.
The fate of Bury and possibly Bolton Wanderers proves that you need more than love, passion or even luck to run a successful business. The affair also proves that when facing hard reality, the only people you can truly rely upon for guidance and to act in your best interests are professionals.
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